Grants available to help small businesses manage rising sustainability demands

Today, Mastercard launched its latest Strive Innovation Fund. The fourth of its kind, this round offers up to €500,000 to up to 20 winners developing digital and data-first solutions that promote the growth of small businesses in Europe.

Mastercard Strive EU’s four innovation fund themes

The Fund seeks solutions that support small businesses to:

1. Unlock working capital and credit through embedded finance.
2. Go digital safely by bolstering cybersecurity.
3. Navigate evolving consumer preferences and regulatory expectations around environmental sustainability, which will be explored in this blog.
4. Harness artificial intelligence (AI) to save time and make money.

New environmental regulations are impacting small businesses.

Small and medium-sized businesses in the EU account for 40% of business-generated greenhouse gas emissions. While over half of them are concerned about climate change, only one-third have taken mitigating action. Small businesses play a crucial role in driving environmental sustainability, and they need support to address mounting demands from regulatory bodies and consumers alike.

Last year, for example, the EU established the Corporate Sustainability Reporting Directive (CSRD), which requires European businesses to disclose their environmental, social, and corporate governance (ESG) efforts and initiatives. While currently only larger enterprises have to comply, this is likely to require data from the small businesses in their supply chains. Small companies may lack the expertise and staff to execute this type of reporting. It is expected that CSRD will eventually apply even to smaller businesses, and so they need support to be prepared.

Similarly, the new EU’s Carbon Border Adjustment Mechanism aims to put a price on the carbon emitted during the production of carbon-intensive goods that enter the EU. It is expected that small businesses will be disproportionately impacted by this new measure, especially those importing goods from outside the EU.

Many small business owners are worried about these mounting regulatory pressures. Funding innovations that support small businesses to manage cost-efficient reporting and compliance could significantly help them navigate these pressures amidst the EU’s wider green transition.

Consumers’ sustainability demands are rising.

European consumers are also shifting their spending heavily toward companies that commit to environmentally sustainable packaging and practices, greater transparency on environmental impact, and commitment to social responsibility. Companies upholding these values are seizing advantages from those that have not sufficiently invested in sustainability. The value of opportunities emerging from the green transition has been projected to reach €10 trillion per year by 2030, and it’s vital that small businesses adapt their practices to maximize this opportunity.

Larger companies are increasingly incorporating sustainability into their business models, particularly around energy efficiency, waste reduction, water conservation, and emissions reduction, putting pressure on smaller businesses to follow suit to remain competitive.

Strive EU funding aims to capture the small business opportunity.

Increased ESG transparency and changing consumer demands could enable small businesses to gain market share in a rapidly growing green economy. The Strive EU Innovation Fund seeks solutions that support small businesses to manage these changes. If your organization is actively working on this topic, and you have a creative solution that you’d like to develop, please apply. Innovations could include:

• Regulatory compliance solutions that enable businesses to assess regulatory risks, manage compliance programs, and report compliance status; dashboards that provide small business owners with real-time insights into their compliance status, highlighting areas for improvement and potential risks; APIs that connect small business systems to regulatory data sources, enabling seamless integration of compliance processes into their business operations.
• Automated compliance solutions that equip small businesses with tools to automate compliance workflows.
• Collaborative compliance solutions that foster discussion within the small business community, to share knowledge, exchange best practices, and resolve compliance challenges.
• Solutions that help small businesses invest in green business models, minimizing the environmental impact of their operations.
• Solutions that help small businesses to differentiate by creating green industry products and services that appeal to environmentally conscious consumers.
• Many others — we welcome your ideas!

Please see our website to find more information and apply. Applications close on March 11, 2024.