“Green” economy modernization of Ukraine

V.G. Potapenko1, R.B. Kornatovskyy2, A.L. Shylkina1
1. Institute of Green Economy (Kyiv, Ukraine)
2. Sumy State University (Sumy, Ukraine)
Ecological Marketing and Management
344 - 358


This article is devoted to the problems of “green” economy in Ukraine. The article examines barriers to “green” modernization of SMEs and possible ways to overcome them. It based on a survey of Ukrainian enterprises. The content of the article reveals the need to improve the regulatory framework and inform businesses about “green” economy modernization.

Increasing cost of energy and other material resources for industrial production, new environmental requirements fixed in the Association Agreement with the European Union and the increasing requirements for standards of living encouraged to modernization of the economy based on new technologies, advanced management systems of environmental safety. These processes that can be called a green modernization of the economy, are the basis of research.

The aim of the article. The main task of research consists in a socio-economic analysis of the main barriers for “green” modernization of SMEs and possible perspectives of overcoming them.

The results of the analysis. The basis of research is the survey of medium businesses Ukraine on "The green upgrading of your business" conducted by the Institute of Green Economy.

The survey was attended by 30 companies from Ukraine, belonging to medium businesses and was involved previous 6 profiles listed in the survey, for a total 36 companies.

The first set of questions examines the awareness of companies about "green" modernization of the business. Almost 40% of enterprises do not have enough information on how to make their business more environmentally friendly. The most informative source of knowledge about “green” upgrades were identified the local authorities, public and international organizations. Each third receives information from these institutions. Government agencies, private banks and chambers of commerce have less demand, their advice using 12 %. Almost all polled firms (91.6 %) believe that getting informational consultations about "green" economic modernization would help them to develop their business.

The second set of questions relates to permits for resource use, waste disposal, emissions into the atmosphere. In percentage permits for resource use, waste disposal, air emissions have less than one third of respondents, namely 27.8%. According to this information, we can conclude that the state system is imperfect, because 7 out of 10 organizations had trouble in obtaining the documentation. In addition, according to statistics, the state has problems with regulatory bodies, as two-thirds of companies do not have any permission.

The third set of questions includes questions of energy efficiency of company. From 36 companies, 29 gave a positive answer to a question about energy efficiency. The most popular measure was the room thermal insulation, and replacing or upgrading equipment placed second. The fastest growing segment is lighting – 22 % of all projects related to the replacement of lighting equipment for energy efficient and measures to control lighting.

The fourth set of questions related to alternative and renewable energy sources, only 11 % of companies are using at the enterprise alternative or / and renewable energy. The fifth set of questions – economy of natural resources. This question engaged by nearly two-thirds of organizations. These are: minimizing waste and recycling (47%), cost of raw materials (39%) and water (28 %).

The sixth set of questions connected with the introduction of environmental management and green production. About a third of companies has implemented an environmental management system at the enterprise: 34 % to improve the company's reputation; 26 % due to customers’ requirements and 24% to improve the efficiency and competitiveness of the company.

The main reasons that led enterprises to produce/offer environmental goods and services - is the foundation of their business (33 %) of the companies producing environmental products for the company's image (22 %) and to increase the competitiveness of the market (19.4 %).

The survey showed that only two firms (which is 5.6 %) had the experience of receiving concessional financing or investments for "green" upgrades. The first one entered from state agencies, another from an international organization.

Conclusions and directions of further researches. There are the following results, based on analysis of the information obtained from the survey.

Firstly, a “green” modernization of enterprises in Ukraine is at an early stage, as is fairly small number of organizations familiar with its principles, and only a few implement them into practice in their work, but the green upgrading of becoming a fashionable trend, which readily picked up entrepreneurs.

Second, the legal framework of Ukraine regulating the “green” modernization of the economy has many shortcomings.

Third, the Ukrainian business in most cases do not have adequate resources to large “green” innovation. Due to economic crisis, business leaders, first of all, think about saving companies instead of their development.

In the fourth, financial resources to the green upgrades are limited. At the moment only a few banks provide soft loans for the green upgrades of enterprise, government and international investments also extremely limited.

Fifth, Ukraine’s society needs to increase environmental awareness, both on the part of the manufacturer and the part of consumers, as many companies have no incentive to, for example, the production of environmental goods due to low demand.

However, in spite of all the current problems, every person, every company is confident that the green upgrade - a direct way to improve business in all areas and at all levels, ranging from environmental factors and ending with the image. 

barriers, energy efficiency, enterprise, “green” economy, modernization, barriers, drivers, ecology, environmental management

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