Role of MSMEs in Ecosystem Restoration
SME World|July 2021
According to the Business and Sustainable Development Commission, sustainable business models could open economic opportunities worth $12 trillion and create 380 million jobs by 2030, with more than 50 per cent2 being located in developing countries.
Dr. Arvind Kumar

The SDG targets are ambitious and require transformation of public and private activities. This transformation is associated with adapting new business models, bringing in new innovation/ technology and doing business differently – more sustainably and more ethically. This process opens up new business opportunities for the private sector in general and particularly for MSMEs. According to the Business and Sustainable Development Commission, sustainable business models could open economic opportunities worth $12 trillion and create 380 million jobs by 2030, with more than 50 per cent2 being located in developing countries. Such opportunities for MSMEs have been identified under each goal. The discussion also focuses on selected business examples and good practice initiatives that support MSMEs and in turn contribute to the achievement of SDGs.

According to the World Bank, Micro, Small and Medium Enterprises (MSMEs) are defined as follows – micro enterprises: 1–9 employees; small: 10–49 employees; and medium: 50–249 employees.3 However, the local definition of MSMEs vary from country to country, and is based not only on number of employees, but also by inclusion of other variables such as turnaround and assets. MSMEs play an important role in the wider ecosystem of firms. Start-ups and young firms, which are generally small or micro firms, are the primary source of net job creation in many countries and are the driving force of innovation and sustainability in the private sector. There are about 365445 million MSMEs in emerging markets: 25-30 million are formal SMEs, 55-70 million are formal micro, and 285-345 million are informal enterprises.

Valuing Ecosystem Services

The Business & Sustainable Development Commission estimates forest ecosystem services have a potential value of US $140-365 billion a year by 2030. Deforestation and forest degradation account for 17 percent of global emissions -more than transport. Just few commodities like soy, palm oil and paper/pulp, are responsible for driving half of all deforestation. It is expected that a carbon price of US $50 per tonne by 2030 will open up major new opportunities in sustainable forest services, such as climate change mitigation, watershed services and biodiversity conservation, if mechanisms to pay for them develop too. One hundred and fourteen governments have made commitments to ecological restoration as part of their overall plans to tackle a changing climate, pledging to restore 162 million hectares of land. More and more enterprises are seeing the commercial potential in sectors related to ecological restoration, including those whose main value proposition is linked to forest and landscape restoration. This may be a direct link, enterprises that plant trees, for example, or an indirect one, such as companies that offer technology or consulting services for restoration. A restoration enterprise can also include companies whose revenues are not directly linked to restoration, but whose customers are drawn to them because they channel their profits toward restoration. Existing MSMEs and startups need to be supported with capacity building to tap the new business opportunities stemming from contributing to the SDGs.

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