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Rising global climate mitigation and environmental challenges are forcing businesses to actively implement imperative sustainable approaches and practices. The concept of “green entrepreneurship” has emerged as a pivotal instrument to manage environmentally responsible innovation and economic growth. One of the studies attracted our attention showing new parameters in green-growth theories and their practical implementation, e.g. in Turkey.
Background
In recent years, the urgency for businesses to adopt sustainable practices has intensified due to escalating environmental concerns and increasing pressures from corporate responsibility. The SMEs play a pivotal role in the global economy, particularly in developing countries, however, their contribution to environmental degradation is still great. To address this, the concept of green entrepreneurship has emerged, emphasizing the integration of environmentally friendly practices into business operations. The development of green economies varies significantly around the world, reflecting diverse political economies, laws and cultural aspects.
Generally, environmental degradation, resource scarcity, as well as climate mitigation, have already posed significant risks to both the natural environment and long-term business patterns. In dealing with these challenges, the corporate sector requires innovative solutions that not only mitigate environmental impacts but also enhance competitiveness and resilience. Thus, a new understanding of the green entrepreneurship’s dynamics is crucial for fostering environmentally responsible business practices and ensuring long-term competitiveness both on the national and global markets.
In the EU-27, some stringent environmental regulations and strong public awareness have propelled countries like Germany and the Nordic States to prioritize the so-called green economic practices, e.g. “green transition”. Substantial investments in renewable energy, sustainable technologies and green infrastructure have led to significant reduction in carbon emissions and increased resource efficiency. Similarly, in North America, the US and Canada have seen an exponential growth in investment and development in green industries, driven by innovation and sustainable policies.
On sustainable business in: https://www.integrin.dk/2023/02/03/sustainable-business-on-both-sides-of-the-atlantic-controversies-proceed/
“Green theory” in business
Active deployment of green growth patterns (coped with the SDGs and financial resources) has activated the new research fields and even new terminology: thus, some researchers are exploring such components as the impact of green entrepreneurship (GE) on business sustainability (BS) through a “mediation role” of green structural capital (GSC) and modernizing trends in environmental dynamism (ED).
For example, scientists in Turkey have shown that GE significantly enhances the BS and GSC; the latter serves as a vital mediator in the GE-BS relationship. However, researchers note that ED can often negatively affect the GE-BS relationship and indicated that GE’s positive impact on BS could be accentuated under lower environmental uncertainties. Additionally, ED’s moderation effect is observed in the GE-BS relationship via GSC, particularly under conditions of reduced dynamism, underscoring the nuanced role of environmental factors in sustainable entrepreneurship. These findings demonstrate green entrepreneurship and structural capital as key drivers for SME sustainability amidst environmental fluctuations.
General source, reference and citations in the article are from: Green Entrepreneurship for Business Sustainability: Do Environmental Dynamism and Green Structural Capital Matter? By Khaled Tekala, Sarvnaz Baradarani, Ahmad Alzubi and Ayşen Berberoğlu. In: Sustainability 2024, 16(13), 5291; DOI: 10.3390/su16135291
Turkey’s situation: a case study
Being at the crossroads of Europe and Asia, Turkey presents a unique case in green business sustainability: the country has made significant strides in adopting green practices, with government initiatives promoting renewable energy and sustainable development. Despite these efforts, Turkish SMEs still face numerous challenges, including limited access to green financing, a lack of comprehensive regulatory support, and varying levels of environmental awareness among business leaders. However, the researchers acknowledge, the imperative for sustainable practices in Turkish SMEs has never been more pressing.
GE represents a paradigm shift in business practices where Turkish entrepreneurs integrate environmental considerations into their ventures, aiming to create value not only for shareholders but also for society and the environment; thus, GE involves the development and implementation of innovative business models, products and processes that minimize environmental impacts while generating economic returns. GSC encompasses the intangible assets within organizations that support and enable green entrepreneurship initiatives. These assets include knowledge, skills, networks and organizational structures specifically geared toward promoting SDGs.
Besides, the GSC plays a crucial role in facilitating the adoption and implementation of green practices, thus enhancing the overall sustainability performance of SMEs.
