Green entrepreneurship and SDG performance: evidence from small and medium enterprises

In 2015, the United Nations General Assembly introduced the “2030 Agenda for Sustainable Development”, which includes 17 Sustainable Development Goals (SDGs), along with 169 specific targets and 232 indicators (Chams and García-Blandón, 2019; Chang et al. 2024; Montiel et al. 2021; Suchek et al. 2021; United Nations 2015; Walsh et al. 2020). These goals, established to address global challenges and create a sustainable future, span the economic, social, and environmental dimensions of sustainable development and are guided by the principles of people, planet, prosperity, peace, and partnership (Chams and García-Blandón, 2019). To comply with the UN’s sustainable development goals, firms are motivated to seek ways to engage with them effectively (Chang et al. 2024).

Sustainability encompasses not only environmental and social dimensions but also economic considerations, all of which collectively are known as the triple bottom line (Elkington 1997; Homer et al. 2025). Organizations are central to achieving sustainability because they can balance economic prosperity with social equity and environmental protection, thereby acting as a pivotal factor in fulfilling the SDGs (Mahajan et al. 2024). Indeed, the increasing global urgency for firms to actively participate in sustainability initiatives has reached a critical tipping point, necessitating effective organizational responses (Azmat et al. 2023) and driving firms to align with economic, social, and environmental sustainability (Lim 2022). Among the 17 SDGs, SDG 8 and SDG 12 are strongly relevant to this imperative. For example, SDG 8 emphasizes the promotion of sustainable economic growth and the creation of high-quality employment opportunities (Liu et al. 2024; Zaidi et al. 2025), while SDG 12 refers to energy and resource efficiency and the development of environmentally friendly workplaces (Beccarello and Di Foggia 2022; Walsh et al. 2020; Lim 2022). Both goals seek to support sustainable growth, efficient resource utilization, equitable prosperity, fair working environments (Chams and García-Blandón, 2019; Walsh et al. 2020; Zaidi et al. 2025), and a friendly ecosystem (Fernandes and Ferreira 2022). From a business perspective, the primary objectives of SDGs 8 and 12 are to encourage sustainable economic development that prioritizes people and creates enhanced job opportunities, particularly for youth and women (Suchek et al. 2021; United Nations 2015). Investigating how firms leverage green entrepreneurship in practice to achieve SDGs is crucial, because firms face increasing global pressures to demonstrate their contributions toward sustainable development. However, despite wide theoretical acknowledgment of green entrepreneurship (e.g., Neumann 2022; Lotfi et al. 2018), prior studies have rarely investigated how existing firms specifically enact and operationalize green entrepreneurship to achieve measurable sustainability outcomes (e.g., Demirel et al. 2019; Shepherd and Patzelt 2011). Empirically clarifying this process could therefore provide critically important practical guidance for firms to effectively integrate sustainability into their core business practices and could offer practical guidance on optimizing firms’ strategies to enhance their sustainability performance. Such an integration would allow firms’ goals to be associated with social innovation performance (e.g., employee health and safety, an increase in total employment) and eco-innovation performance (e.g., reduction of environmental impacts and energy consumption) (Chang et al. 2024; Acquah et al. 2022)

Green entrepreneurship can play a significant role in driving social and eco-innovation by enabling firms to address sustainability challenges (e.g., Allen and Malin 2008; Demirel et al. 2019; Neumann 2022; Trapp and Kanbach 2021). Green entrepreneurship encompasses commercially oriented business practices that prioritize technological development and innovative processes that are designed to address global environmental challenges, thereby mitigating human impacts on the natural environment (Demirel et al. 2019; Potluri and Phani 2020; Zhao et al. 2021). Green entrepreneurship involves addressing sustainability issues such as energy efficiency, waste reduction, and responsible resource management through strategic and operational measures, thereby aligning with Sustainable Development Goals 8 and 12. Building upon this foundation, green entrepreneurship can be conceptualized as an integration of skills, knowledge, abilities, and attitudes that enable organizations to implement environmentally sustainable practices, foster eco-innovation, and achieve long-term sustainability goals. Ultimately, green entrepreneurship drives a firm’s success and long-term viability (Lofti et al. 2018), because it empowers employees to enhance their environmental capabilities and it fosters eco-conscious attitudes (Demirel et al. 2019), which are important for improving a firm’s environmental performance (Trapp and Kanbach 2021). Concurrently, there is a growing interest among academicians and industry professionals to enhance the understanding of the roles of green entrepreneurship in directly and indirectly improving sustainability outcomes (SDGs 8 and 12) (Allen and Malin 2008; Demirel et al. 2019; Kraus et al. 2020; Modal et al. 2023; Mrkajic et al. 2019; Neumann 2022; Trapp and Kanbach 2021).

