SMES AND THE GREEN ECONOMY

Recently, the European Commission published the results of a detailed survey that examined the view of small to medium-sized enterprises (SMEs) towards key environmental issues.

Whilst there have been indications that some politicians are losing interest in green issues, the same cannot be said about the SME sector. In fact, the good news from the survey is that, across Europe, SMEs added more green jobs, improved their resource efficiency and are making a greater contribution to a low carbon economy.

For example, 42 per cent of European SMEs now have at least one green job i.e. have an employee who produces goods or services that benefit or optimise the use of natural resources or whose job uses processes which are more environmentally friendly or use fewer natural resources.
This equates to more than 20 million green jobs across Europe, with more than half of these, not surprisingly, based in SMEs offering environmentally friendly products and services.

In addition, three million green jobs are concentrated in SMEs active in eco-industries (air pollution control, renewable energies, energy efficiency, waste management, recycled materials, environment-friendly services).

It is worth noting that the growth in green employment across Europe is not because of a growth in green products and services but because the rising costs of energy and materials is forcing business to become more resource efficient.

In fact, the most important factor for SMEs in becoming involved in the green economy is becoming more resource-efficient is important.  Indeed, 93 per cent of SMEs are taking at least one action to be more resource efficient with the most common actions being minimising waste, saving energy and saving materials.

Moreover, eight out of ten SMEs are planning additional resource efficiency actions in the next two years, particularly by saving energy and minimising waste.

This is not only driven by environmental issues but competitive factors with two thirds becoming more resource efficient in order to reduce costs, whilst others cited business opportunity or demand from customers as a key factor.

Despite this, SMEs are not taking advantage of the potential that exists for green products and services.

Whilst a significant proportion of these firms are becoming more resource efficient, only a quarter of those questioned are offering green products and services.

This suggests that there remain many opportunities for SMEs that, as yet, they are not exploiting properly.
This is especially the case in export markets, with the research showing that green markets are predominantly domestic for most SMEs, with nine out of ten selling green products or services in their own country.

So what can be done to support a greener SME sector?

According to the survey, greater policy support could help SMEs to become more efficient and, more importantly, to introduce green goods and services.

For example, nearly half said that they would like to see financial incentives to help them develop and launch new products and services for the green market.

In addition, a third of those questioned suggested that grants and subsidies would help make their company more efficient whilst a quarter would like consultancy advice on green issues.

Therefore, whilst there may be increasing pressure on MPs and AMs to taking the easy option regarding the green economy, it is worth noting that the World Economic Forum has suggested that £500 billion of investment is needed every year for clean energy infrastructure, low-carbon transport, and energy efficiency.

This presents a massive opportunity for those SMEs that can develop the right products and services to supply this market and create thousands of well-paid jobs in the economy. Given this, one can only hope that those businesses in Wales that wish to take advantage of this growing market are given the full support to do so.

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