Sustainability Practices and SME Performance: Advancing Halal Supply Chain Development in Malaysia
Abstract
As the halal economy continues to expand, firms are increasingly expected to look beyond halal certification and consider the entire supply chain, including how products are sourced, produced, transported, and delivered. For small and medium enterprises (SMEs), meeting these expectations requires balancing halal-related responsibilities with economic, environmental, and social considerations. Guided by the Triple Bottom Line (TBL), this study examines how social, economic and environmentally sustainable supply chain management (SSCM) practices influence the non-financial performance improvement of SMEs in Kuala Lumpur, and discusses the findings in relation to the development of a more sustainable halal supply chain. A quantitative, cross-sectional survey was administered to 234 SMEs selected through probability sampling from an estimated population of 625 firms. The data were analysed using descriptive statistics, reliability analysis, Pearson correlation and multiple regression in SPSS. The model explained 96.9% of the variance in performance improvement (F = 2404.69, p < 0.001). Economic sustainability emerged as the strongest predictor (β = 0.531, p < 0.001), followed by environmental sustainability (β = 0.404, p < 0.001), whereas social sustainability showed a positive but statistically insignificant effect (β = 0.059, p = 0.201). SMEs therefore obtain more immediate performance benefits from economically and environmentally oriented practices. From a halal supply chain perspective, sustainable halal implementation should not be reduced to certification or religious compliance alone: economic continuity, environmental responsibility, ethical sourcing, employee welfare and stakeholder trust must be integrated if halalan toyyiban is to function as a broader supply chain management philosophy. Future studies should test this framework among halal-certified SMEs using halal integrity, traceability and certification variables.