Existing studies on green entrepreneurship have focused primarily on conceptual development and theoretical possibilities, exploring how individuals recognize environmental opportunities, how green entrepreneurship emerges from market failures and environmental uncertainties, and how green entrepreneurship can be developed (Dean and McMullen 2007; York and Venkataraman 2010). However, these studies have failed to sufficiently address how existing firms translate green entrepreneurship practically into tangible sustainability outcomes (Hall et al. 2010; Shepherd and Patzelt 2011). Firms, unlike individual entrepreneurs, operate within complex stakeholder environments involving customers, employees, and regulators, which together significantly shape and constrain the firms’ strategic actions (Chang et al. 2022; Corbett and Montgomery 2017). This fundamental difference highlights the critical gap in empirical evidence regarding the firm-level implementation of green entrepreneurship and its actual impact on achieving SDG targets (Demirel et al. 2019). Without such evidence, it remains unclear how firms can effectively operationalize green entrepreneurship to realize measurable sustainability outcomes, and the dearth of information underscores the need for further empirical research in this area (Demirel et al. 2019). To address that research gap, therefore, our study empirically examined how green entrepreneurship influences SDG performance, with a particular focus on SDGs 8 and 12. We specifically investigated the internal mechanisms (green strategic planning) and external conditions (governmental policy support) that facilitate firms’ effective implementation of green entrepreneurship. By clarifying these organizational and policy-level factors, our study provides actionable insights into how firms can overcome resource constraints and successfully operationalize sustainability-focused practices. In doing so, we contribute to a clearer understanding of the practical pathways through which green entrepreneurship can lead to tangible sustainability outcomes.

While the financial and resource-related constraints associated with green entrepreneurship may pose difficulties, the concept’s potential as a transformative driver of sustainable innovation cannot be overlooked. Green entrepreneurship, when aligned with targeted training, can provide a significant foundation from which firms can overcome these barriers. Specifically, green entrepreneurship, through its emphasis on developing knowledge, skills, abilities, and attitudes related to sustainability and innovation, offers a pathway for firms to navigate these complexities simultaneously and align themselves more closely with SDG 8 and SDG 12. Firms thus can leverage their entrepreneurship as a strategic resource for mitigating paradoxical challenges, and that can drive meaningful social and environmental outcomes. This goal necessitates further investigation into the mechanisms that enable green entrepreneurship to transcend its perceived limitations and unlock its full potential in fostering innovation and achieving SDG performance (relating particularly to SDGs 8 and 12). Previous research has suggests\ed that general green training lacks the targeted depth necessary to address the specific sustainability challenges aligned with the SDGs (Cabral and Lochan Dhar 2019; Chang et al. 2024). Integrating green entrepreneurship—focused on sustainability-oriented knowledge, skills, abilities, and attitudes—with structured internal processes and external policy support––can bridge that shortage, enabling firms to more effectively pursue SDG 8 and SDG 12. Therefore, our research has specifically addressed the following questions:

The roles of green strategic planning and governmental policy support emerge as important in ensuring that green entrepreneurship’s potential is fully realized. Green strategic planning ensures that the necessary competencies are operationalized into detailed, measurable strategies (Whitmarsh and Corner 2017). The ability to formulate precise green plans, systematically assess strategic options, and align objectives with regulatory frameworks, such as the Carbon Border Adjustment Mechanism (CBAM), is integral to achieving meaningful environmental outcomes (Truant et al. 2024a, b; Zhang et al. 2023). Without such structured planning, the impact of green entrepreneurship may remain limited, because firms may lack the ingredients to channel their capabilities into consistent and impactful actions. Green strategic planning serves as the bridge between firms possessing green entrepreneurship and realizing their potential to drive social innovation (SDG 8) and eco-innovation (SDG 12) (Chams and García-Blandón, 2019; Montiel et al. 2021; Van Bueren et al. 2025). In addition, governmental policy support plays a moderating role, enhancing the effectiveness of green entrepreneurship, green strategic planning, and SDG performance. Policy frameworks provide external incentives, guidance, and accountability mechanisms that encourage firms to prioritize carbon reduction and sustainability (Beccarello and Di Foggia 2022; Liu et al. 2024). For example, policies promoting renewable energy adoption, waste reduction, and lifecycle assessments create an enabling environment in which firms can implement carbon-focused strategies (Truant et al. 2024a, b), thus ensuring that the firms not only meet regulatory requirements but also contribute significantly to achieving the SDG targets (Walsh et al. 2020).

