At the presentation of the White Paper, a comprehensive report that provides new insights and conclusions about the efforts of as many as 1,240 small and medium-sized enterprises across Europe in their sustainable transition, questions were answered about how European SMEs approach sustainability and what obstacles they face on this path, with a particular emphasis on the advantages of adopting a sustainable approach. This research resulted from the joint efforts of Generali Group and SDA Bocconi Sustainability Lab from Milan, and the conclusions were presented by the CEO of Generali Insurance, Mario Carini, and Manlio de Silvio, professor and researcher at SDA Bocconi Business School.
– I am particularly proud of this important research conducted and the opportunity to present it to the Croatian public. The conclusions we had the opportunity to hear today can shape the future of sustainability in the SME segment. Sustainability is a fundamental component of Generali’s strategic plan ‘Lifetime Partner 24: Driving Growth’ and has a crucial impact on our decision-making processes. Our commitment lies in our efforts to continue being a responsible, Lifetime partner to our stakeholders, as an insurer, investor, employer, and corporate citizen. I am extremely pleased that this year’s edition of the SME EnterPRIZE initiative in Croatia has attracted significant interest among entrepreneurs. More than 140 companies participated in the competition, representing a 40% increase compared to the initial edition. This clearly indicates the growing number of companies that recognize the importance of sustainability and want to actively participate in the SME EnterPRIZE initiative – said Mario Carini, CEO of Generali Insurance d.d.
Manlio de Silvio, professor and researcher at SDA Bocconi Business School, stated that their research highlights that the approach of European SMEs towards sustainability has remained strong, especially considering the challenging previous years.
– In 2023, 31% of Croatian SMEs are implementing or have already implemented a sustainability strategy or action plan. However, for a sustainable transition to occur, we need to engage the remaining companies that have not yet decided or have hesitated to embrace this transition. To achieve this, we must work on the obstacles these companies still face (e.g., lack of sustainable financing, lack of a clear legislative framework, lack of public incentives, lack of economic and financial resources) and explain the benefits that SMEs adopting sustainability as one of their core principles achieve. For example, 86% of Croatian companies that have adopted a more structured approach to sustainability report positive results in terms of environmental impact, 84% have improved employee satisfaction, 76% have increased customer satisfaction and gained competitive advantages (impact on revenue), and 68% have increased their efficiency (impact on costs). To win over uncertain and hesitant SMEs, we must explain the business case for sustainability and convince them that sustainability is not just a cost but an investment with a positive return – said de Silvio.
This autumn, Generali and SDA Bocconi will publish the White Paper on which this research is based in full. More information and insights into the initiative are available at: https://www.sme-enterprize.com/, and below we present preliminary results.
Preliminary Results of the White Paper 2023.
In Croatia, in 2023, 31% of small and medium-sized enterprises (SMEs) are in the process of implementing or have already implemented a sustainability strategy or action plan, which represents a slight decrease of 1% compared to 2020. Despite this, we still record 44% of those lagging in implementation (i.e., Laggards – have not adopted an ESG strategy/action plan and have not planned implementation) and 12% undecided (i.e., Undecided, possible future implementation of ESG strategy/action plan) SMEs. Croatian SMEs often cite high energy costs and owner responsibility as key obstacles, while regulatory requirements and the pursuit of organizational and market advantages share third place. Croatian SMEs perceive obstacles to sustainable transition with greater intensity compared to their European counterparts. The main obstacles include lack of sustainable finance, lack of a clear legislative framework, lack of public incentives, and lack of economic and financial resources.
The benefits that Croatian SMEs perceive from adopting more structured approaches to sustainability are similar to those of their European counterparts, although small differences in intensity have been recorded. European SMEs strongly call for support in their transition through various institutional and market initiatives. Croatian SMEs show a similar sense of urgency as their European counterparts, although smaller differences in intensity have been recorded.
Although they feel more affected by recent global crises than other European SMEs, Croatian companies prioritize seeking national or international subsidies for financing the green transition, tax incentives for promoting sustainable products or services, favorable credit conditions, as well as education, capacity building, and knowledge transfer.
Adoption of ESG Approach into Regular Business
At the European level, since 2020, there has been an increase in the number of small and medium-sized enterprises (SMEs) that have adopted an ESG approach, while at the same time, the number of SMEs showing no interest in any ESG strategy has doubled. Nevertheless, the adoption of the ESG approach remains stable, even during the challenging period of 2022-2023. The barriers to adopting the ESG approach remain high and have increased since last year. The percentage of European SMEs perceiving significant barriers hindering their sustainable transition has increased in various domains, including lack of institutional support, lack of a clear legislative framework, and lack of economic resources. The White Paper confirms that SMEs that have adopted the ESG approach achieve benefits in all domains, showing an increase compared to already positive results from last year’s research. SMEs in the industrial and construction sectors have adopted a formalized ESG approach to a greater extent than those in the services and trade sectors.
