Review Maps How Small Firms Go Green Through Capabilities and Ecosystems

Small and medium-sized enterprises increasingly treat green transformation as a strategic priority, but the research explaining how they actually achieve it has remained scattered across separate literatures. A new systematic literature review, published open access in Discover Sustainability, brings that fragmented evidence together and proposes an integrated framework linking internal capabilities with external collaboration.

The study, led by Nhat Nguyen Cong with colleagues, followed PRISMA guidelines to synthesize 71 Scopus-indexed studies published between 2010 and March 2026.

The analysis identified four interrelated drivers of green transformation in SMEs: green dynamic capabilities, stakeholder collaboration, digital transformation, and access to green finance.

According to the review, these drivers do not operate in isolation. The evidence suggests that SMEs strengthen green transformation by continuously developing internal capabilities while simultaneously drawing on complementary resources through ecosystem collaboration.

The synthesis also emphasizes that the effectiveness of these mechanisms is conditional. It depends on supportive institutional environments and on green finance instruments appropriate to the scale and risk profile of smaller businesses. Where regulation, incentives, or financing channels are weak, the same capability-building efforts may yield less results.

Building on this synthesis, the authors develop an ecosystem-capability perspective that conceptualizes green transformation as an ecosystem-enabled capability-building process. In this view, internal capability development and renewal are linked with collaborative value creation, so the firm and its surrounding network of stakeholders advance sustainability together rather than separately.

The review’s contribution is described as process-based: rather than listing static success factors, it explains how capabilities and collaboration interact over the course of a transformation.

The authors also outline evidence-informed implications for four audiences: policymakers, SME managers, financial institutions, and ecosystem partners. For smaller firms operating under resource constraints, the review suggests that sustainability progress rests on pairing internal learning with external partnerships and on securing financing suited to green investments. As with any literature review, the findings reflect the scope of the 71 studies analyzed, and the authors note the work offers implications rather than tested prescriptions.

Subject of Research: A systematic literature review of how small and medium-sized enterprises pursue green transformation through capabilities, collaboration, digitalization and green finance.

Article Title: Green transformation in small and medium sized enterprises a systematic literature review toward an integrated capability ecosystem framework

Article References: Cong, N. N., Do Thi Thuy, P., Mai, L. N. T., Thi, N. P., & Thi, H. H. (2026). Green transformation in small and medium sized enterprises a systematic literature review toward an integrated capability ecosystem framework. Discover Sustainability. https://doi.org/10.1007/s43621-026-04903-1

Image Credits: AI Generated

DOI: 10.1007/s43621-026-04903-1

Keywords: green transformation, SMEs, systematic literature review, PRISMA, dynamic capabilities, stakeholder collaboration, digital transformation, green finance, ecosystem, sustainability, Green, transformation