Grounded in the Resource-Based View (RBV), in this study we hypothesized that green entrepreneurship is positively associated with SDG performance, with that relationship being mediated by green strategic planning. Furthermore, we proposed that the mediation effect is moderated by governmental policy support, thereby amplifying the impact of green entrepreneurship on SDG performance. Incorporating 2512 senior managers’ responses from 726 electronic and service small and medium-size enterprises (SMEs) from Taiwan, our findings reveal that green entrepreneurship contributes significantly to SDG performance. Furthermore, green strategic planning serves as an important mediator in that relationship, while governmental policy support acts as an important moderator, amplifying the overall impact.

Our findings make four important contributions. First, our study extends the resource-based view by positioning green entrepreneurship as a critical resource influencing SDG performance. We highlight the strategic importance of green entrepreneurship by demonstrating its role in equipping firms with the green entrepreneurship knowledge, skills, abilities, and attitudes necessary to address sustainability challenges. To date, the RBV has focused on intangible assets as firms’ resources (Barney 1991). Our research extends this perspective by emphasizing green entrepreneurship as representing essential resources that transform a firm’s capabilities and align them with sustainability objectives. This extension of the RBV to transformative essential resources offers a novel understanding of how intangible resources can be mobilized to achieve environmental sustainability and SDGs.

Second, our study contributes to the emerging stakeholder-based extension of the RBV (the SRBV) by illustrating how green entrepreneurship interacts with external mechanisms, such as governmental policy support, to drive firms’ performance in achieving the sustainability targets valued by society. While the SRBV has sought to integrate stakeholder concerns into the value creation process (Alvarez et al. 2020; Barney 2018; Freeman et al. 2021), the specifics of how stakeholder-oriented mechanisms operate within firms remain underexplored. Our findings suggest that governmental policy support acts as a critical moderator that amplifies the impact of green entrepreneurship on green strategic planning, enabling firms to align their internal capabilities with external environmental demands. This provides a practical lens through which firms can balance their value-creation efforts between business objectives and societal expectations.

Third, we reveal green strategic planning as a significant mediator that links green entrepreneurship to SDG performance, and particularly to SDG 8 and SDG 12. This mediation effect explains the mechanisms through which firms translate their green entrepreneurship into strategies that deliver sustainability outcomes. By establishing green strategic planning as the channel through which green entrepreneurship impacts SDG performance, our study offers a nuanced understanding of how firms utilize their resources to achieve sustainable development. Furthermore, this mediation is shown to be moderated by governmental policy support, thereby highlighting the importance of regulatory frameworks in enabling firms to maximize the effectiveness of their sustainability strategies. This dual-path model enriches the theoretical landscape of sustainability research by linking the RBV, SRBV, and organizational strategy.

Finally, we provide empirical evidence highlighting the significance of integrating green entrepreneurship, green strategic planning, and governmental policy support to improve SDG performance. Our study addresses the call for greater exploration into the specific mechanisms and conditions under which firms can effectively contribute to SDG targets (e.g., Ali et al. 2023; Cabral and Lochan Dhar 2019; Chams and García-Blandón, 2019; Chang et al. 2024; Fernández-Méndez et al. 2025; Jain and Malhotra, 2025; Walsh et al. 2020). By detailing and focusing on SDGs 8 and 12, we align our research with global priorities and demonstrate how firms can achieve sustainability goals and also enhance their own competitive advantage. Our research further offers actionable insights for managers and policymakers who are seeking to strengthen organizational contributions to sustainable development.

