Green recovery: Take a People, Profit, Planet approach to strengthen small firms, says CEO of Costa Rican trade agency

27 August 2021
ITC News

Create a national platform where small businesses compete for funding for projects to reduce energy use or manage waste, a process that strengthens them by cutting costs and opening access to new markets, says Pedro Beirute Prada, CEO, Export Promotion Agency of Costa Rica (PROCOMER).

As the world rebuilds from the COVID-19 pandemic amid the growing threats brought by climate change, there is even greater urgency to ensure that all economic activity, including exporting, is environmentally sustainable.

Costa Rica over the past 40 years has pioneered policies to protect its natural habitat. The United Nations recognized our country’s efforts with the Champions of the Earth Award for policy leadership in 2019. The award singled out the country’s drive to combat climate change, as shown by Costa Rica’s plan to decarbonize its economy by 2050.

At the Export Promotion Agency of Costa Rica (PROCOMER), we are very much integrated into our country’s sustainable development strategy. We encourage environmentally sustainable practices among small businesses, to improve their competitiveness and open new market opportunities. As questions raised by the pandemic lead many people to rethink unsustainable forms of consumption, there is growing demand for environmentally-friendly goods and services, including organic products.

Small businesses that develop sustainable strategies can differentiate from others in international markets and contribute to Costa Rica’s sustainability drive.

To assist small businesses to develop the needed skills and implement new approaches, PROCOMER uses a 3P strategy – People, Profit, Planet. We begin by identifying the initial level of sustainability in small businesses; follow with services that help companies transform or improve their value; and conclude by measuring the environmental impact.

Measuring small businesses’ environmental performance

We measure the environmental performance of small businesses using a Unique Diagnosis tool. By understanding requirements, gaps and specific needs of small firms throughout the country, we obtain valuable information that helps to define our institutional services and generate business intelligence. The tool also supplies data on how our services reduce environmental gaps by region and by sector, and identifies regions with the greatest environmental gaps.

The gaps detected help PROCOMER to develop exporter training programmes. Between 2019 and 2020, we’ve increased the number of training sessions by 10% and the number of people trained by 68%. Moreover, the information has led us to create environmental training sessions on greenhouse emissions, environmental standards and certification, renewable energies and water management.

In addition to bolstering sustainability capacities in companies through training, we provide small businesses with advice on managing sustainability projects and offer funding for their implementation.

Green Growth Platform spurs change

To help Costa Rican small businesses become more environmentally sustainable, productive and competitive, PROCOMER launched the Green Growth Platform in 2018. This aims to benefit 260 small-scale exporters or potential exporters over four years, representing 10% of the export sector.

Companies compete to take part in the platform, with those chosen obtaining seed capital to carry out transformative projects. These include environmental schemes to reduce water-carbon footprints, cut energy use, adopt clean energy and manage waste. The projects have cut CO2 equivalent emissions by small businesses, led to cost-reducing investments and increased exports of participating small businesses by about 31%.

For example, one women-owned small firm radically transformed its fruit cleaning and packaging, and increased exports. The firm reduced waste by 50% and water use by 97% at its packing plant. Given local water shortages and the challenge of legalizing wells, such results are critical. The company also obtained Rainforest Alliance certification, allowing it to access the European market. Exports rose 35% in one year.

Of the small businesses we support, 41% are in less developed regions and 45% are owned by women, demonstrating our commitment to inclusive development. The Green Growth Platform obtained the International Trade Centre’s global award in 2020 for the Best Inclusive and Sustainable Trade Initiative among trade promotion organizations.

Promoting green tech start-ups

PROCOMER also contributes to Costa Rica’s sustainability efforts by supporting start-ups in the environmental field. Our GreenTech initiative is an incubation programme for green technology start-ups with high export potential. It prioritizes start-ups that offer technological solutions with a positive ecological impact, have a viable product or service and show highly innovative business models.

The programme strengthens the entrepreneurial capacities of start-ups and accelerates their internationalization. Under it, experts provide company-specific advice on obtaining investment capital.

We at PROCOMER are convinced that export promotion bodies like ours play a key role in the drive to build back better and combat climate change.

This article has been drawn from the International Trade Centre’s flagship report, SME Competitiveness Outlook 2021. It takes on the theme of empowering the green recovery, showing how small businesses can rebuild to prepare for the looming climate crisis.

Small firms generate more than 50% of jobs and greenhouse gas emissions, so their resilience matters: Resilient companies were five times less likely to lay off employees during the pandemic, and more likely to have stable sales, according to new data in the report.

What’s more, small firms are the backbone of communities everywhere. Putting them at the heart of a green recovery can hasten the cultural and economic transformation required in times of climate change.

While small firms can help drive the green recovery, they can't do it alone. Business support organizations, governments, lead firms and international organizations have to provide incentives for small firms to lead the green transition. This report provides a 20-point Green Recovery Plan for key players to help small businesses become more competitive, resilient and green.