Turkish SMEs see green transition as 'opportunity' but need consulting: Report

ANKARA

A survey of small- and medium-sized enterprises (SMEs) in Türkiye found that most consider the green deal an opportunity, while some fear it instead might be a risk, showing a lack of awareness, according to a report released Thursday at a Green Transition summit in the capital Ankara.

Türkiye ratified the Paris Agreement in October 2021 and has announced its ambition to achieve net zero greenhouse gas emissions by 2053.

The country has been updating its nationally determined contributions under the 2016 agreement and will announce its long-term climate strategy and action plan at the end of this year.

So in the months and years to come, it is seen as vital for SMEs to plan their production structures, business models, and financial plans in order to maintain their level of competitiveness.

The Turkish Enterprise and Business Confederation and the German think tank Konrad-Adenauer-Stiftung, with the support of Turkish private lender Akbank, implemented a project aimed at raising awareness of the green transition process at the regional level in seven provinces, and shared its findings at the summit.

Lack of awareness

Under the project, nearly 350 firms took the survey. Over half of them operate in the industrial sector, a third in the service sector, and 4.6% in the agricultural sector.

The factors SMEs see as risks in the report include lack of knowledge and awareness, insufficient human capital, loss of competitiveness, financing, and problems in the institutional structure regarding incentives and supports.

Nearly 40% of companies said they need consulting and advice on financing opportunities for this process.

While 65% of the firms said they considered the green deal an opportunity, 21% said they were unsure whether it is a risk or an opportunity.

"8% of the companies considered the deal a risk," the report said.

Over three-fourths of the companies said they had not measured their carbon footprint. About half of the 63 companies that had measured it are large companies with 250 or more employees.

Firms were also asked how much on average they have invested in the past two years in the efficient use of resources.

While 19% of the firms said they had made no investments, nearly half of the 14 companies that had invested said this sum was less than 5% of their turnover, the report said.

'Green transformation as important as the Industrial Revolution'

Speaking at the summit, Turkish Enterprise and Business Confederation Chair Suleyman Sonmez said: "It is not possible to achieve green transformation without the transformation of SMEs."

"Green transformation as an issue is as important as the Industrial Revolution. We missed the former, but we have a lot of hands for green transformation," he said.

Citing the country's medium-term economic program, Sonmez pointed to the large role of energy imports in the foreign trade deficit target.

"Almost all of the foreign trade deficit target in the program comes from energy imports. It is expected that the foreign trade deficit at the end of 2022 will be $105 billion, and energy imports will account for $103.5 billion and 98.6% of this deficit."

"If energy is used effectively together with water and resource efficiency, that is, green transformation is integrated into the entire production process, we can save approximately $17 to $20 billion per year," he underlined.

Walter Glos, the representative of the Konrad-Adenauer-Stiftung think tank in Türkiye, said green transformation should not be seen just as a burden for Turkish companies, but also as a great opportunity for them to boost their competitiveness in the European market.

"Also, from a political point of view, adhering to the European Green Deal and creating synergies with the EU will make a significant contribution to the country's integration process," he said.

"Coordinated and intensive cooperation between the EU and Türkiye in the field of green transformation, when evaluated in terms of close economic dependencies, creates an area that all parties can benefit from," he underlined.