Lakhasly

Over the last decade, the new product development (NPD) ecosystem witnessed a major shift in the tendency of governments and consumers toward environmental sustainability, which resulted in substantial changes in manufacturing and supply chain (SC) strategies.The platform financing has three key features that motivate the SME entrepreneurs to participate in the regulated GNPD programs: (i) needless of conventional intermediaries and associated challenges, the MSPs play a match-making role and enable SME entrepreneurs and investors to directly connect via a regulated digital platform; (ii) while decreasing the funding and investment costs, the MSPs enable the SME entrepreneurs and investors to reduce their fundraising and investment risks by channeling the accumulated capital into different streams (e.g., DF and EF); (iii) unlike the conventional DF mechanisms, the platform-based EF schemes are gaining significant popularity among the green entrepreneurs.8 By promoting EF, the MSPs can incentivize the investors and SME entrepreneurs to take part in GNPD and cooperate with host governments in attaining their green entrepreneurship goals while achieving higher profits and improved competitiveness.In 2019, the green new product development (GNPD) penetration rate in the U.S. rose to 37% (from 7% in 2011) and the end consumers were found to spend 5% more on eco-friendly products.1 It has been predicted that, by the end of 2021, the sustainable products sales in the U.S. alone will have a value among US$142.3 billion and US$150.1 billion.2 Among different sectors, transportation is recognized as one of the most polluting industries due to its substantial greenhouse gas emissions.3 Thanks to the effective intervention policies in the transportation sector,4 some leading car manufacturing companies have positively responded to the environmental protection programs and committed to reduce their CO2 emissions and control fossil fuel combustion.5 Driven by the growing intensity of market competition and to address the rising public awareness, some SME entrepreneurs have recently begun to diversify their product portfolio by offering both green and non-green products (Tseng et al., 2019; Wang et al., 2020).Founded in 2019 in the U.K., this online platform provides quantitative and practical solutions for reducing carbon emissions in the SCs of the worlds' largest polluting industries such as metals, oil and gas, minerals, and agriculture; hence, tracks the carbon footprints of SMEs' SCs to determine which operations are most vulnerable to rising payable costs of the carbon tax.Offering a diverse range of regulated entrepreneurial financing facilities, such as debt financing (DF) and equity financing (EF), theMSPs connect the SME entrepreneurs to a crowd of investors and facilitate their access to a portfolio of SCF solutions (Reza-Gharehbagh et al., 2021; Yang et al., 2017; Zheng et al., 2020).With the growth of information technology and the emergence of innovative SCF solutions (Choi, 2020; Gao et al., 2018; Reza-Gharehbagh et al., 2021; Yu et al., 2020), some governments decided to partner with digital platforms and offer the capital-constrained SCs access to platform financing solutions to fund their GNPD activities.However, due to their inherent complexities (e.g., excessively high interest rates and difficulty in securing required collaterals), these conventional methods are commonly disfavored by the SMEs (Wagner, 2021; Xu & Fang, 2020; Reza-Gharehbagh et al., 2020b).Thus, green entrepreneurship is emerged as a new strategy to address the existing conflicts between economic development goals and environmental sustainability (Wang et al., 2020).

Over the last decade, the new product development (NPD) ecosystem witnessed a major
shift in the tendency of governments and consumers toward environmental sustainability,
which resulted in substantial changes in manufacturing and supply chain (SC) strategies. The
“design-for-environment” was emerged as a revolutionary concept in manufacturing SCs,
aiming to integrate and embed the environmental aspects into the product design at an early
stage (Chen, 2001). In some sectors, such as automotive and fashion, environmental considerations (e.g., emission reduction) have had a significant influence on the NPD strategies
with a desire for achieving low-emission (sometimes zero) production systems (Fung et al.,
2021; Pujari et al., 2003; Zhu & He, 2017). Due to the urgency of preserving environmental
resources, progressive governments are paying more attention to the UN’s sustainable
development goals by playing a major role in greening critical SCs (Tseng et al., 2019).
Thus, green entrepreneurship is emerged as a new strategy to address the existing conflicts
between economic development goals and environmental sustainability (Wang et al., 2020).
In 2019, the green new product development (GNPD) penetration rate in the U.S. rose to
37% (from 7% in 2011) and the end consumers were found to spend 5% more on eco-friendly
products.1 It has been predicted that, by the end of 2021, the sustainable products sales in
the U.S. alone will have a value among US$142.3 billion and US$150.1 billion.2 Among
different sectors, transportation is recognized as one of the most polluting industries due to
its substantial greenhouse gas emissions.3 Thanks to the effective intervention policies in the
transportation sector,4 some leading car manufacturing companies have positively responded
to the environmental protection programs and committed to reduce their CO2 emissions and
control fossil fuel combustion.5
Driven by the growing intensity of market competition and to address the rising public
awareness, some SME entrepreneurs have recently begun to diversify their product portfolio
by offering both green and non-green products (Tseng et al., 2019; Wang et al., 2020).
