What is the EU Doing to Help SMEs to Achieve Green Transition?

With abrasive industry SMEs accelerating their green transition, the EU policy framework plays a crucial role in enabling the SMEs to turn current challenges into opportunities. Indeed, the transition to economic, environmental and social sustainability has become a major priority for the European Commission. With the European Green Dealproviding the overarching framework for the sustainability agenda, all major policy initiatives and investment programmes in the EU budget (Multiannual Financial Framework 2021-2027) are geared towards boosting the green transition. 30% of the EU budget will be spent to fight climate change, the highest share ever.

The most important among initiatives specifically aimed at SMEs is the SME Strategy for a sustainable and digital Europe, published by the European Commission in March 2020. The Strategy aims to help SMEs to lead the twin transitions to a sustainable and digital economy, which also means securing access to the right skills. The Strategy is a cross-sectoral initiative, intended to boost the capacity of Europe’s 25 million SMEs employing around 100 million people.

The Strategy aims to considerably increase the number of SMEs engaging in sustainable business practices. According to the Commission, “competitive sustainability is Europe’s guiding principle for the future”. Despite this, the Commission acknowledges that a third of SMEs report that they face complex administrative and legal procedures when trying to make their business more resource-efficient.

To build SMEs’ capacity for the green transition, the Commission is upgrading the European Enterprise Network with dedicated sustainability advisors. Their role is to assess the needs of SMEs and provide advice on investment in more resource-efficient and circular processes and infrastructure, finding relevant commercial partners, and encouraging peer-to-peer collaboration (click here to find your local EEN contact point).

Furthermore, the European Resource Efficiency Knowledge Centre (EREK) is working with SMEs to save resources (water, energy, waste) and engage in circular economy and industrial symbiosis. EREK provides tools, information and business opportunities demonstrating new ways to be resource efficient and benefit from circular economy business models which turn waste into assets. This is done based on the best practices illustrated by case studies. These best practices aim to improve the resource efficiency of companies, addressing both their direct operations and impacts across the whole value chain.

Financially, the European Commission’s sustainability agenda is backed up by the European Green Deal Investment Plan. As part of the wider effort by the European Innovation Council to promote disruptive innovation especially by SMEs, the Commission in 2020 allocated EUR 300 million to deliver breakthrough Green Deal innovations. The European Institute of Innovation and Technology (EIT) is transforming itself so that its Knowledge and Innovation Communities (KICs which aim to bring together businesses, research centres and universities) are more open to SMEs, thus increasing their opportunity to participate in local innovation ecosystems in particular in regions that lag behind in terms of innovation.