Innovative green-technology SMEs as an opportunity to promote financial de-risking
As the G20/OECD High-Level Principles of SMEs Financing state, Small and Medium-sized Enterprises (SMEs), including micro-enterprises, are core engines of innovation, growth, job creation and social cohesion in high-income/emerging economies, as well as low-income developing countries. In the former, SMEs undertake the majority of private economic activity, and account for more than 60 percent of employment and 50 percent of GDP. In the latter, SMEs contribute on average to more than 50 percent of employment and 40 percent of GDP; furthermore, they contribute significantly to broadening employment opportunities, social inclusion and poverty reduction (G20/OECD 2015).
In this article, the authors argue that G20 countries need to recognize and engage SMEs, and especially low-carbon technology SMEs, as key economic actors in the effort toward climate mitigation and sustainable development. Failing to bring them on board, or designing strategies that do not take into account the challenges and barriers they face, significantly reduces the chances of successfully attaining UN Sustainable Development Goals and the commitments made at the Paris Agreement.
(The paper was originally published in Economics E-Journal).