Small and medium-sized enterprises in Montenegro are showing great interest in responsible business conduct (RBC), viewing it as a way to strengthen their market position, boost productivity and competitiveness, and build trust with customers and partners, according to a new study by the International Labour Organization (ILO).
The report, "The Promotion of Sustainable, Responsible and Inclusive Business Practices among SMEs in Montenegro," reveals that while many SMEs are still in the early stages of adopting responsible business practices, interest in RBC and sustainability standards is on the rise. This trend is partly driven by expanding legislation on corporate responsibility to respect human and labour rights, including within the EU, as well as growing expectations from investors, buyers, and international markets for stronger human rights due diligence (HRDD) and sustainability performance.
RBC is key to achieving sustainable development, inclusive economic growth and decent work. Guided by frameworks on RBC, such as the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), enterprises in Montenegro, including SMEs, can make a positive contribution to economic and social progress and the realization of decent work for all, while addressing the challenges to which their various operations may give rise. For Montenegro-where SMEs account for over 90 percent of businesses-the shift towards responsible business practices aligns with the country's progress toward EU integration and evolving directives on sustainability.
Conducted under the joint ILO-UNDP project "Circular Transition and Responsible Business Conduct in Montenegro", funded by the EU, the study was endorsed by national tripartite constituents, including the Ministry of Labour, Employment and Social Dialogue, the Montenegrin Employers Federation (MEF), and trade union confederations - CTUM and UFTUM. It combines a review of policy and legislative frameworks with interviews and focus groups with key stakeholders and SMEs, including women-led firms and those employing vulnerable groups.
The study identified key barriers facing SMEs in adopting responsible business practices, including limited awareness of RBC and HRDD requirements, capacity and skills shortages, insufficient guidance, restricted access to finance, and fragmented institutional support. At the same time, some informants from SMEs demonstrated awareness of the key opportunities related to RBC implementation, such as:
- Boost productivity and competitiveness
- Attract and retain talent with improved workplace practices
- Offer skills development opportunities
- Strengthen risk management and resilience in a changing market
- Access new markets and financing by aligning with international standards
While challenges remain, the study identifies clear entry points for progress through policies on procurement, trade, investment, finance and training. Participants emphasized the importance of integrating RBC principles into economic strategies, enhancing policy coherence, and expanding tailored training for SMEs.
The Ministry of Labour, Employment and Social Dialogue, the Montenegrin Employers Federation (MEF), the Confederation of Trade Unions of Montenegro (CTUM), and the Union of Free Trade Unions of Montenegro (UFTUM) welcomed the findings, reaffirming their commitment to strengthening RBC among SMEs in Montenegro. In doing so, the Ministry highlighted its ongoing efforts to strengthen labour inspection and explore a national action plan on human rights and RBC. Social partners, in turn, stressed the importance of reinforcing social dialogue and supporting SMEs with clearer guidance, sector-specific outreach, and tailored training.
As Montenegro advances toward EU accession, SMEs are well-positioned to turn responsible business practices into a competitive advantage-creating benefits for enterprises, workers, and the country's economy as a whole.
