A Comparative Analysis of Green Transition Efficiency Among European SMEs

Abstract

Environmental pollution, resource scarcity, and high energy consumption accelerated in the last decade have made the green transition imperative, and consequently, the European Union (EU) has led the way in implementing green policies. According to recent surveys, SMEs in the EU have made strides toward sustainability since 2018. However, the ongoing transition of SMEs needs to be further strengthened. The European Innovation Council was committed to supporting SMEs with funding to promote Green Deal innovation. Moreover, the Green, Digital, and Competitive SME Index was established to facilitate this transition. Existing literature indicates that research on assessing green transition and variations between or within countries is still in its early stages and demands further investigation. To the authors’ knowledge, no prior study has focused on measuring the green transition efficiency of SMEs. Given the critical importance of SMEs in the adoption of a green growth model, it is crucial to assess the green transition efficiency of SMEs across and within countries. This study addressed this gap by analyzing the green transition efficiency of European SMEs through the Green Transition pillar of the Green, Digital, and Competitive SME Index. In the study, European SMEs’ green transition efficiency was analyzed using various DEA models, including CCR (Charnes, Cooper, and Rhodes), Cross-Efficiency, Aggressive, and Benevolent Models. The findings revealed that Sweden consistently emerged as the top performer, demonstrating strong overall capabilities. The Netherlands and Denmark also frequently ranked highly, indicating strong performance across various metrics. In contrast, Bulgaria, Romania, and Ireland consistently ranked lower, revealing ongoing performance issues. The study's findings indicated that the overall performance of the DEA models closely aligns with the Green Transition pillar of the Green, Digital, and Competitive SME Index.