1887

OECD SME and Entrepreneurship Papers

The series provides comparative evidence and analysis on SME and entrepreneurship performance and trends and on a broad range of policy areas, including SME financing, innovation, productivity, skills, internationalisation, and others.

English

Which SMEs are greening?

Cross-country evidence from one million websites

Small and Medium-sized Enterprises (SMEs) could play a pivotal role in the pursuit of climate objectives. SMEs have a significant carbon footprint on aggregate, but they can also contribute to reaching net zero through their innovations and commitment to the use of environmentally friendly practices. This study develops a novel metric to identify environmental engagement, also referred to as “greening”. The study harnesses the power of machine-learning and analyses the content of over one million websites of firms from 15 OECD countries encompassing about 10 billion words. Greening is identified based on firms’ self-declared information about products or processes on their websites. The resulting indicator is then evaluated considering firms’ characteristics. The results show that: (1) About one-third of SMEs are environmentally engaged, albeit with considerable variations across countries; (2) Greening SMEs are more productive, pay higher wages and their sales grow faster than non-greening SMEs; (3) Solar energy is the most cited action among greening SMEs, followed by recycling and energy efficiency, (4) Sectors with higher greenhouse gas emission reduction over the past decade also display higher levels of environmental engagement.

English

Keywords: Environmental performance, SMEs, Firm Performance, Machine learning, Sustainability
JEL: Q56: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth; L25: Industrial Organization / Firm Objectives, Organization, and Behavior / Firm Performance: Size, Diversification, and Scope; Q50: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: General
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