SMEs are the backbones of economies across the globe. Local green enterprises (LGEs) are key adopters of environmental innovations in the production and manufacturing of environmental goods, services and technologies. Availability of finance is a key enabler for economic activity. If not matched with policies that drive transition to sustainable MSME practices, products and services will intensify environmental and climate deterioration.

To switch practices, MSMEs encounter fundamental challenges. These include poor access to finance, inadequate research and innovation systems and limited business skills. These challenges are more pronounced with green MSMEs who face the additional risk that their business model is often centred on innovations (in business process, product or service across economic sectors), many of which are still new, untested and unmarketed.

The Sustainable Finance Action aims to improve the investment climate for local green enterprises (LGEs) in the target countries (Mongolia, India, Senegal, South Africa, Uganda, Caribean and Peru) by supporting new financial policies that step up investments in LGE and increasing the number of financial institutions which have adopted new policies that facilitate the financing of LGEs.

Stakeholders will benefit through enhanced participation in green economy policy processes related to financial reforms and products in particular as the action envisions establishing knowledge platforms for sharing knowledge between green enterprises and other stakeholders at national, regional and global scales.