Small-and medium-sized enterprises (SMEs) can play a crucial role in advancing environmental and social well-being. Yet various-often conflicting-explanations have been offered to clarify why SMEs pursue sustainability. Some arguments foreground possibilities of profit maximization, whereas others emphasize individual values and convictions. Research supporting such contradicting explanations is often biased towards large enterprises or small, innovative frontrunners. In this article, we examine the underlying drivers of social and environmental interventions of SMEs by exploring empirical data from a survey of over 1,600 Canadian SMEs and complementary indepth interviews. We argue that sustainability actions of SMEs can be understood by viewing these firms as social actors-organizations that are shaped by individual values, internal and external interpersonal relationships, and are embedded in a social environment. This conceptualization directs attention to the full range of factors that shape sustainability engagement of SMEs and highlights frequently overlooked forms of sustainability-oriented actions.

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Entrepreneurship may be one entry point to trigger transformations toward sustainability. Yet, there is limited knowledge on the ability of small-and medium-sized enterprises (SMEs) to play a role in transformation processes, beyond the initial stages of niche innovation. Building on data collected through 125 interviews in Toronto, Vancouver and London, we examine perceived contributions of SME-led sustainable entrepreneurship to market transformations. Our data show that sustainable entrepreneurs face significant constraints in individually exercising influence over mass markets, as they encounter social forces that generate resistance to change. However, SMEs are able to act collaboratively to shape transformation processes. We propose three mechanisms of institutional co-evolution that capture these contributions: network learning, collective norm-construction and collaborative advocacy.

Entrepreneurship has emerged as a key element for experimentation and niche innovation in sustainability transitions. Yet, its contributions beyond this initial stage and the multi-pronged role that entrepreneurs can play in transformation processes remain elusive. In response, we conceptualize and empirically illustrate how entrepreneurs can contribute to innovations within firms and to city-wide processes of change. With insights from small- and medium-sized enterprises in European and North American cities, we develop a framework encompassing eight intervention types through which entrepreneurs shape urban sustainability transformations. We propose avenues for future research to better understand the distributed role of entrepreneurship and how it can contribute to shaping and accelerating change toward sustainability across integrated levels of urban transformations.