At least one in four small and medium-sized firms have reduced their production costs through efficiency measures according to a new survey from the European Commission.
The new Eurobarometer report on green markets and resource efficiency surveyed more than 13,000 businesses across Europe, neighbouring countries and the US to investigate how SMEs are reacting to the worldwide move towards energy efficiency.
It found that cost savings are the key motivator for pursuing efficiency, with 42% having made savings as a result. In addition, 80% of the SMEs that had made investments in resource efficiency are satisfied with the return on their investment.
Among the most common methods for addressing in inefficiency was saving energy, second only to minimising waste. This is likely to increase over time, as adopting ways to save energy was the most common response by 72% of SMEs planning to take additional action to lower costs over the next two years.
Despite the significant efforts to reduce energy costs across Europe measured by the survey, it did also reveal a decrease in the proportion of firms making efforts to become more efficient. While 87% of European SMEs were taking some action to be more efficient in 2015, this was down from the 93% recorded two years before.
It was also found that overall investment was down, with almost a quarter (24%) failing to invest any of their turnover in resource efficiency since 2013; only 26% invested between 1-5%. However, almost two thirds (63%) of SMEs taking efficiency action relied on their own financial resources to do so, with only 19% turning to external support, suggesting firms could be hesitant to seek outside funding.
This could explain why a quarter of businesses reported that they are not planning to implement any resource efficiency actions in the next two years, an increase of 8% compared to 2013.
As well as funding issues, the survey also found that complex administrative or legal procedures (29%) and the cost of environmental actions (23%) were considered to be the major stumbling blocks for SMEs seeking to carry out efficiency works.
The UK picture
Many of report’s findings tally with those of a similar study published by the Federation of Small Businesses (FSB) in May 2015 for UK SMEs. Like those planning to adopt cost-cutting measures in Europe and beyond, the majority of FSB members (78%) said lowering energy costs was the main motivation for carrying out efficiency work.
A significantly lower proportion of small businesses were making changes, with just 53% improving the energy efficiency of their operations. However, this could reach the levels recorded by the European Commission as 90% of the UK firms asked are seeking to be more energy efficient in their own business.
Speaking back in May to coincide with the report’s release, John Allan, National Chairman, Federation of Small Businesses, said: “Small businesses are really enthusiastic about energy efficiency and this desire should be capitalised on for the good of their business and the environment.”