Researchers note that corporate sustainability refers to the SMEs ability to achieve long-term profitability and competitiveness while simultaneously addressing environmental and social concerns. Really sustainable businesses can only operate in harmony with the environment, ensuring an efficient use of available resources, as well as reduction in wastes, pollution and promoting social equity and responsibility.
On “Green business”: https://www.integrin.dk/2023/06/29/green-business-in-modern-european-political-economy/
And specifically: Eteris E. “Green Business” in Europe: Modern Reforms and Governance. In: Proceedings of World Conference on Information Systems for Business Management, Springer Nature Publish. 2024. https://doi.org/10.1007/978-981-99-8349-0_13
Policy’s implications
Numerous studies suggest the need for a regulatory and institutional framework to promote the SMEs involvement in “green entrepreneurship” and sustainability practices: thus, policy-makers are adopting approaches focused on innovative incentives and support aimed at fostering the adoption of environmentally friendly technologies among SMEs. Most often these measures include tax incentives, financial aid, specialized support, as well as already available eco-friendly funding alternatives.
Moreover, it is imperative to implement policies that bolster the accessibility of information and resources pertaining to sustainability for SMEs. Creating platforms for the exchange of knowledge, cooperation, and the development of skills can enable SMEs to effectively navigate the intricacies of sustainability practices. It is critical for policymakers to prioritize the advancement of infrastructure and ecological frameworks that foster the expansion of green entrepreneurship. This entails the establishment of green industrial parks, incubators, and accelerators.
Green theory’s framework
The theoretical framework of Green Theory (GT) was established in 1972 in response to growing concerns about the stability of nature’s balance. While globally focused, the discourse on the integration of economy and environment has long held a global dimension, predating the emergence of green theory; the latter aligned with the concerns of the “burgeoning social movement” and green parties. The idea is that environmental preservation and economic progress exist in a straightforward zero-sum correlation: it emphasized the possibility of separating economic expansion from environmental harm by actively promoting eco-friendly and sustainable development approaches. The concept of sustainable growth was expressively articulated by the Brundtland Commission in “Our Common Future”/1987, and centered on meeting their necessities. Hence, applying GT reveals three main factors that have led to the intensification of environmental actions, especially toward the end of the 20th century. Firstly, the environmental movement’s expansion has been driven by scientific studies and environmentalists aiming to protect the environment. Secondly, there has been a growing appreciation for environmental values in countries beyond Europe and America. Lastly, a shift in perspective toward environmental issues has led to a broader conceptualization of the environment.
“Green growth” concept
The “green theory” concept is developed through: a) examining connections between green entrepreneurship, green structural capital and business sustainability; b) quantitative research design and data collection; c) analyzing relationships and the roles of structural capital and environmental dynamism; d) creating connections between theoretical and practical implications, and e) ensuring a coherent exposition of how green initiatives impact sustainability outcomes in emerging markets.
In international relations, “green theory” differs from mainstream theories such as liberalism and realism by adopting an “eco-centric” approach that prioritizes the environment and environmental issues over human concerns. This approach seeks to challenge economic, political, and social hierarchies within a framework centered on the environment rather than humans. Unlike conventional paradigms like security, development, and the traditional state, Green Theory emerges as a critique of ne-oliberal globalization, representing a novel movement Initially emerging as a social movement, Green Theory gained political traction when the German Greens raised three fundamental questions: moral, resource and waste problems. As a result, Green Theory seeks to significantly alter classical perspectives by adopting a problem-solving approach to global environmental issues and emphasizing the importance of addressing the root causes of problems in order to effect change. It aims to strengthen the normative perspective. Green critical theorists reject the argument that modernization leads to environmental degradation and reject the notion of humanity’s dominance over nature. They also critique the idea that sustaining human life justifies exploiting nature as a means to an end. In contrast to traditional environmentalism and political ecology, this presents a radical departure. It boldly questions established political, social, and economic frameworks, especially challenging mainstream liberal assumptions that transcend existing political boundaries.
