Policy Brief: Green Transformation Guide for SMEs
Where to Begin?
Why Is Green Transition Urgent for SMEs?
Global climate goals, the EU Green Deal, and new sustainable finance standards have made “green transition” a top priority — not only for large industrial players, but also for small and medium-sized enterprises (SMEs).
While exporting firms face mounting demands to disclose their carbon footprint, comply with ESG reporting, and align with supply chain expectations, domestically operating SMEs are also beginning to feel the impact of this shift in terms of access to finance, public procurement, and customer preferences.
This policy brief outlines how SMEs can get started without being overwhelmed by complex regulations or resource constraints — and how to focus on actions with the highest short-term impact.
1. First Step: Conduct a Resource and Energy Inventory
Green transition starts with measurement. Instead of jumping into complex carbon accounting, SMEs can begin with simple but meaningful inventories in the following areas:
- A 12-month review of electricity, natural gas, and fuel bills
- Types and quantities of waste generated
- Water usage — especially in production processes
- Origin and transport mode of raw materials
💡 Tip: This data is valuable not only for environmental assessments, but also for cost control and operational efficiency.
2. Quick Wins: Low-Cost, High-Impact Actions
Green transition doesn’t have to be expensive. Here are some affordable, immediate steps that SMEs can take to cut costs and emissions:
- Lighting upgrade: Switching to LED systems
- Compressor maintenance: Up to 15% energy savings
- Water reuse systems: Particularly valuable in sectors like textiles and food
- Waste segregation: Reduces both environmental impact and disposal costs
3. Funding and Incentives: Where to Look
Many SMEs struggle to finance the transition — yet various funding sources are available:
- KOSGEB Green Transition Grants: Support for energy efficiency and carbon reduction
- TÜBİTAK Programs (1501 & 1507): R&D projects with environmental technologies
- EU Grants (IPA, Horizon Europe): Collaborative project opportunities
- Banking Sector: Favorable loans for high-ESG-score projects
🔍 Note: Over 60% of SMEs miss out on these opportunities not due to lack of funding, but due to lack of information.
4. Sector-Specific Starting Points
The path to green transition varies by sector. Here are sample entry points for three key industries:
Textiles- Reduce chemicals in dyeing and finishing
- Invest in water recycling systems
- Require environmental certifications from suppliers
- Optimize energy use in cooling systems
- Recover and repurpose food waste
- Adopt composting systems
- Schedule high-energy machinery use more efficiently
- Prioritize recycled-content raw materials
- Integrate environmental and occupational safety management systems
5. Roadmap: A 6-Month Action Plan
The roadmap below shows how an SME can begin its green transformation within just six months:
| Month | Objective |
|---|---|
| 1–2 | Baseline analysis: Gather energy, water, and waste data |
| 3 | Implement quick savings actions (LEDs, maintenance, waste sorting) |
| 4 | Begin funding search and prepare applications |
| 5 | Deploy at least one digital tool or monitoring system |
| 6 | Prepare a basic carbon footprint or mini ESG report |
Conclusion
Green transition may seem like a daunting challenge for SMEs — but with the right steps, it becomes a strategic advantage. Energy savings, access to external finance, supply chain alignment, and customer trust are just a few of the concrete benefits that prove sustainability also adds business value.
At S4A, we support SMEs through tailored guides, tools, and consulting services to help you navigate your green transformation journey.