Green transformation in small and medium sized enterprises a systematic literature review toward an integrated capability ecosystem framework

Green transformation (GT) has become a strategic priority for small and medium-sized enterprises (SMEs), yet existing research provides fragmented explanations of how internal organizational capabilities and external ecosystem collaboration jointly support this process. To address this gap, this study conducts a PRISMA-based systematic literature review of 71 Scopus-indexed studies published between 2010 and March 2026. The review critically synthesizes the literature to examine how green dynamic capabilities, stakeholder collaboration, digital transformation, and institutional support interact throughout SMEs’ GT. The findings identify four interrelated drivers of GT: green dynamic capabilities, stakeholder collaboration, digital transformation, and access to green finance. Collectively, the evidence suggests that SMEs strengthen GT by continuously developing internal capabilities while leveraging complementary resources through ecosystem collaboration, although the effectiveness of these mechanisms depends on supportive institutional environments and appropriate green finance instruments. Building on this synthesis, the study develops an ecosystem-capability perspective that conceptualizes GT as an ecosystem-enabled capability-building process linking internal capability development renewal with collaborative value creation. The review contributes by providing a process-based explanation of SMEs’ GT and offers evidence-informed implications for policymakers, SME managers, financial institutions, and ecosystem partners seeking to strengthen sustainability under resource-constrained conditions.