Fundamentally, Green Theory promotes a unified moral viewpoint known as a “green theory of value”, which remains independent of particular practices or political organizations. For instance, a green ethical stance might advocate restraining human material progress to safeguard non-human nature, even proposing limitations on conventional liberties in favor of prioritizing the well-being of our planet over human interests. In such an eco-centric perspective, which stands in contrast to anthropocentrism, human needs and desires are considered within a broader ecological framework, prioritizing healthy ecosystems as essential for human health and well-being. Transboundary issues like air and water pollution and climate change affect all nations and populations, highlighting the ecological inter-connectedness of human populations.
“Green” entrepreneurship
Expanding the “green theory”, the concept of GEN centers on entrepreneurial endeavors aimed at advancing environmental sustainability; GEN entails recognizing and seizing business opportunities that adhere to ecological principles and foster favorable environmental results. Despite the extensive research on social entrepreneurship, there has been a notable absence of inquiry into the motivations and factors driving GEN, which represents a distinct form of social entrepreneurship. Green entrepreneurs are characterized by their innovation of products, services, and processes aimed at reducing environmental impact, conserving resources, and fostering sustainable consumption and production patterns. GEN strives to foster a harmonious balance between human activities and ecological well-being, promoting sustainable practices for the benefit of our planet. As the proportion of green enterprises in the economy increases, so does the potential for sustainable development. GEN represents a novel term within the realm of sustainability. Recently, a transformative strategy has surfaced, dedicated to reshaping businesses into environmentally conscious entities.
This approach focuses on mitigating their adverse effects on the environment while wholeheartedly embracing sustainability: i.e. the goal was to achieve this transformation without risking financial stability
Corporate sustainability
The BS concept encompasses the seamless integration of sustainable considerations into organizational decision-making and operational processes. By harmonizing these three dimensions, businesses can foster long-term success while contributing positively to the world around them. In today’s dynamic landscape, the imperative to prioritize environmental protection and embrace sustainable business practices has become indispensable. Meeting market demands and fulfilling stakeholder expectations now hinges on our ability to harmonize these dimensions effectively. BS entails the adoption of strategies and practices that harmonize profitability with environmental and social responsibility. Concurrently, governments have intensified their focus on environmental protection while also addressing social needs and economic objectives. Many firms recognize the importance of strengthening their modernization capabilities to fortify their competitive edge and promote the sustainability of their operations. Sustainable development comes to execution when an organization proactively adopts strategies to realize the objectives and aspirations of its stakeholders, all while prioritizing the welfare of future generations. As previously defined, sustainability entails the ability to address economic and social requirements without exposing the ecological environment. The concept of sustainability underscores the importance of attaining both business objectives and human well-being. The definitions of sustainability highlighted earlier imply that companies should not focus solely on increasing shareholders’ wealth.
Two aspects in green entrepreneurship and business sustainability (importance of environmental protection and embracing sustainable business practices) have risen to the forefront for companies striving to satisfy market demands and fulfill investor expectations. Governments, too, have heightened their focus on environmental protection while addressing social and economic objectives. Researchers have extensively examined the role of institutions as catalysts for entrepreneurial endeavors and investigated their intricate ties to economic advancement. Some identified BS as a key component of corporate sustainability management: BS entails meeting environmental goals while promoting sustainable corporate development; it represents a fundamental and indispensable concept for organizations.
The sustainable performance of a corporation is evident across multiple dimensions, including effective environmental pollution management, positive social impact, market share, and achieved profitability. BS identifies environmental performance as a fundamental aspect. It encompasses enterprises’ efforts to diminish carbon emissions, including initiatives such as reducing environmental incidents, increasing the use of renewable resources, minimizing waste, and optimizing supply utilization. Scholars advocate that the future trajectory of corporate sustainability management should prioritize promoting green transformation, mitigating carbon emissions, and nurturing sustainable development domains. Corporate green innovation assumes a critical role in enhancing environmental performance within the corporate landscape.
SMEs practice
The researchers highlighted the strategic importance of incorporating green entrepreneurship (GEN) and green structural capital (GSC) into the fundamental business models in SMEs; the latter can access fresh business prospects that correspond to the increasing worldwide demand for eco-friendly goods and services by adopting GEN. This entails adopting a proactive approach to identifying and capitalizing on these opportunities, which necessitates a fundamental shift in perspective toward innovation focused on sustainability.
