Climate change is causing serious harm to communities worldwide, leading to more frequent wildfires and prolonged droughts. The Earth’s average temperature is rising by about 0.2°C per decade, and if this trend continues, the negative effects will worsen in the future. To prevent severe economic, social, and environmental consequences, experts emphasize the need to limit the temperature increase to 1.5°C. However, according to the IPCC’S 6th Assessment Report which finds that “unless there are immediate, rapid and large-scale reductions in greenhouse gas emissions, limiting warming to close to 1.5°C or even 2°C will be beyond reach”.

In such a situation Entrepreneurs have the potential to play a crucial role in reducing greenhouse gas (GHG) emissions by creating and spreading innovative green solutions. In a world that’s grappling with the imperative of balancing economic growth, resource conservation, and pollution reduction, the concept of green entrepreneurship is gaining prominence. Public policies supporting green entrepreneurship can significantly contribute to the global endeavor to address human-induced climate change because reducing greenhouse gas emissions is a principle key to mitigate environmental crises.

“Business has the power to inspire, innovate, and solve environmental challenges. Green entrepreneurship is not just a choice; it’s a responsibility to create a sustainable future for generations to come.”

What is Green Entrepreneurship?

The term “Green entrepreneur” is a combination of 2 words that is entrepreneurship and environmental. A green entrepreneur operates a business that embraces eco-friendly practices to tackle environmental or social challenges. They enter the market by offering alternatives to traditional products, aiming to not only provide green products or services but also to promote awareness of eco-friendly practices. The concept of “green entrepreneurship” arises from merging key entrepreneurial elements like innovation, risk-taking, novel business ideas, and the social and ecological commitment of those involved in business.

Entrepreneurship plays a crucial role in advancing the goals of green growth. Traditionally, entrepreneurship is known for boosting economic activity and creating jobs. However, its significance has grown in addressing broader societal challenges, particularly in the realm of environmental sustainability.

Entrepreneurs contribute to this cause in two main ways:

• Entrepreneurs develop and introduce innovative products that promote environmental sustainability across various sectors.
• Entrepreneurs can collectively impact green objectives by adopting measures to enhance the environmental sustainability of their own businesses.

Despite ongoing discussions over the past two decades, there is no widely agreed-upon definition of green entrepreneurship. Various definitions have been proposed in academic literature and other research sources  prompting calls for a consensus on this matter.

In contemporary times, green entrepreneurs play a pivotal role in a country’s economic development. They serve as a catalyst for changing consumer behavior, launching innovative ideas, implementing them rapidly, and contributing to emerging thoughts. The perspective on green entrepreneurship varies significantly between developed and developing countries.

Developed nations and international organizations such as the World Bank, UNCTAD, OECD, UNIDO, WTO, and FAO often emphasize market opportunities and the term ‘green.’ In contrast, developing countries place greater emphasis on market needs and the term ‘entrepreneurship.’ This highlights a distinct viewpoint between the two groups regarding the importance and focus of green entrepreneurship.

From a developmental standpoint, “Green entrepreneurship” is an increasingly relevant concept that hasn’t received sufficient research attention. Policymakers grapple with challenges like global inequality and rising unemployment, while the impacts of climate change, biodiversity loss, and widespread destruction of ecosystems add to the vulnerability of already disadvantaged social groups and ecosystems.

Green entrepreneurship not only addresses these challenges but also plays a crucial role in generating employment opportunities. Additionally, the dynamics of technological progress and diversity are strongly influenced by the nature of innovation and its factors. The recent surge in the globalization of economic processes has significantly reshaped traditional approaches to innovation by enterprises. Despite notable strides in environmental accounting, reporting, technological research, and implementation, there remains a substantial gap in achieving sustainability.

Understanding the prerequisites for the emergence of “green innovation” is crucial, including what triggers and hinders it. It requires a systemic shift, encompassing changes in accounting, economics, and legal frameworks. A survey by Accenture (UN Global Compact-Accenture, 2010) reveals that sustainability has become a key global element in corporate business strategies, vital for the future of businesses. However, the global transition to a green economy is just beginning, and the urgency is pressing.

The core agenda of the Sustainable Development Goals (SDGs) is dedicated to achieving green growth. Simultaneously, the performance of the economy, especially within the environmental sector, plays a crucial role in influencing green entrepreneurship. In the European Union (EU), the environmental economy is outpacing the overall economy, indicating the commitment of EU Member States to foster a more sustainable model of economic growth). The contribution of the environmental economy to EU GDP rose from 1.6% in 2000 to 2.3% in 2018 (Eurostat, 2022). During the same period, employment in the EU’s environmental economy increased from 3.1 million full-time equivalents to 4.4 million full-time equivalents. Green entrepreneurship plays a pivotal role in generating these jobs.

Notably, the new jobs in the clean economy often require different skill sets compared to those becoming obsolete. For instance, in the automotive sector, there’s a shift towards roles favoring IT specialists, power electronics experts, and professionals in recycling and battery technologies.

Green entrepreneurship is propelled by societies recognizing the imperative to address environmental challenges. Growing concerns for sustainability drive a heightened demand for eco-friendly products and solutions. Globally, markets for environmentally-conscious businesses are expanding, with the Paris Agreement estimated to generate about USD 23 trillion in climate-smart investment opportunities in emerging markets from 2016 to 2030 (IFC, 2016). Policy makers wield substantial influence, directly supporting green entrepreneurs through funding, skills, and network enhancement. Indirectly, their implementation of environmental regulations and policies fosters new market opportunities. Legislation related to resource consumption, waste disposal, emissions, and environmental protection plays a pivotal role in steering production and consumption toward more circular and sustainable practices. In the upcoming decades, there will be rapid growth in industrialization, global population, and economic development. Resources are limited, and the challenge is to meet the needs of people. The only viable path to fulfill commitments for efficient and socially responsible operations in an environmentally friendly manner is through green entrepreneurship.