However, establishing a solid presence in parallel markets is extremely challenging for SME
1 Read more here: https://www.environmentalleader.com/2019/11/research-shows-consumers-willing-topay-up-to-5-more-for-environmentally-friendly-products/.
2 Read more here: https://www.statista.com/statistics/956968/us-sales-value-of-sustainable-products/.
3 With 29% greenhouse gas emissions (reported in 2019), the transportation industry is identified as one of the largest contributors to the total greenhouse gas emissions. Read more
here: https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions#:~:text=Transportation%20(28.
2%20percent%20of%202018,ships,%20trains,%20and%20planes.
4 The EU is committed to air quality improvement and environmental protection. The EU standards and legislations aim to decrease the emission of NO2 and CO2 in the automotive industry (Read more here: https://ec.europa.eu/growth/sectors/automotive-industry/environmental-protection/
emissions-automotive-sector_en). The UK government has announced that 30–70% of new cars will be electric or hybrid by 2030. By 2040, they plan to end the new petrol and diesel cars sales, noting that in 10 years
later almost every car on the roads should be zero-emission. Read more here: https://www.gov.uk/government/
news/government-launches-road-to-zero-strategy-to-lead-the-world-in-zero-emission-vehicle-technology
5 For instance, specialized in producing consumer-oriented and top-modern electrical vehicles, the Tesla
Motors Incorporation have so far reduced a total of 19,277,610.40 tons of CO2 emission in the U.S Read more
here: https://www.tesla.com/impact-report/2020.
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Annals of Operations Research (2023) 331:285–319 287
entrepreneurs due to the unique problems they face (e.g., market volatility and funding
shortages) in initiating and sustaining their SC activities (Chen, 2001; Zhu & He, 2017). In the
automotive industry, for example, developing a portfolio of new green and non-green products
demands a huge initial capital investment not only to develop the manufacturing capabilities
but also to fund the required R&D (Zhu & He, 2017). To address these issues, several supply
chain finance (SCF) schemes, such as bank credit financing (BCF), trade credit financing
(TCF), and partial credit guarantee (PCG), have been developed by financial institutes (Asian
et al., 2020). However, due to their inherent complexities (e.g., excessively high interest rates
and difficulty in securing required collaterals), these conventional methods are commonly
disfavored by the SMEs (Wagner, 2021; Xu & Fang, 2020; Reza-Gharehbagh et al., 2020b).
With the growth of information technology and the emergence of innovative SCF solutions (Choi, 2020; Gao et al., 2018; Reza-Gharehbagh et al., 2021; Yu et al., 2020), some
governments decided to partner with digital platforms and offer the capital-constrained SCs
access to platform financing solutions to fund their GNPD activities. As a result, multi-sided
Fintech platforms (MSPs) have rapidly replaced the conventional SCF schemes and gained
substantial traction among the capital constrained SCs engaged in the green entrepreneurship. The MSP financing is now recognized as a viable means that not only addresses the
budget shortfall of capital-constrained SCs but also enables risk-averse investors and SME
entrepreneurs to hedge against the uncertainties of the GNPD market. For example, the
“Green Finance Framework” is a transparent technology-enabled platform developed by a
Norwegian company, MIRIS.6 The platform helps users in choosing, tracking, and analyzing
the flow of funds in different projects. The platform’s design and structural components are
inspired by the Green Bond Principles, which were established by the International Capital
Market Association. CarbonChain7 is another example that assists businesses in applying and
receiving green finance. Founded in 2019 in the U.K., this online platform provides quantitative and practical solutions for reducing carbon emissions in the SCs of the worlds’ largest
polluting industries such as metals, oil and gas, minerals, and agriculture; hence, tracks the
carbon footprints of SMEs’ SCs to determine which operations are most vulnerable to rising
payable costs of the carbon tax.
Offering a diverse range of regulated entrepreneurial financing facilities, such as debt
financing (DF) and equity financing (EF), theMSPs connect the SME entrepreneurs to a crowd
of investors and facilitate their access to a portfolio of SCF solutions (Reza-Gharehbagh et al.,
2021; Yang et al., 2017; Zheng et al., 2020). The platform financing has three key features that
motivate the SME entrepreneurs to participate in the regulated GNPD programs: (i) needless
of conventional intermediaries and associated challenges, the MSPs play a match-making
role and enable SME entrepreneurs and investors to directly connect via a regulated digital
platform; (ii) while decreasing the funding and investment costs, the MSPs enable the SME
entrepreneurs and investors to reduce their fundraising and investment risks by channeling
the accumulated capital into different streams (e.g., DF and EF); (iii) unlike the conventional
DF mechanisms, the platform-based EF schemes are gaining significant popularity among
the green entrepreneurs.8 By promoting EF, the MSPs can incentivize the investors and SME
entrepreneurs to take part in GNPD and cooperate with host governments in attaining their
green entrepreneurship goals while achieving higher profits and improved competitiveness.