La decarbonization of companies is still far away. Only the11% of European companies in the medium sector it has a structured plan has been initiated to reduce carbon emissions.
It is the data that emerges from first edition of the barometer on progress of European SMEs of decarbonization, Published by Argos Wityu, an independent European group specialized in Private Equity investments, e Boston Consulting Group (BCG).
The study called “The Argos – BCG Mid-market Climate Transition Barometer” was conducted in July 2023 and involved 700 SME leaders in six European countries: France, Italy, Germany, Belgium, the Netherlands and Luxembourg.
SMEs are often ignored in initiatives to fight climate change but in addition to making a significant contribution to the economy they also contribute to greenhouse gas emissions.
For the EU, SMEs are responsible for two thirds of emissions
The European Commission states that SMEs could contribute up to two-thirds of total greenhouse gas emissions in Europe. Currently, the mid-market ecosystem is far from being in line with the European Directive on Corporate Sustainability Reporting (CSRD). This directive will require companies with more than 250 employees and a turnover of more than 40 million euros to disclose their environmental impact, including greenhouse gas emissions, following an annual report starting from 1 January 2026.
Given this observation, the question arises whether SMEs have truly understood the extent of the transformations needed and whether they are actively working to decarbonise their activities. What obstacles do they face and what opportunities does decarbonization offer?
Argos Wityu and BCG's research was therefore born from these questions.
Decarbonisation: awareness and opportunities
84% of the SMEs interviewed believe that reduction of greenhouse gas emissions is “important” or “critical”, highlighting the urgency of the problem for this sector. Among these, 71% see decarbonisation as aopportunities that can lead to benefits such as improved profitability and access to new markets, with short or long-term competitive advantages.
“There is no doubt that decarbonizing medium-sized businesses can generate strong opportunities in all sectors. Many investors, from family offices to large institutions, are willing to support these businesses in theirs Gray to Green transition and to help them become sustainable leaders,” he said Simon Guichard, Partner of Argos Wityu.
Decarbonization of SMEs: unstructured approach
Although 38% of SMEs interviewed say they have made significant investments in decarbonisation, only11% adopted a structured approach which includes measuring your greenhouse gas emissions, defining a roadmap, and making relevant investments.
"The Mid-market companies are in the early stages of their sustainability journey and their investments are still predominantly driven by regulations, energy prices and customer demand. The path towards a structured and complete approach is still long. It is absolutely essential to support SMEs with dedicated measures and tools if we want to achieve our climate goals,” he said Pietro Romanin, Managing Director and Partner of BCG.
The main differences in the approach to the matter do not come based on geographical areas but different dynamics emerge based on the type of property and sector. The 62% of companies listed on the stock exchange claims to have done so “strong investments”, while only 35% of privately owned businesses he did the same. At a sectoral level, significant disparities can be seen, with 51% of companies in the transport and logistics sector reporting that they have invested significantly, compared to a modest 24% of companies in high-temperature industries (such as metals, glass, ceramic, etc.).
Optimism for the future
Sail anyway optimism in SMEs. The majority of companies interviewed look positively towards achieving the objectives set for 2030, with 70% considering them feasible. There are three main obstacles: the lack of financial resources, the complexity of regulations and the lack of skills. To overcome these obstacles, they need significant support.
“Unlike large corporations, mid-market businesses rarely have sufficient scale to hire the necessary internal talent or to develop internal capabilities and achieve ambitious decarbonization roadmaps. Now we must help them transform their optimism into structured investments." The commitment of all stakeholders – regulators, investors, government agencies, business partners, solution providers – who address the specific needs of middle market companies, is critical,” he said Benjamin Entraygues, Managing Director and Senior Partner of BCG.
“To successfully complete the environmental transition, the medium-sized businesses will need strong support, specialized experts and financing. We are convinced that the first to initiate profound changes towards decarbonisation will benefit from a lasting competitive advantage,” he declared Louis Godron, Managing Partner of Argos Wityu.