Furthermore, the crucial significance of GSC underscores the imperative for SMEs to allocate resources and develop their internal capacities and assets specifically focused on sustainability. This entails the creation of organizational frameworks, systems, and procedures that enable the efficient execution of environmentally sustainable practices. Small and medium-sized enterprises (SMEs) should give priority to developing a robust green supply chain (GSC), as it not only improves their sustainability performance but also establishes them as appealing collaborators in the green supply chain, thus creating new market prospects.
The SMEs operating in highly dynamic environments can greatly benefit from green entrepreneurial activities due to the intricate role of environmental dynamism (ED); hence, it is imperative for SMEs to foster agility and resilience in order to adjust their strategies in light of swift environmental fluctuations. This entails remaining aware of regulatory changes, market dynamics, and technological progress that could potentially influence sustainability initiatives. By doing this, SMEs can effectively utilize the opportunities provided by environmental dynamism to advance their sustainability agenda.
For instance, a textile manufacturing SME can invest in research and development to create eco-friendly dyeing processes, utilizing natural dyes and water recycling systems to reduce environmental impact. Similarly, a construction company can develop partnerships with suppliers to source sustainable materials and adopt green building practices, leveraging collaborative networks to enhance its reputation in sustainable construction. Integration of sustainability into business strategies can be exemplified by a food processing SME setting targets for reducing food waste and packaging materials, and aligning objectives with environmental sustainability to improve operational efficiency. Furthermore, adaptation to environmental dynamism involves a renewable energy technology startup anticipating market shifts and regulatory changes to capitalize on emerging opportunities in the renewable energy sector.
Collaboration and knowledge-sharing among SMEs in the tourism sector can promote sustainable tourism practices, fostering collective efforts to reduce environmental footprints and enhance industry sustainability. Implementing comprehensive sustainability reporting frameworks allows manufacturing SMEs to track key performance indicators transparently, building trust and credibility with stakeholders while driving continuous improvement in environmental performance. These examples illustrate the practical relevance of green entrepreneurship practices in addressing environmental challenges and driving business sustainability among SMEs in various states.
Socio-economic aspects in eco-dynamism
Environmental dynamism (ED) refers to an active/dynamic approach to internal-external business environment: in this context, fluctuating client demands and commodity requirements play pivotal roles, introducing unpredictability and instability. Organizations navigating ED must adapt swiftly to these challenges, seeking equilibrium between flexibility and performance. The interplay of uncertainty, dynamics, and complexity in the external economic landscape impacts an enterprise’s organizational flexibility and overall performance. Additionally, ED can introduce challenges related to technological capacities and competitive landscapes.
Despite growing interest in green entrepreneurship and business sustainability, there remains a notable research gap in understanding the specific relationship between these concepts, particularly within the context of SMEs. While existing studies have examined various aspects of green entrepreneurship and business sustainability, they often overlook the dynamics and mechanisms that underpin these phenomena, especially in emerging economies like Turkey.
Furthermore, existing research tends to overlook the influence of environmental dynamism on the relationship between GEN, GSC and BS in Turkish SMEs. Environmental dynamism means that the natural environment, rules and market conditions can change very quickly. This can significantly impact the effectiveness of green business ideas and the utilization of structural capital; however, environmental dynamism serves as a peripheral factor rather than a central determinant of the SMEs’ sustainability outcomes.
Researchers have revealed the present issues’ objectives: firstly, they examined how the relationship between green entrepreneurship and green structural capital influenced business sustainability; secondly, they revealed the extent to which environmental dynamism moderated the relationship between the GEN, GSC and BS in SMEs. Thirdly, they showed how green entrepreneurship impacted business sustainability. Fourthly, they determined the extent to which green structural capital acted as a mediator in the relationship between green entrepreneurship and business sustainability.
General source, reference and citations from: Green Entrepreneurship for Business Sustainability: Do Environmental Dynamism and Green Structural Capital Matter? By Khaled Tekala, Sarvnaz Baradarani, Ahmad Alzubi and Ayşen Berberoğlu. In: Sustainability 2024, 16(13), 5291; DOI: 10.3390/su16135291