The resource-based view theory posits that firms can gain competitive advantages by relying on unique and valuable resources, with firms able to leverage these assets for sustained benefits (e.g., profitability). At the same time, these resources are challenging for competitors to imitate or substitute, which helps firms to secure a long-term competitive edge (Barney 1991; Wernerfelt 1984). Green entrepreneurship encompasses employees’ skills of embracing problem-solving in dealing with sustainability issues, knowledge of the natural environment, abilities and capacity to improve green job performance, and positive attitudes in maintaining green processes within the job operation (Demirel et al. 2019; Trapp and Kanbach 2021). Grounded in the RBV, green entrepreneurship is therefore a unique and valuable resource and strategic asset that is critical for maintaining a sustainable competitive advantage (Chen et al. 2023). Green entrepreneurship guides firms to implement energy-efficient practices, recycling processes that directly reduce operational costs and environmental impacts on the firm, knowledge of environmental regulations and standards, and the ability to innovate in product design and production processes to minimize the firm’s carbon footprints (Cabral and Lochan Dhar 2019). Green entrepreneurship is expected to cultivate a culture of sustainability within organizations, embedding a low-carbon mindset throughout operational and decision-making processes (Cabral and Lochan Dhar 2019). This strategic integration enhances the firm’s reputation and competitiveness by aligning the firm’s daily operations with environmental sustainability goals (Chang et al. 2024).

In addition, by extending the traditional RBV, the Stakeholder Resource-Based View underscores the importance of integrating stakeholder interests and resources into the firm’s strategic assets (Clarkson 1995; Freeman 1984). The SRBV emphasizes the necessity for organizations to incorporate stakeholder engagement into their processes of creating and appropriating value (Alvarez et al. 2020; Barney 2018; Barney et al. 2021; Freeman et al. 2021). In this framework, stakeholders are seen not only as contributors but also as resources themselves (Barney et al. 2021; Chang et al. 2024; Harrison et al. 2010), fully integrated into the firm’s operational strategies (Bouguerra et al. 2023). Nonetheless, the SRBV does not adequately address how these stakeholder interactions influence a firm’s efforts in sustainability and business within the context of green initiatives––it suggests that stakeholders should derive benefits from their association with the firm. We then interpret this interaction through the firm’s achievements in meeting SDGs, and particularly SDG 8 and SDG 12, which focus respectively on social-innovation and eco-innovation performance. Thus, green entrepreneurship is not only important under the RBV but also acts as a driving force in the SRBV, guiding organizational efforts toward creating value that benefits both the stakeholders and the organization itself. While engaging with green entrepreneurship, stakeholders such as customers, employees, and regulatory bodies are each important in their own right (Ali et al. 2023; Cabral and Lochan Dhar 2019; Trapp and Kanbach 2021), and their demands for sustainable practices encourage firms to continually innovate and improve their green management strategies. This stakeholder integration not only supports a firm’s compliance with current regulations but also anticipates future environmental standards, securing long-term sustainability as well as the firm’s competitive edge (Ali et al. 2023; Hart and Dowell 2011; Trapp and Kanbach 2021). Building upon the work of Cabral and Lochan Dhar (2019), four dimensions can be related to green entrepreneurship—green entrepreneurship skills, green entrepreneurship knowledge, green entrepreneurship abilities, and green entrepreneurship attitudes. Green entrepreneurship knowledge involves an understanding of the facts, relationships, and concepts concerning the carbon cycle, carbon reduction technologies, and strategies within the broader environmental context. For example, the carbon cycle involves the exchange of carbon among the atmosphere, oceans, soil, and living organisms, regulating the Earth’s climate and carbon balances, with activities such as deforestation disrupting this cycle by reducing the trees that are available to absorb atmospheric CO₂, and thereby increasing net emissions (BBC News 2021; (Karadayı et al. 2025). Carbon reduction technologies include renewable-energy solutions such as solar and wind power, which produce electricity and minimize CO₂ emissions (International Energy Agency 2021). Moreover, strategic approaches to carbon management include adhering to regulatory compliance, implementing sustainable supply chain practices, conducting lifecycle analyses to assess environmental impacts, and engaging stakeholders to support sustainability initiatives (Lintukangas et al. 2023; Truant et al. 2024a, b). Lifecycle analyses provide a systematic way to measure carbon emissions across supply chains, offering a critical tool for reducing environmental impacts and promoting transparency (Truant et al. 2024a, b). By integrating green entrepreneurship knowledge into operations and planning, not only can organizations mitigate environmental impacts, they can also position themselves as pioneers in the transition to a low-carbon economy, enhancing their competitive advantage and aligning with evolving environmental standards and societal expectations within a market (Chang et al. 2024; Lintukangas et al. 2023). This knowledge enables employees to recognize and implement strategies that reduce carbon emissions and enhance organizational sustainability (Cabral and Lochan Dhar 2019; Ozbey et al. 2024; Pagiaslis and Krontalis 2014; Ali et al. 2023). For instance, an organization’s adoption of less-polluting industrial processes exemplifies the application of objective green entrepreneurship knowledge to reduce emissions and enhance operational sustainability. Moreover, the development of comprehensive green programs, which include waste management and pollution control, systematically applies environmental knowledge to enhance compliance with regulations and reduce ecological footprints.

