Environment in emerging and transition economies

EaP GREEN: Greening small and medium-sized enterprises



A growing number of large companies worldwide recognise the advantages of cleaner production in terms of reduced costs in materials, energy, and compliance with environmental requirements, as well as in responding to expectations of customers, investors and local communities. However, small and medium-sized enterprises (SMEs), particularly micro-businesses, have limited capacity to learn about and interpret environmental regulations. Many EU and other OECD countries have addressed this challenge by simplifying requirements for low-risk facilities, for example, through standardised permits or general binding rules. Many have also implemented information-based tools and regulatory and financial incentives to encourage SMEs to comply with and go beyond environmental requirements. Strategies for greening SMEs are usually sector-specific, reflecting the environmental risk profile of the sector concerned, and involve business and trade associations.

In EaP countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine), SMEs represent the growing majority of all businesses. Although small businesses’ individual environmental footprint may be low, their aggregate impact is considerable. However, EaP countries have given little consideration to the greening of small businesses, and the legal, policy and institutional means to enhance the environmental performance of SMEs is lacking.

Objectives and activities

  • Preparation of an SME Greening Toolkit based on international, particularly EU, experience, presenting guidance on the main instruments to promote environmental compliance and green business practices in SMEs. Regional meetings involving the participation of ministries of economy and environment, business and trade organisations and other non-governmental actors will be conducted to ensure that the toolkit is adapted to the context in EaP countries, and widely disseminated. In addition, two-three sectoral roadmaps will be developed to support the introduction of new approaches for improving the environmental performance of SMEs in those sectors.
  • Implementation of pilot projects in one or two EaP countries with a view to establishing the necessary national-level policy framework for improving the environmental performance of SMEs. This will involve the development of recommendations on the design and introduction (through policy and legislative changes) of specific regulatory, information-based and financial instruments for the greening of SMEs. A number of national stakeholder meetings, with broad participation of business representatives, will be conducted to discuss and validate such recommendations.
  • National-level stakeholder consultations will be organised in the EaP countries that will not host a pilot project in order to build consensus on policy measures necessary to improve the environmental performance of SMEs. These will draw on the experience gained in the pilot projects and the analysis conducted to support the implementation of this activity.

DID YOU KNOW? SMEs account for approximately 99% of all enterprises, two-thirds of employment, and 60-70% of industrial pollution in Europe. The key sectors where SMEs have a particularly significant environment impact include livestock farming, construction, metal finishing, waste treatment, food and drink industry, textile and leather manufacturing, etc.