Walter Ge from New Ventures China launches the English Language Impact report on Green SMEs in China, the first report of its kind. Drawing heavily on New Ventures China’s eight years of practical experience working with green SMEs to strengthen their business models and source investment, the Report: * Develops an exploratory method to evaluate the financial, environmental and social performance of green SMEs, and provides a snapshot of the performance of a survey sample of SMEs against these criteria; * Evaluates the contribution that green SMEs have made to China’s economic transformation; * Highlights challenges to the development of green SMEs and identifies areas where SMEs can be better supported in order to achieve their full financial, environmental and social potential; * Explores ways in which SMEs can realize “environmentally friendly development” and “resource-saving” development, in line with government policy.

2. New Ventures China:
Proving Environmental Entrepreneurship Can Work
Identify & Select
Environmental Acceleration Access
Companies
New Ventures
China Investors
New Ventures
has supported Government
over 500 and public
environmental
SMEs in China
since 2003 Market

3. Table of Content
1 Status Quo of Green SMEs in China
2 Impact Performance Indicators System
3 Analysis on Sample Green SMES
4 Key Findings
Key Findings
5 Next Steps

4. 1. Status Quo of Green SMEs in China
1.1 Green economic laws and policies
Policy
“ 十二五规划”
— 12 项环境生
态相关指标

5. 1. Status Quo of Green SMEs in China
1.2 A power engine for economic transformation
Driven by policies Booming of the Golden age for
and funding green industry green SMEs
Development of Energy Efficiency and Conservation Sector
Year 2006 2007 2009 2010 2011 2015
Total industry output 8.2 21.6 58.7 83.6 125 ？
(RMB billion)
Source: 2011 Annual Report of China’s Energy-Saving Service Industry

6. 1. Status Quo of Green SMEs in China
1.3 potential and impact of green SMEs not well recognized
•Potential of green SMEs in energy efficiency and emissions
reduction not well received by the government
•Lack of proper measuring indicators
The overall sector remains under-developed
•weak in management
•poor access to information

7. 2. Impact Performance Indicators System
2.1 4 major issues studied

8. 2. Impact Performance Indicators System
2.2 Definition on green SMEs
Deliver positive impact on improving the natural environment
through innovative technologies, products, and/or business models
· Renewable energy
· Energy efficiency and conservation
· Water resources management
· Pollution prevention and waste management
· Environmentally friendly new materials and processes
· Sustainable land use
· Biodiversity protection
· Other related green fields

9. 2. Impact Performance Indicators System
2.3 methodology
Strategies and management
Based on triple-
bottom line principle
records green
SMEs' "double
Economic Environment Social green" attributes
performance al performance
performance
Features :
Measurable
Comparable
Participative

10. 2. Impact Performance Indicators System
2.4 Impact indicators framework
First-Level Indicators Second-Level Indicators Third-Level Indicators
Strategy & Value proposition Environmental protection and social contribution
Management objectives defined in the strategies
Management policies Growth and operations model
Business Models Products, customers, markets and competitive
advantages
Performance Economic Basic financial and financing indicators over the
most recent three years
Environmental  Environmental performance created by
technologies and products
 Companies’ internal environmental
management
Social  External: various social contributions
 Internal: job creation, work environment

11. 3. Data Analysis of Sample Green SMEs
3.1 Basic Information
Company size Sector distribution
Revenue Distribution in 2010 (RMB million) Industry Sector Distribution

12. 3. Data Analysis of Sample Green SMEs
3.1 Basic Information
Average Age of Sample Companies by Sector (Year)

13. 3. Data Analysis of Sample Green SMEs
3.2 Consideration of “Sustainable Development” in trategy
Environmental
Operations
Product Features Management and
Management
Response
Energy Social reputation
R&D
Water
Marketing & Response to
Resource challenges
Sales
Utilization

14. 3. Data Analysis of Sample Green SMEs
3.3 Economic Performance
2008-2010 ：
 Total asset growth rate—204%
 Revenue growth rate—315%
 Pre-tax profit growth rate—94%