Green entrepreneurship skills are important for reducing a firm’s carbon footprint by implementing energy-efficient solutions, managing waste, and optimizing resource use to achieve sustainability objectives. Beyond technical expertise, these skills involve critical problem-solving and innovation to address environmental challenges. For example, energy efficiency encompasses redesigning systems and processes, such as upgrading to high-efficiency HVAC systems to minimize energy waste (Mneimneh et al. 2022). In addition, effective waste management incorporates strategies such as process reengineering and circular economy principles, transforming waste into resources (Bassi and Guidolin 2021). Resource optimization focuses on sustainable practices such as water recycling and lifecycle analyses to reduce environmental impacts (Zhang et al. 2023). Equipping employees with green entrepreneurship skills enables them to identify areas for improvement, devise strategic solutions that are aligned with business and environmental goals, and drive innovation. These elements are critical for achieving regulatory compliance, advancing sustainability, and unlocking opportunities in the green economy.

Green entrepreneurship abilities are the innate or developed capacity to engage in and promote environmentally beneficial practices within the workplace. This dimension enhances an employee’s capability to contribute effectively to a firm’s environmental goals. These abilities enable individuals to integrate their green entrepreneurship knowledge and skills into everyday business operations, fostering a proactive approach to carbon management and ensuring that sustainability is embedded in all of the firm’s business processes (Gerhart 2005).

Finally, green entrepreneurship attitudes encompass the values, perceptions, and evaluations that individuals hold concerning carbon reduction and environmental sustainability. A positive green entrepreneurship attitude in the workforce encourages proactive engagement with sustainability initiatives and supports the adoption of behaviors that reduce environmental impacts. Developing a strong green entrepreneurship attitude is crucial for motivating individuals to participate in and advocate for environmental sustainability efforts within their roles and also in broader organizational contexts (Chen et al. 2023; Cabral and Lochan Dhar 2019).

Based as it is on the RBV, green entrepreneurship can be considered to comprise unique and valuable resources that support both social innovation and eco-innovation. Green entrepreneurship skills in recycling and reducing materials use contribute directly to the reduction of a firm’s environmental footprint, aligning operations with SDG 12’s focus on responsible consumption and production (Halberstadt et al. 2024; Tang et al. 2018). Simultaneously, fostering knowledge about processes that pollute less and manage waste more effectively supports SDG 8 by promoting sustainable economic growth and ensuring employee well-being (Amjad et al. 2021; Jabbour 2011; Yong et al. 2019). The ability to innovate and adapt to environmental challenges not only secures a firm’s competitive edge but also facilitates its compliance with evolving regulatory frameworks, thus enhancing both SDG 8 and SDG 12 performance. Moreover, the attitudes toward environmental protection embedded within green entrepreneurship foster a sustainable organizational culture––a culture that is crucial for maintaining long-term stakeholder relationships and enhancing the firm’s reputation and market position. Firms that value sustainability attract and retain talent that is committed to environmental goals, thus reinforcing a cycle of continuous improvement and innovation in green practices (Jabbour and Santos 2008; Yong et al. 2019).

