Environmental Policy Toolkit for SME Greening in EU Eastern Partnership Countries

image of Environmental Policy Toolkit for SME Greening in EU Eastern Partnership Countries

This toolkit, based on existing good practice, aims to help governments in the EU’s Eastern Partnership (EaP) countries (Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine) to design and implement key instruments to promote environmental compliance and green business practices among small and medium-sized enterprises. Reducing the environmental impact of SMEs in both manufacturing and services is a key success factor in greening the economy. At the same time, improving environmental performance is a significant business opportunity for SMEs as important suppliers of goods and services. Developed under the EaP GREEN project, this report will be of interest to environmental and economic ministries, as well as business associations and non-governmental and academic institutions in EaP countries.



Economic incentives to encourage greening of EaP SMEs

This chapter examines some of the economic tools that governments can use to support the greening of SMEs. This includes tax privileges such as incentives and exemptions. The chapter also examines the role of direct subsidies for consulting services, which can help increase SMEs’ awareness and secure their initial engagement in green practices. At the same time, to both ensure the sustainability of practice, as well as the perceived value of the assistance, the chapter also points to the need to gradually shift to a fee-based system for technical assistance. Greening public procurement is also a powerful tool that governments can deploy. The chapter explores how it can impact entire value chains and provide an important lever to support greening. The chapter also notes that while public financial institutions are an important piece of the puzzle, it is also important to enhance the role of private banks and insurance companies in providing incentives for good environmental performance of SMEs, through better loan or insurance policy conditions to businesses with green credentials.


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