15. 3. Data Analysis of Sample Green SMEs
3.3 Economic Performance
3-year Growth Rates (2008-2010)
Number of
Sectors Total Asset Revenue Pre-Tax Profit
Businesses
Renewable Energy 13 303% 189% 96.7%
Energy Efficiency and 15 242% 559%
Conservation 80.1%
Water Resources 7 44% 78%
Management 19.4%
Pollution Prevention 11 195% 434% 202.1%
and Waste
Management
Growth Rates of Major Financial Metrics by Sector

16. 3. Data Analysis of Sample Green SMEs
3.3 Economic Performance
Equity Government
Company Size % Bank Loans % %
Investment Funds
6 35% 1 4% 6 25%
Micro Enterprise
2 12% 5 22% 5 21%
Small Enterprise
9 53% 17 74% 13 54%
Medium Enterprise
17 100% 23 100% 24 100%
Total
External financing by sample company size

17. 3. Data Analysis of Sample Green SMEs
3.3 Economic Performance
Company Tax
Subsidies % of total Grants % of total % of total
Size Benefits
4 20% 2 12% 3 19%
Micro
Enterprise
6 30% 5 29% 4 25%
Small
Enterprise
10 50% 10 59% 9 56%
Medium
Enterprise
20 100% 17 100% 16 100%
Total
Distribution of Government Support Funds by Company Size

18. 3. Data Analysis of Sample Green SMEs
3.4 Environmental Performance (contribution)
•Energy saved was approximately 680 thousand tons of coal
equivalent, and emissions reduced were 1.77 million tons of CO2
equivalent;
•1.14 million tons of solid waste were disposed;
•80.50 million tons of sewage were disposed;
•20.8 thousand cubic meters of wood were saved;
•Approximately 7.2 million mu of land were sustainably used;
•The biodiversity of 7 million mu of forest was protected.

19. 3. Data Analysis of Sample Green SMEs
3.4 Environmental Performance (internal operations)
Green operations:
Carbon Emission
Water resource management
Energy efficiency management
Resource utilization efficiency

20. 3. Data Analysis of Sample Green SMEs
3.5 Social contribution
Job creation Decent work
Wages
Total ： 5685
career
Average ： 102 development
Full time ： 5128 work safety
Part time ： 557 occupational
health

21. 4. Key Findings
Policy Green Environmental
Driven Genes & & social
Challenges contributions
• green SMEs enjoy
• embedded “green
rapid growth.
genes” for
sustainable • great potential
• Different policies for contributing
development
lead to different to green
levels of development
development. • Financing
difficulties are
• high barrier for more serious • creating
applying for employment
government opportunities
• Information
funds and
asymmetry
subsidies

22. 5. Next Steps
Improve Working with Green SMEs
Impact the information Impact Role
Indicators center of MIIT
Model
Initiative
Indicators Government Initiatives
database

23. New Ventures China:
Creating Environmental & Social Impact via Role Models
• To select companies with unique
technologies/solutions to address serious
environmental and social problems
• To select entrepreneurs with humanistic care and
acute awareness of sustainability
• To select industry/sector-leading companies or
those with a potential to lead, which could exert
greater and wider impact as role models long-term

24. Impact Role Model:
Sinen en-Tech
•Exclusive developer and provider of
high-temperature condensed water
recovery technology, reducing energy
intensity and water usage
•Pioneer in energy performance
contracting (EPC) business model in
China
Impacts and Potentials:
•On company level;
•On industry level;
Pictured above: The Forbes China
•Beyond industry level
Magazine cover story featuring Yang
and Sinen En-Tech

25. Impact Role Model:
Landwasher
•The Landwasher water-
free flushing toilet reuses
the urine deposited by
users to flush toilet and
saves precious water
resources.
Impacts and Potentials:
•On rural villages
•On residential buildings
Pictured above: Landwasher water-free
flushing toilet on Beijing Olympic sites