Integrating green entrepreneurship within a firm’s strategic framework enhances its capacity to create value that resonates with internal and external stakeholders alike. This strategic integration, as advocated by the RBV, not only ensures adherence to environmental regulations but also positions the firm as a leader in sustainable practices, therefore attracting investment and customer loyalty (Chang et al. 2024; Mousa and Othman 2020; Renwick et al. 2013). Effective management of these competencies ensures that sustainability is a core component of strategic decision-making. Such strategic integration of green entrepreneurship leads to enhanced SDG performance, which is evidenced by achievements in eco-innovation, such as lowering energy consumption per unit of production, and “social innovation” (e.g., Arnal-Pastor and Berné-Martínez 2025), including improving workplace conditions and ensuring health and safety compliance (Chams and García-Blandón 2019; Van Bueren et al. 2025). The alignment of personal achievements with the firm’s environmental goals fosters a culture of environmental responsibility that is beneficial because employees value their contributions to a firm that demonstrates environmental responsibility (Jackson et al. 2012).

Green strategic planning refers to a structured approach to formulating, implementing, and evaluating strategies that are aimed at reducing carbon emissions and aligning organizational objectives with sustainability goals (Cabral and Lochan Dhar 2019). This process involves clear planning under the impact of the tariff of carbon incentive products relating to the Carbon Border Adjustment Mechanism, which was recently announced by the European Union (GOV UK 2024). Firms are encouraged to engage in the creation of precise carbon plans, well-defined procedures for addressing strategic challenges, and the assessment of alternative strategies (Curran and Carrasco-Farre 2024). Based on the resource-based view, green strategic planning can be seen as a valuable organizational resource because it allows firms to integrate internal capabilities with external demands, thus enabling a competitive advantage when pursuing SDGs 8 and 12.

Notably, green strategic planning mediates the relationship between green entrepreneurship and SDG performance by transforming the capabilities resulting from green entrepreneurship into structured, actionable strategies that contribute directly to sustainability objectives. Green entrepreneurship provides the foundation for a firm’s sustainability efforts (Cabral and Lochan Dhar 2019), whose impact on SDG performance can be highly related to the effectiveness of integrating these competencies into organizational strategies. Indeed, green strategic planning acts as the mechanism that translates these competencies into measurable outcomes. For instance, green entrepreneurship knowledge equips firms with an understanding of carbon reduction technologies and regulatory frameworks, such as the CBAM. Green strategic planning then ensures that this knowledge is systematically applied to formulate precise carbon strategies, assess alternatives, and align strategic objectives with regulatory requirements, thereby enhancing eco-innovation and contributing to SDG 12. In addition, green entrepreneurship skills, which include implementing energy-efficient practices and optimizing resource use (Cabral and Lochan Dhar 2019), further contribute to carbon reduction initiatives. Through green strategic planning, these skills are directed toward achieving explicit strategic objectives, such as minimizing waste and reducing emissions, which are essential for compliance with environmental standards and fostering responsible consumption and production. Similarly, green entrepreneurship abilities and attitudes, which reflect a workforce’s capacity and commitment to sustainability, are operationalized through structured planning that enables firms to address complex environmental challenges and maintain sustainable growth, thereby aligning with SDG 8. Grounded in the RBV, the green strategic planning process transforms knowledge and skills into strategic assets that drive sustainability outcomes. For example, the assessment of strategic alternatives and the systematic analysis of the business environment ensure that firms can implement solutions which optimize both social innovation (SDG 8) and eco-innovation (SDG 12). This mediation effect ensures that green entrepreneurship is not only leveraged effectively but also is strategically aligned with long-term sustainability goals, enhancing both organizational performance and societal impact. Therefore, we hypothesized:

