Impact Insights: The Power of Eco-Inclusive Enterprises and BDS Providers

SEED 20 Year Flagship Impact Report
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Gutierrez, Lina; Simon Mühlbauer und Mirko Zürker
2022 | SEED c/o adelphi research gGmbH
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SEED Impact Insights BDS Providers publication

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For more than 20 years, SEED has been supporting ecologically sustainable small and medium-sized enterprises (SMEs) and business development service (BDS) providers in Africa, Asia and Latin America. Every company plays a key role in improving the social, ecological and economic health of their society. This publication is based on a survey of 234 SMEs and 107 BDS providers that took place at the end of 2020. It reveals how ecologically sustainable companies and BDS providers are contributing to transformative change and how this can be scaled in the future.

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Making societies sustainable with SMEs and BDS providers

SMEs play a major role in the economy worldwide: 90% of all registered companies are SMEs, and they account for 50% of all jobs. In developing countries, they account for 35% of the gross domestic product. SEED has specialised in SMEs with green business models that operate in an ecologically sustainable manner. There is an increasing awareness of the contribution these companies make to society, which enables them to find support when it comes to financing and advancing their projects. Supporters include investors or business development services.

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The impact of ecologically sustainable SMEs

SMEs make an enormous contribution to achieving the Sustainable Development Goals (SDGs) and have a positive impact on the environment and climate by using resource-saving management and responsible consumption and production practices. 44% of the materials used by SMEs have been recycled and 43% of companies use sustainable agricultural practices – as a result, thousands of tons of waste have already been avoided.

In addition to the positive effects on the environment and climate, they also have an impact on society. These companies campaign for decent employment or gender equality, among other things. For example, 59% of the businesses are run by women.

Number Item
Number (or token)
13 SDGs
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Sustainable Development Goals
Description
SMEs contribute to the achievement of 13 of the 17 SDGs
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Impacting 13 out of 17 SDGs
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Goal 1: No poverty

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Goal 2: Zero hunger

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Goal 3: Good health and well-being

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Goal 5: Gender equality

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Goal 6: Clean water and sanitation

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Goal 7: Affordable and clean energy

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Goal 8: Decent work and economic growth

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Goal 10: Reduced inequalities

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Goal 11: Sustainable cities and communities

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Goal 12: Responsible consumption and production

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Goal 13: Climate action

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Goal 15: Life on land

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Goal 17: Partnerships for the goals

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High-quality green jobs

Another social aspect is the area of fair employment. The companies supported by SEED have a positive impact on local communities by creating green jobs that enable decent employment and, in particular, engage women, youth and poor people in their value chains. By promoting high-quality jobs and social inclusion, SMEs go beyond mere job creation.

In order for a company to receive the “green quality jobs” label, it must fulfil three of the following five categories:  

  • Living wage
  • Basic benefits
  • Opportunities for advancement
  • Opportunities for wealth creation
  • Fair working conditions

Based on these criteria, 70% of the SMEs surveyed offer “green quality jobs”. Most of them stated that they guarantee a living wage and fair working conditions, while 23% of them meet all five conditions.

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Climate change: mitigation and adaptation

With their green business models, SMEs help make economies more sustainable and resilient. The businesses supported by SEED are committed to mitigating and adapting to climate change at the local level. Since the impact of climate change is particularly noticeable for ecologically sustainable companies in countries of the Global South, they act as pioneers in taking concrete measures to counteract these effects. They apply technologies and practices (e.g. sustainable agriculture or afforestation) that serve to mitigate or adapt to climate change.

Fact Items
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Fact Item Title
Energy Saved
Description
Surveyed enterprises saved 2.7 million kWh of energy, equivalent to the energy used by 18,000 people in Kenya in 1 year
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Water Saved
Description
Surveyed enterprises saved 8 million m3 of water, equivalent to the water used by 470,835 people in Africa in 1 year
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Land Stewardship
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Surveyed enterprises sustainably managed 354 K ha of land, roughly 2.6 times the area of Jakarta, Indonesia
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Waste Reduced / Recycled
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Surveyed enterprises reduced or recycled 117 K tonnes of waste, equivalent to the waste disposed over 20 days in landfills in Delhi, India
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More impact with business development services

Providers of business development services (BDS) support SMEs in the development and scaling of their business models. This increases their reach and attractiveness to investors. SEED works with BDS providers and supports them by optimising their services through:

  • Training of trainers
  • Provision of toolkits
  • Developing their skills to support ecologically sustainable companies
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How do business development service providers work?

From the surveyed BDS providers:

  • The majority have a team of ten people
  • They support about 100 companies with their services
  • 61% work across the country in different regions and cities
  • 32% of their funding comes from companies, which speaks to the demand
  • 49% are active in the primary sector (extraction and use of natural resources)
  • The majority of companies that receive support are currently in the development phase (57%), i.e. the second phase
  • The majority of support goes to micro and small companies with 1 to 9 or 10 to 49 employees (95%)
  • Most of the supported businesses use the consulting services in the area of company structures and strategies (29%) and market research (22%)
Number Item
Number (or token)
50%
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of the companies supported by BDS
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work in rural areas
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graphic showing that the majority (61%) of BDS providers work on a country level
© SEED
graphic showing the sources of funding that SMEs are receiving funding from
© SEED
graphic showing that the sector which is mainly supported is the primary sector
© SEED
graphic showing that most of the supported enterprises are in the development stage
© SEED
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The SEED BDS+ programme for improved services

Over the past 15 years, more than 500 BDS providers have used the BDS programme from SEED to provide even better support to businesses. The primary focus here is ecologically sustainable companies. The result of the BDS programme is not only an increased awareness of how service providers help SMEs, but also a greater willingness to work with these companies.

Based on the experience of the past 20 years, SEED sees three levers that are essential for the successful further development of SMEs and accelerated transformative change: scaling, impact, funding.

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Green Entrepreneurship
Innovation & Sustainability
Structural Change & Sustainability Strategies

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