Table of Contents

  • Small and medium-sized enterprises (SMEs) play a significant role in Nordic economic development through creating employment, stimulating competition and developing new technologies and products. Nevertheless, these companies are often disadvantaged by internal and external constraints that prevent them from realising their full potential. Nordic governments acknowledge that environmental management forms one of these constraints, and accordingly its integration into working practices is supported by a range of public sector financial assistance schemes. However, to date there has been no exploration of the extent of this provision, nor is there any comparative knowledge of the impact that these “environmental incentives” have on the environmental performance or the economic competitiveness of Nordic SMEs.

  • This report presents the results of the research project into the availability and impact of environmental incentives for Nordic small and mediumsized enterprises (SMEs). The tasks were divided into two phases with inter-related objectives

  • Since the publication of the Brundtland Report, the international corporate response has contributed significantly to the operationalisation of sustainable development. Over the past ten years in particular, events such as the World Industry Conferences on Environmental Management have progressively explored and developed this theme, and the Business Charter for Sustainable Development, launched by the International Chamber of Commerce in 1992, has been a very influential part of this initiative. The Charter commits enterprises to improving environmental performance and demonstrates to governments and society that business takes its environmental responsibilities seriously. Since its launch, the ICC Charter has gained considerable support world-wide, having been signed by more than 2,300 companies and associations in over 50 countries, with virtually all economic sectors represented.

  • Within the Nordic countries, a range of environmental incentives is available for SMEs either directly or indirectly through intermediaries. In the first stage of this project, fifteen incentives were identified as meriting attention. Two points of clarification are necessary regarding the choice of schemes. Firstly, a number of the incentives are available to companies of all sizes, and so they are not exclusive to SMEs. However, they were included because they form part of the overall selection open to small and medium-sized firms. Secondly, the coverage includes existing and recently completed incentives in an approach designed to maximise the insights into different scheme types and experiences.

  • Within Danish Law, the Environmental Protection Agency administers integrated environmental initiatives – such as the Programme for Cleaner Products – in which new individual priority plans are devised each year. Formerly, there were 4 main parts to this programme

  • In a period of high unemployment in Denmark, the Green Job Grant was an initiative designed to create new environment-friendly jobs and contribute to a cleaner environment. The scheme was operational from 1997 until 2001. Initially very broad in scope, the grant was administered by a Green Secretariat in the Danish Environmental Protection Agency (EPA). In the first four years, support of DKK 350 million were made available, from which DKK 280 million were given out as grants, essentially divided in half between job-creation and environmental technology. In 2001, DKK 28.2 million was made available, and DKK 20 million was given out.

  • Finnvera, a public limited company specialising in risk capital, administers the Finnish Environmental Loan. One of Finnvera’s main responsibilities is to provide new loan and guarantee products for Finnish SMEs, and it should assist these companies to improve their competitiveness and performance in international markets.

  • An environmental technology loan known as the Norwegian Environment Fund was administered by the Norwegian Industrial and Regional Development Fund (SND) for two years during 1998–2000. The former Minister for Foreign Affairs – who was also a former Prime Minister – originally proposed the loan, and it was perceived as a demonstration that government was taking action to meet the Kyoto target, supporting technology that reduced emissions. NOK 250 million was the total allocation for the two-year period. All of this money was marked for company use, and some loans have already been paid back and returned to the Ministry of Finance, which re-allocates it to other tasks of government. If projects are cancelled and the money is not claimed, SND may reallocate it to new projects.

  • Ten years ago, the Norwegian Ministry of Environment established the Foundation for Sustainable Production and Consumption (GRIP). Through the provision of grants, the Foundation acts as an agent for promoting environmental policy dedicated to the furtherance of sustainable production and consumption. GRIP works primarily with industries that are not conventionally considered to be polluting in a legal sense, but that do have an impact on the environment through the consumption of goods, chemicals and energy, transport and refuse. The operating strategy is to co-operate with private and public enterprises in developing and testing methods to improve eco-efficiency, communicating these methods to other enterprises so they can initiate measures to reduce their environmental impact, and working for changes in framework conditions that will benefit the environment.

  • From 1997-2000, NUTEK administered the programme Design for the Environment in SMEs (also referred to as the Ekodesign programme). In content, this scheme sought to focus on products within an environmental management system, with a strong emphasis placed on research and development, meaning that the participants were mostly industrial research institutes and universities. The Environmental Design Grant programme was not open to individual companies, but rather to groups of companies. It involved approximately 20 projects and 120 companies over a threeyear period, and during this time, NUTEK’s budget for the scheme amounted to SEK 25 million.

  • From 2001, NUTEK has administered a grant programme on environment– driven business development (MAF). Drawing on the experience and results of previous programmes (MISF and MPU), this scheme seeks to increase existing levels of competence and upgrade the knowledge base. The overall aim of the programme is to strengthen the competitiveness of SMEs by stimulating them to develop their operations and their products from the perspective of sustainability. The focus is on the entire company, with improvements not only reducing environmental impact but also offering new business opportunities. The philosophy is that profit can be made fro from transition, based on being in the forefront of development. As in the previous programmes, NUTEK does not work directly with the companies, but instead through regional actors, who ultimately become project leaders for group applications. The projects are conducted through networks with active participation by SMEs.

  • In Section 2 of this report, the various environmental incentives available in the Nordic countries were reviewed from a comparative perspective. In this section, the comparative review is extended to draw together the company perspectives on the incentives surveyed in the second phase of this project.

  • Amongst public sector assistance for industry, environmental incentives in the Nordic countries are supporting a range of environmental investments which, in many cases, would not otherwise be realised.