Governmental policy support is another significant resource for firms navigating the complexities of environmental management and sustainability (Whitmarsh and Corner 2017). Grounded in regulatory frameworks such as the CBAM, governmental policy support provides a foundation for aligning knowledge and skills with environmental fulfillment. Governmental policy support encompasses explicit regulatory guidance, fiscal incentives, and compliance frameworks that strengthen firms’ ability to formulate and execute precise carbon strategies (Whitmarsh and Corner 2017). Governmental policy support reflects the government’s commitment to addressing climate change and to fostering the public’s willingness to engage in carbon reduction efforts. This support amplifies the effects that green entrepreneurship knowledge, skills, abilities, and attitudes have on strategic planning. Primarily, governmental policy support, by emphasizing clear objectives and compliance standards, enables firms to channel their green entrepreneurship into actionable and measurable strategies (Whitmarsh and Corner 2017). For instance, policies incentivizing eco-innovation and resource optimization strengthen the link between green entrepreneurship and strategic planning by providing firms with the tools and resources needed to operationalize their capabilities (Solodoha et al. 2023). The moderating role of governmental policy support ensures that firms operating within policy environments are better equipped to align their knowledge and skills with precise carbon plans and in so doing to achieve strategic objectives. Moreover, governmental policy support enhances the indirect effects of green strategic planning on SDG performance, specifically for SDG 8 and SDG 12. By reinforcing the implementation of carbon strategies, governmental policy support enables firms to translate their strategic plans into sustainability outcomes. For example, government incentives for adopting renewable energy technologies ensure that green strategic planning not only meets regulatory compliance but also contributes directly to eco-innovation and social innovation, the key pillars of SDG performance.

Figure 1 presents the study’s conceptual model.

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Driven by the important role of green entrepreneurship in advancing a firm’s sustainability performance, yet recognizing the insufficient extant literature’s theoretical and empirical examinations of green entrepreneurship on a firm’s sustainability performance, this study explored the interactions among green entrepreneurship, green strategic planning, governmental policy support, and sustainable development goal performance (specifically relating to SDG 8, in the form of social innovation, and SDG 12, in the form of eco-innovation). The findings provide meaningful insights into sustainability management strategies (particularly within small and medium enterprises). Although the importance of incorporating sustainability knowledge and skills into business operations has been widely acknowledged (Allen and Malin 2008; Cabral and Lochan Dhar 2019; Chams and García-Blandón, 2019; Demirel et al. 2019; Modal et al. 2023; Liu et al. 2024; Mrkajic et al. 2019; Neumann 2022), there remains a gap in understanding the transformation processes by which green entrepreneurship translates into measurable sustainability outcomes (e.g., Demirel et al. 2019). Our research addresses that gap by analyzing the mechanisms that connect green entrepreneurship to SDG performance, and the contextual factors (e.g., green strategic planning and governmental policy support) that enhance that connection.

The significant positive relationship between green entrepreneurship and SDG performance highlights the strategic value of equipping organizations with specialized knowledge, skills, abilities, and attitudes tailored toward carbon management. Anchored in Barney’s (1991) resource-based view framework, green entrepreneurship can be identified as a suite of unique, valuable, and inimitable resources that provide competitive advantages by fostering sustainability. This conception aligns with earlier studies emphasizing the role of sustainability-focused human resource practices in improving organizational environmental performance (e.g., Allen and Malin 2008; Chen et al. 2023; Modal et al. 2023; Mrkajic et al. 2019; Neumann 2022). By demonstrating the contributions of green entrepreneurship to achieving SDG 8 and SDG 12, this study builds upon and extends the extant literature connecting organizational resources to sustainability outcomes.

The current study also highlights the mediating role of green strategic planning in linking green entrepreneurship to SDG performance. By transforming the potential of green entrepreneurship into concrete strategies—such as detailed carbon reduction plans, evaluation of strategic alternatives, and alignment with regulations such as the Cross Border Carbon Adjustment Mechanism—green strategic planning operationalizes knowledge and skills into actionable frameworks. This finding enriches the resource-based view by illustrating that firm resources can be structured to drive sustainable innovation and performance. Consistently with studies such as those of Truant et al. (2024a, b) and Zhang et al. (2023), this study’s results highlight the importance of strategic planning as a pathway to sustainability. By framing green strategic planning as a mechanism for resource mobilization, our findings enhance the understanding of how green entrepreneurship leads to measurable sustainability achievements.

Finally, the results emphasize the moderating effect of governmental policy support, which strengthens the influence of green entrepreneurship on SDG performance through green strategic planning. This finding contributes to the stakeholder extension of the resource-based view, which integrates external pressures and incentives into resource-based frameworks (Alvarez et al. 2020; Barney 2018; Freeman et al. 2021). Governmental policy support provides the external guidance and accountability necessary to optimize internal resources for sustainability, emphasizing the interplay between organizational capabilities and regulatory frameworks. This research therefore not only broadens the scope of the RBV and SRBV literature but also offers practical insights for firms and policymakers aiming to meet SDG targets in environments with rigorous environmental regulations.