Schneider Electric and the Solar Impulse Foundation have published a report warning that Europe’s small and medium-sized enterprises are failing to capture significant gains available from greater electrification and digitalisation, despite mounting pressure to cut costs and strengthen competitiveness.
The study, Unlocking SME Competitiveness in Europe, finds that only 11% of SMEs have made meaningful sustainability investments, even though deploying existing technologies could reduce energy use by 20–30% and cut CO2 emissions by as much as 40% in key sectors by 2030. The authors argue that these improvements could unlock billions in unrealised value across the continent.
Although 93% of SMEs have introduced at least one measure to improve resource efficiency, the report notes that only a quarter have adopted a comprehensive strategy to reduce carbon emissions. The findings arrive as the EU seeks to raise its electrification rate from 21.3% today to 32% by the end of the decade, a target complicated by the ageing state of Europe’s electricity infrastructure, 40% of which is more than four decades old. The report estimates that €584bn of investment will be needed by 2030 to modernise the grid.
Laurent Bataille, Executive Vice President of Europe Operations at Schneider Electric, said Europe’s industrial base was at a turning point. Electrification and digitalisation, he argued, were no longer aspirational but essential. Faster adoption, he added, would bolster Europe’s industrial sovereignty, reduce dependence on imported energy and provide greater protection against external shocks.
Bertrand Piccard, Founder and Chairman of the Solar Impulse Foundation, described efficiency as Europe’s “hidden superpower”, asserting that more intelligent use of energy and resources would strengthen profitability and resilience. Gilles Vermot Desroches, Chief Corporate Citizenship Officer at the Schneider Electric Foundation, said equipping organisations and young people with the tools to support a low-carbon transition would help ensure that the benefits of the shift were widely shared.
The report calls for a series of policy interventions to accelerate SME adoption of electrification and digital technologies. These include revising the EU’s energy taxation directive to improve the competitiveness of electricity, simplifying permitting and grid-connection procedures, deploying public funds to de-risk major capital projects and supporting business models such as Energy-as-a-Service.
Europe’s 23 million SMEs represent 99% of businesses and more than half of EU GDP, making their participation critical to the bloc’s climate and industrial goals. The authors say the rapid growth of renewable energy, which accounted for more than 30% of Europe’s electricity generation in 2023, underscores the importance of reducing exposure to volatile fossil fuel markets.
