The scale of environmental and social challenges the world is facing today requires enterprises, both large and small, to develop sustainable innovative solutions that are economically, environmentally and socially viable. The purpose of this paper is to understand the sustainable innovation initiatives taken by small and medium enterprises (SMEs) and small business entrepreneurs and the impact on performance. The paper presents a systematic literature review of research in the area. 63 publications, drawn from academic databases, on sustainable innovation initiatives taken by SMEs were identified and analyzed. The findings reveal that majority of the initiatives taken by SMEs are related to product and process innovations, and focus has been on SMEs in the manufacturing sector. The review attempts a value chain analysis that brings out the importance given to activities under operations and manufacturing to support the initiatives. The paper highlights the performance measures used to measure and control the outcome of the innovation initiatives. Additionally, the paper highlights broad research themes, links them through a conceptual model and identifies research gaps in this area. The findings of the study will help professionals identify potential areas for innovation and allow academics to conduct further research using the identified research gaps.
