^1,2 Faculty of Economics and Business, Economic Studies and Development, Sebelas Maret University, Jl. Ir. Sutami 36 A Surakarta, Jawa Tengah, Indonesia

Email: dwiprasetyani_fe@staff.uns.ac.id

This study aims to analyze the role of SMEs in encouraging the concept of a green economy in Indonesia. The method in this study uses dynamic panel data with GMM estimates in the period 2015 to 2021. The GMM estimates in this study are used to determine the influence of SMEs in Indonesia to encourage the concept of green economy in the short and long term. The use of the green economy variable is measured using the green GDP indicator by adding the cost of environmental damage, namely the level of depletion and environmental degradation. The results of this study indicate that the role of SMEs in encouraging the concept of a green economy is still low. Recording and reporting on green economy activities is important so that they can be encouraged if appropriate so that they can be given a subsidy policy. Matters regarding the green economy need to be applied by the government in order to make decisions on a sustainable policy.