Energizing <scp>Small and Medium‐sized Enterprises</scp> for environmental sustainability in poor Europe: Do green finance and bureaucratic quality matter?

Abstract

Abstract The sacrosanct role played by small and medium‐sized enterprises (SMEs) in shaping economic realities in Europe resonates the accompanying impact of their activities on the environment. Furthermore, the unequal access to green finance across various sizes of small and medium enterprises alongside low level of bureaucratic quality in low‐income nations in Europe further complicates the attainment of climatic targets by 2050. The study investigates the SME‐environmental sustainability link amidst the moderating role of green finance and bureaucratic quality in selected low‐income nations in Europe. Findings show that SMEs increased carbon emissions across all quantiles in the selected countries. The results from the interaction towed double‐ends; interaction between SMEs and green finance reduced carbon emissions significantly from lower to upper quantiles. The interaction between SMEs and bureaucratic quality aggravates the level of carbon emission across all quantiles. Relevant policy recommendations were proffered to the sovereign governments and relevant EU agencies within the manuscript.