Ernoiz Antriyandarti

Global concern over environmental pollution has sparked the adoption of green business practices, which are essential for the sustainability of SMEs through green economy initiatives and renewable resources. This study aims to analyze the integration of circular and digital economy policies along with social protection policies in supporting green business innovation among culinary SMEs. By emphasizing the significance of government roles and innovation capabilities, the paper proposes that policies promoting environmentally friendly practices and social security can enhance sustainable performance in alignment with SDG principles. The study employs a quantitative approach, surveying 200 culinary SMEs in Surabaya City in Indonesia, a city known for its vibrant SME sector and commitment to sustainable practices. The data analysis, conducted using PLS-SEM through SmartPLS 4, reveals that circular economy policies (t-test = 6.503; p-value = 0.000) and social security (t-test = 3.848; p-value = 0.000) significantly enhance green business innovation, while digital economy policies are not significant (t-test = 0.725; p-value = 0.468). Furthermore, green business innovation positively impacts sustainable performance (t-test = 24.418; p-value = 0.000). However, internal innovation capabilities do not moderate the relationship between integrative policies and green business innovation. The findings indicate that government policies significantly influence green business innovation in MSMEs, particularly through circular economy regulations. Regulatory support and incentives are crucial for driving environmental sustainability and enhancing competitiveness. Strengthening digital economy policies through improved technology access and digital literacy will further support green innovation, while investments in internal innovation and human resources are vital for sustainable growth.

Acknowledgment
This study is funded by the Riset Kolaborasi Indonesia (Grant No. B/43869/UN38.III.1/LK.04.00/2024) by LPPM Universitas Negeri Surabaya.

Type of the article: Research Article

Abstract
Waste banks have emerged as a community-driven strategy that encourages households to sort and trade recyclable waste, generating economic value while reducing environmental burdens. This study examines the economic contribution of waste banks in rural areas and evaluates the level of community participation in their management. Data were collected through an online survey conducted from April to May 2024, involving 118 rural decision-makers, village heads, officials, village-owned enterprises’ (BUMDes) directors, and members of the village consultative body across Indonesia. Respondents represented from Java (34%), Sumatra (33%), Sulawesi (13%), Bali and Nusa Tenggara (7%), Kalimantan (5%), and Papua (3%), providing broad geographic coverage. A logit model was used to identify determinants of economic impact. Results show that routine waste bank operations, combined with training or socialization programs, significantly enhance economic benefits at the 1% level. Community participation in waste collection also makes a positive contribution. Overall, 70.3% of respondents reported improved village economic conditions, and 66.1% observed increased BUMDes revenue from waste bank initiatives. Participation analysis using Arnstein’s ladder reveals that most residents remain at the consultation stage, with limited decision-making power. Strengthening community empowerment and expanding capacity-building programs are, therefore, essential to maximize the social and economic potential of rural waste banks.

Acknowledgments
We would like to thank PT Bank Rakyat Indonesia (PT BRI) and Universitas Sebelas Maret [Sebelas Maret University] for the funding support and all the respondents who participated in this research. PT Bank Rakyat Indonesia (PT BRI) funded this research with Number 273.1/UN27.22/HK.07.00/2024 and Universitas Sebelas Maret [Sebelas Maret University] with Number 371/UN27.22/PT.01.03/2025.