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2022 GGSD Forum- Session 4 Scene Setter-Celine Kauffmann

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2022 GGSD Forum- Session 4 Scene Setter-Celine Kauffmann

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Scene-setting presentation by Céline Kauffmann, Head of Division, SME and Entrepreneurship, OECD at the 2022 GGSD Forum, Session 4 "Stimulating green innovation in SMEs"

Scene-setting presentation by Céline Kauffmann, Head of Division, SME and Entrepreneurship, OECD at the 2022 GGSD Forum, Session 4 "Stimulating green innovation in SMEs"

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2022 GGSD Forum- Session 4 Scene Setter-Celine Kauffmann

  1. 1. @OECD_local www.linkedin.com/company/oecd-local www.oecd.org/cfe STIMULATING GREEN INNOVATION IN SMES 2022 GGSD Forum, Paris, 23 November 2022 Céline Kauffmann, Head, Entrepreneurship, SME and Tourism Division, OECD Centre for Entrepreneurship, SMEs, regions and Cities
  2. 2. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | No net zero without SMEs & entrepreneurs
  3. 3. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | The environmental footprint of SMEs 3 SMEs on aggregate account for: 40-64% of industrial waste 50-70% of GHG emissions by the business sector 9-29% of total energy consumption, and between 30-60% of energy use in the business sector => Environmental sustainability as a key engine for competitiveness
  4. 4. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | SMEs and entrepreneurs contribute to eco- innovation and new green markets 4 In some countries, 70-90% of clean tech firms are SMEs According to the IEA, start-ups account for a rapidly increasing share of clean energy technologies, in particular in solar and energy efficiency One third of SMEs offer green products or services, or intend to do this in the near future
  5. 5. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | 5 There are growing opportunities in the green economy 80 100 120 140 160 180 200 Environmental economy: employment Environmental economy: gross value added Overall economy: employment Overall economy: gross value added  Employment and GVA are growing faster in the green economy than the overall economy in the European Union. Source: Eurostat (2021), Environmental economy – statistics on employment and growth.
  6. 6. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | What is (not) happening on the ground?
  7. 7. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | Source: European Commission (2020), Flash Eurobarometer 486: SMEs, start-ups, scale-ups and entrepreneurship. 7 SMEs and entrepreneurs are already “greening” but more action is needed 0 25 50 75 100 Developing sustainable products or services Recycling or reusing materials Reducing consumption of or impact on natural resources Saving energy or switching to sustainable energy sources % Which of the following actions is your enterprise actively taking? SMEs Large firms Source: European Commission (2020), Flash Eurobarometer 486: SMEs, start-ups, scale-ups and entrepreneurship.
  8. 8. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | 8 SMEs have incentives but face barriers SMEs: • Lack of awareness about greening opportunities • Limited access to resources, incl. finance • Uncertainty about the business case, payback times & policy stance Green entrepreneurs: • Finance gap, due to high capital requirements and policy and market risks, especially at pre-seed stage • Slow route to markets for new green products and services • High regulatory hurdles in green sectors 5 14 13 20 25 21 40 7 15 15 23 24 27 30 0 5 10 15 20 25 30 35 40 45 Lack of willingness among the management It would not be profitable Lack of skills, including managerial skils Lack of awareness about how to integrate sustainaiblity into the enterprise's business… It is not compatible with your current business model Lack of financial resources Lack of consumer or customer demand % SMEs Large firms Note: Sample covers 12 615 firms in European Union Member States. The survey was conducted between February and May 2020. Source: (European Commission, 2020). Challenges preventing firms from becoming sustainable
  9. 9. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | Risks are looming again with current international environment 9 Economic impacts • Inflation / higher energy prices • Higher interest rates • Lower demand • Supply-Chain disruptions • Labour market tensions Exacerbate vulnerabilities • Tighter access to finance • Increased debt burden • Reduced activity and profitability • Freezing effect of massive government support Threaten recovery • Higher bankruptcies • Lower investment • Less equiped for the transitions
  10. 10. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | Making it happen
  11. 11. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | 11 What policies for green entrepreneurship – Lessons from Denmark Building demand for green solutions Carbon pricing Regulatory changes Circular economy Expanding green public procurement Direct support for green entrepreneurs Supporting the development of green skills Facilitating access to green finance Create opportunities through public-private partnerships Green incubators and accelerators
  12. 12. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | OECD Public banks Private banks SMEs Governments What needs to be done to address the finance gap? Fintechs 12 • Address demand and supply-side constraints • Facilitate the collection of timely and granular data • Provide non-financial support to help bridge SME knowledge gaps • Tailor approaches and support to reflect SMEs diversity • Adapt SME-related disclosure and other requirements An OECD Platform to tackle financing SMEs for sustainability
  13. 13. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | Towards a dashboard of SME greening and green entrepreneurship indicators 13 • Data and knowledge gaps hamper action (common definition, evidence of green activities and practices, impacts of policies) => A dashboard of SME greening indicators across countries and that can be monitored over time. Estimates of the environmental footprint of SMEs • SME GHG emissions • SME energy consumption • SME GHG emissions intensity • SME energy intensity • SME energy price burden Estimates of green entrepreneurship • Number / share • Location / gender • Impacts (employment) • Constraints
  14. 14. © OECD | Centre for Entrepreneurship, SMEs, Regions and Cities | @OECD_Local | • No net zero without SMEs: Exploring the key issues for greening SMEs & green entrepreneurship, https://doi.org/10.1787/bab63915-en • Policies to Support Green Entrepreneurship: Building a Hub for Green Entrepreneurship in Denmark, https://doi.org/10.1787/e92b1946-en. • OECD Platform on Financing SMEs for Sustainability • Financing SMEs for Sustainability: Drivers, Constraints and Policies, Forthcoming (Dec 2022) • Towards a pilot dashboard of SME greening and green entrepreneurship indicators , Forthcoming (2023) Useful resources Join us!
  15. 15.  Twitter: @OECD_local LinkedIn: www.linkedin.com/company/oecd-local Website: www.oecd.org/cfe Thank you! Celine.kauffmann@oecd.org

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