SME Greening Toolkit:

Policy instruments to promote better

environmental performance

Eugene Mazur

OECD Environment Directorate

Development of the SME Greening Toolkit

• Based on the experience of OECD countries

• Review of existing policies in EaP countries

– enhanced through pilot projects, including surveys

• Regional expert meeting: Kyiv, February 2015

• First edition – May 2015

• Rollout presentations in all EaP countries

• Issue-specific guidance for pilot countries included as annexes

– Simplified EMS certification (Armenia)

– Multi-stakeholder information scheme (Moldova)

– Simplified environmental regulation of SMEs (Ukraine)

– Green certification in the hospitality sector (Georgia)

Current use of green practices in the region

• Willingness to go beyond the requirements of environmental legislation varies from 4% in Armenia to 54% in Moldova

• Still, many SMEs already implement resource efficiency measures

Key drivers for green practices

• Growing prices for energy, water and raw materials

• Rising awareness that greening may lead to a competitive advantage

• Regulatory and financial incentives are very weak

Support for green practices: the biggest gap

• Ministries of economy are taking the lead but efforts insufficient

• Environment ministries provide regulatory info but don’t reach SMEs

• Donor-sponsored initiatives unsustainable in the long term

Government policies for SME greening

• Regulatory tools

• Information-based instruments

– Providing information, advice and guidance

– Recognising green practices

• Economic tools

– Financial incentives

– Market creation

• Institutional partnerships

Making regulatory tools smarter

• Replacing customised permits with general rules

– Low-risk activities, many operators, similar technologies

– Important to preserve notification of competent authority

• Incentives for EMS certification

– Privileges in the permitting process

– Reduced in monetary penalties

– Reduced inspection frequency

• Sectoral approach to compliance assurance

– SMEs respond primarily to compliance promotion messages adapted to their sector

– Inspection campaigns

– Partnerships with non-environmental regulators and trade associations

Providing information, advice and guidance

• Mix traditional and advanced communication tools

– “Regulatory watch”: e-mail, magazines, newsletters

– Web-based guidance

– Direct contacts between inspectors and operators

• Make the business case for green practices

– Emphasise efficiency gains and market opportunities

• Offer concise and clear guidance

• Distinguish legal requirements from good practice

• Simplified environmental management systems

– Multi-tier EMS: focus on simple, accessible improvements in management practices

• Sector-specific green certifications

• Eco-labels

• Environmental recognition awards

Recognising green practices

Financial incentives

• Tax privileges

– Accelerated amortisation

– Reduced property or corporate taxes

• Soft loans

– Encourage banks and insurance companies to provide incentives for green practices

• Subsidies for consultancy services

– Initial public funding is necessary

– Gradual transition to fee-based services

Market creation

• Green public procurement – environmental criteria of procurement decisions

– Compliance with environmental requirements

– Green certification

– Eco-labels

• Supply chain management – encourage large firms to form partnerships with smaller suppliers to improve their environmental performance

Building institutional partnerships

Government authorities:

• Compliance promotion is part of environmental regulators’ job

• Closer collaboration between ministries of economy and environment and business support organisations

• Multi-stakeholder coordination

Business and trade associations:

• Signposting

• Developing marketing and promotional materials

• Sector-specific technical assistance, not just lobbying

• Increase the membership of SMEs

SME Greening Toolkit online

• English:

http://www.oecd.org/env/outreach/Greening-SMEs-policy-toolkit-eng.pdf

• Russian:

http://www.oecd.org/env/outreach/Greening-SMEs-policy-toolkit-rus.pdf