EU, 93 per cent of SMEs engage in green transition (but ecological impact still high)

Brussels – Europe’s small and medium-sized enterprises (SMEs) are committing to the green transition. According to the latest Eurobarometer, 93 per cent of these have implemented at least one resource efficiency measure, such as “energy saving, waste reduction and recycling.”

The results are positive and bode well, considering that the 25.8 million small and medium-sized EU enterprises contribute for as much as 63 per cent to all carbon dioxide emissions of European companies. This does not depend on the individual company. We are talking about an average of 67 tons of emissions versus 20,027 tons for an average large company, but multiplying the emissions of the individual SME by the millions of companies, the result grows exponentially. Furthermore, most EU SMEs are microenterprises (with less than ten employees), which are also the companies with the least resources to invest in green.

In the context of the SMEs European strategy, announced in March 2020, the overall goals of the Green Deal also address small businesses, such as the green transition to which the EU is firmly committed. Hence,  the Directorate General for Internal Market, Industry, Entrepreneurship and SMEs needs to understand where SMEs stand and give the Commission concrete tools to work with.

The Eurobarometer (flash) survey involved companies in the 27 European states, along with other European countries and the US. Responses were sought from the companies on actions or investments on energy efficiency, on the use of renewable energy, regarding obstacles noted in adopting a green approach, and, of great interest to the Commission, on what SMEs needed to do better.

The overall results are encouraging. 93 per cent of companies are committed. Action on waste reduction and energy conservation is preferred, followed by material conservation and reuse (major EU goals, also given the “anti-waste directive“). Commitment and an increased inclination to actions on resource efficiency were also detected, not uniquely, but increasing compared to past years (in Italy, only 1 per cent of SMEs are not taking any specific action).

From 2015 to 2024, the percentage of EU SMEs using predominantly renewable energy more than doubled (from 11 to 24 per cent), denoting a significant, if small, change. Green investment is less attractive for Europe’s small and medium-sized entrepreneurs, with 38 per cent of companies investing 1 per cent of their turnover in it and only 13 per cent investing (slightly) more.

Great sore points are administrative or legislative processes. European companies have difficulty untangling the skein of regulations and framework directives and find them complex—and costly—to implement. 26 per cent of companies say they have had “no difficulties at all.” From the EU, businesses are asking for “financial incentives” to help develop a range of green products or services, especially those most reluctant to do so. Businesses in 22 member states also ask for help identifying potential markets and customers, as well as technical support or advice.

In essence, the “Green Eurobarometer” on SMEs tells us that companies are getting busy, but some pieces are missing to really reduce their environmental impact. Finding resources is making some of them struggle, but so is the difficulty in understanding the transition legislation—simplification would be needed, especially for the benefit of micro-businesses. If one wants to be Fit for 55, Europe’s small and medium-sized enterprises will have to move from being “the backbone of emissions” to “the backbone of transition”.