Exploring Green Growth in SMEs: Global Trends, Challenges, and Future Directions

Abstract

This systematic literature review examines the adoption of green growth practices at small and medium-sized enterprises (SMEs), synthesizing findings from 56 peer-reviewed articles published between 2010 and 2024. The study explores key dimensions of green growth, including environmental innovation, circular economy practices, and green financial management across various sectors and geographical regions. The analysis reveals a progressive shift in SMEs’ sustainability practices, from initial awareness to ecosystem development, influenced by factors at the macro, meso, and micro levels. Key drivers identified include government policies, market pressures, and technological innovations, while primary barriers encompass financial constraints and knowledge gaps. The research highlights emerging trends such as the integration of digitalization, circular economy models, and green finance in SMEs’ sustainability efforts. Additionally, it uncovers significant research gaps, particularly in understanding the long-term impacts of green growth initiatives and the role of resilience in post-pandemic recovery. This study concludes by proposing a future research agenda focusing on themes like AI-driven business model innovation, blockchain in green finance, and cross-sector policy harmonization. These findings offer valuable insights for policymakers, business leaders, and researchers in fostering sustainable practices across the SME sector.