Empowering Small Business Through Sustainability

During National Entrepreneurship Week, we recognize the ingenuity and resilience of small businesses—the backbone of our economy. As we look toward the future, ensuring that entrepreneurs can participate in the growing green economy is critical. Sustainable business practices offer opportunities for innovation, cost savings, and job creation; however, many small business owners face challenges in accessing these opportunities. It’s essential that we address these barriers.  

For small businesses to engage in the green economy, sustainability must be practical, affordable, and advantageous. 

Why Access to the Green Economy Matters for Small Business 

The green economy is more than just sustainability; it recognizes economic opportunity, innovation, and growth. Recent reports indicate that the global green economy now has a market value of $7.2 trillion, making it one of the fastest-growing sectors globally. This booming sector presents immense opportunities, yet small businesses often find themselves on the sidelines.    

The Challenge: Barriers to Green Business Participation 

The biggest hurdle for small businesses entering the green economy isn’t a lack of interest but a lack of access. Many entrepreneurs are uncertain about how to begin integrating sustainability into their operations. A recent survey by Prosperity Now revealed: 

• 92% of small businesses have limited awareness of green business opportunities. 

• More than half (54%) of Community Development Financial Institutions (CDFIs) and Entrepreneur Support Organizations (ESOs) have not engaged with businesses pursuing green economy initiatives. 

This gap in awareness and support means that, despite the long-term benefits, many small business owners struggle to take the first step. Additional challenges highlighted in our research include:  

• Leased Spaces: Many businesses operate in leased properties where landlords may have little incentive to make energy-efficient upgrades, leaving tenants to bear the burden of higher utility costs. 

• Operational Constraints: Small business owners often juggle multiple responsibilities, which can make it difficult to dedicate time or resources to learning about sustainability. 

• Limited Access to Capital: Securing funding for green improvements is especially challenging for businesses in leased spaces where they lack control over energy or infrastructure investments.  

One lender working with microbusinesses and in the service sector noted:  

“We work with smaller businesses, many in the service sector, and most do not own their business location, [or are] completely mobile. Green opportunities are not on the horizon for them, and given their size, the business case for them is not as apparent.” 

Furthermore, small business owners need clear financial incentives to prioritize sustainability. As one business support organization leader noted:  

“The biggest challenge is connecting sustainability to real financial benefits in a way that makes sense for small business owners who are already balancing so much.” 

The Green Business Accelerator: A Practical Solution 

To help address these challenges, Prosperity Now has launched the Green Business Accelerator (GBA), an initiative designed to help entrepreneurs tap into the growing green economy.  

The GBA focuses on three main areas: 

1. Capacity Building for CDFIs and ESOs: Offering training and resources to business support organizations to help them develop green-focused products and services. 

2. Strategic Partnerships: Partnering with funders, government agencies, and industry leaders to unlock capital and create opportunities for small businesses in sustainable sectors. 

3. Dedicated Business Navigators: Embedding sustainability experts within CDFIs and ESOs to support entrepreneurs securing financing, contracts, and integrating green practices into their operations.  

Beyond education and funding access, the GBA also demonstrates how sustainability can help small businesses reduce costs and drive growth. As one stakeholder noted: 

“Understanding the relevance and the profit-making opportunities that exist—really getting exposure to these opportunities—would be a game changer.” 

Call to Action: How Stakeholders Can Support Small Businesses in the Green Economy 

The transition to a green economy is a shared responsibility. Here’s how different stakeholders can play a pivotal role in ensuring small businesses have the access and support the need to succeed:  

• CDFIs & ESOs: Participate in GBA training programs to better serve small businesses and expand green business financing options. 

• Funders & Investors: Invest in programs that build the capacity of CDFIs, ESOs and small businesses to adopt sustainable practices, contributing to the growth of the green economy. 

• Small Business Owners: Explore available sustainability incentives, partner with CDFIs and ESOs for support, and learn how green investments can help reduce costs, improve efficiency, and boost long-term growth. 

A more resilient green economy is possible, but it requires collective effort. Together, we can help small businesses thrive in the green economy. Learn more, visit https://www.gba.prosperitynow.org/.