Only 11% European SMEs plan to reduce CO2 emissions

There is a blind spot regarding the climate actions taken by European SMEs. That's why Argos Wityu and BCG are publishing the first edition of their barometer that maps how European SMEs are reducing their carbon emissions, with the key finding that only just over 1 in 10 have a climate plan.

According to the European Commission, CO2 emissions from SMEs could account for up to two-thirds of total European emissions, but right now the engine of the European economy is far from ready to meet European agreements meant to reduce emissions. As of Jan. 1, 2026, the already adopted European Directive on Corporate Sustainability Reporting (CSRD) requires companies with more than 250 employees and a turnover of €40 million to disclose their climate impact over a calendar year, including scope 3 emissions.

This article previously appeared on www.duurzaam-ondernemen.nl | image: stock photo.

Have SMBs really understood the profound changes required? Are they actively reducing their climate impact? What obstacles do they have to overcome and what opportunities do carbon reduction present? To address these crucial questions, Argos Wityu and BCG publish the first edition of a barometer that critically examines the climate actions of European SMEs.

Urgency followed by sense of opportunity

Strikingly, 84% of SMEs surveyed consider the reduction of greenhouse gas emissions to be "important" or "critical," highlighting the urgency of the issues. Of this group, 71% view the need for "decarbonization" as an opportunity and expect benefits such as improved profitability and access to new markets, providing immediate or long-term competitive advantage. "There is no doubt that carbon reduction can generate strong opportunities for mid-sized companies across all sectors. Many investors, from asset managers to large institutions, are willing to support these companies in their transition from gray to green and help them become leaders in sustainability," said Simon Guichard, partner at Argos Wityu.

Approach unstructured and opportunistic

While 38% of SMEs surveyed say they have already invested heavily in CO2 reduction, only 11% say they have a structured approach to measuring their emissions, a plan of attack to reduce emissions and making (large) investments. "Mid-sized companies are in the early stages of their route to a more sustainable future but their investments are still primarily driven by regulations, energy prices and customer promise. The road to a more structured and comprehensive approach still lies ahead. It is therefore absolutely essential to support SMEs if we want to achieve the climate goals," said Fabien Hassan, Principal at BCG.

Contrasts in sector

Based on ownership type, some interesting dynamics stand out. 62% of publicly traded companies report having made "strong investments" in their efforts to reduce carbon emissions, in contrast to only 35% of private companies. Significant differences also emerge by sector, with 51% of companies in the transportation and logistics sector indicating they have made significant investments, as opposed to only 24% of companies in high-temperature sectors (e.g., those working with metals, glass and ceramics).

Optimism despite challenges

Despite the challenges, the European SMEs surveyed remain optimistic. 70% believe in the feasibility of the 2030 targets. However, they do say they seek support to meet the challenges they face, namely lack of financial resources, complex regulations and lack of expertise.

"Unlike larger companies, medium-sized companies rarely have sufficient scale to insource the necessary talent, develop internal expertise and structure plans to reduce emissions. We therefore need to help them turn the optimism present into structured investments. The involvement of all stakeholders - regulators, investors, government agencies and business partners - is crucial," said Benjamin Entraygues, Managing Director and Senior Partner at BCG.

"Mid-sized companies need strong support, specialized experts and funding to bring their climate action to its intended outcome. Those companies that effectively deploy changes to achieve emissions reductions in the short term will benefit from a long-term competitive advantage," states Louis Godron, Managing Partner at Argos Wityu.

The survey was conducted among 700 companies operating in the Benelux, France, Germany and Italy regions in July 2023 and highlights the crucial role SMEs play in addressing climate change. Argos Wityu and BCG intend to continue monitoring these trends and supporting SMEs on their path to a more sustainable future.