Why Should Small and Medium-Sized Enterprises (SMEs) Conduct a Carbon Footprint Assessment®?
In a global context marked by the climate and ecological crisis, governments and businesses must adapt to ensure the sustainability of their services and the survival of their institutions. International agreements, goals, and regulations—both national and international—are increasing every year.
For example, France has committed to achieving carbon neutrality by 2050 as part of its ecological and energy transition to combat climate change. By 2050, all greenhouse gas (GHG) emissions must be offset by carbon sequestration through natural sinks (oceans, the atmosphere, and forests). Reducing greenhouse gas emissions (and thus one’s carbon footprint)—whether as an individual, a government, or a business—is essential to achieving this goal. Small and medium-sized enterprises (SMEs) are included in this effort.
SMEs are companies with no more than 250 employees and annual revenue not exceeding 50 million euros, or with total assets not exceeding 43 million euros. Together with mid-sized companies (ETIs), they account for 30% of France’s carbon footprint.
In this article, we’ll discuss why small and medium-sized businesses should seriously consider the importance of conducting a carbon assessment.
1. What is a Carbon Footprint®?
2. Why should an SME conduct a BEGES?
2.1. Anticipating Regulations.
☁️What is a Carbon Footprint®?
Let’s start by defining the carbon footprint®, or greenhouse gas emissions inventory (GHG). It is a systematic assessment of the greenhouse gas emissions generated by a company’s activities, such as the production of its products. Several methods exist for calculating this footprint: the GHG Protocol, the ISO 14061 standard, the regulatory method (so-called “regulatory” because it is used as part of the mandatory reporting required of certain entities under the Grenelle II Act), and the Bilan Carbone® method supported by ADEME.
The GHG Protocol is the first methodology to define the three scopes, which will be incorporated into other methodologies but in the form of categories (based on the ISO 14061 standard).
– Scope 1 refers to a company’s direct emissions.
– Scope 2 refers to a company’s indirect emissions that it can control (such as energy purchases and consumption).
– Scope 3 refers to indirect emissions that a company cannot control.
As part of a CSR strategy, conducting an assessment of a company’s greenhouse gas emissions is an excellent way to quantify its carbon footprint and implement an effective plan to reduce emissions.
❓Why should an SME complete a BEGES?
Let's now explore the benefits of carrying out the BEGES for SMEs.
📜Stay Ahead of Regulations.
Companies with more than 500 employees, as well as local governments with more than 50,000 residents, pursuant to the Grenelle II Act (2010). This requirement is governed by Article L. 229-25 of the Environmental Code. The assessment must be conducted every four years, published on the ADEME website, and accompanied by a transition plan.
Calculating Scope 3 emissions has been mandatory since the BEGES Decree of July 2022.
GHG inventories are not currently mandatory for SMEs in France, but regulations are changing rapidly in favor of conducting comprehensive and compliant GHG inventories. It would be beneficial for SMEs to take the initiative and conduct a GHG inventory before it becomes mandatory.
In fact, the CSRD has been in effect in France since January 2024. It is a new European directive that establishes new non-financial reporting standards for European companies. In 2026, it will apply to publicly traded SMEs, which will then be legally required to provide more ESG (environmental, social, and governance) information in their annual reports. GHG emissions reporting is part of this.
💰Grants may be available
To help small and medium-sized enterprises (SMEs) conduct their GHG emissions assessments—and to encourage them to do so—the French government has established two main subsidy programs for carbon assessments aimed at SMEs.
The Diag’Décarbon’Action program, launched by BPI France in partnership with ADEME and the Bilan Carbone® association, offers a grant ranging from 40 to 60 percent of the total cost of the assessment provided by the program (€10,000), depending on the number of employees at the company.
The “Tremplin” public aid program for the ecological transition, established by ADEME, provides a grant covering 80% of the total cost of conducting the assessment, up to a maximum of €5,000.
We invite you toread this article formore details.
🌍Combating Climate Change
Anthropogenic greenhouse gas emissions are the cause of the climate change we are experiencing today. These gases trap the infrared radiation emitted by the sun in the atmosphere, causing, among other consequences, a rise in average temperatures. These GHG emissions have a significant impact not only on our climate but also on our entire ecosystem.
Quantifying emissions and identifying key emission sources through a comprehensive and compliant GHG inventory is the best way to implement an effective decarbonization strategy, contribute to the collective effort toward ecological and energy transition, and reduce one’s impact on the climate—regardless of industry (,services, events, transportation, etc.) or business size. In 2023, 67% of SME and mid-market company executives say they follow climate-related news within their organizations.
Reduce Costs (Energy Bills)
Conducting a GHG inventory also helps identify potential energy savings, thereby reducing costs. For example, Scope 2 emissions are related to the purchase and consumption of energy supplied by vendors and necessary for the company’s operations. Reducing this consumption by improving the energy efficiency of its facilities, equipment, tools, and production processes can be an excellent way to lower GHG emissions while also reducing energy bills!
🔆Brand Image
Adopting an eco-responsible approach by committing to a CSR program, or by carrying out a carbon audit, strengthens the brand image of SMEs. Consumers are increasingly sensitive to environmental issues, and give preference to companies committed to sustainable practices and a CSR strategy. A positive carbon footprint®, accompanied by actions and a plan to reduce emissions, thus becomes a differentiating factor in an increasingly competitive market.
💸SRI Fund Assets
Investors now demand a great deal of non-financial information about the companies—including SMEs—in which they are considering investing. This allows them to assess the risk of their investment, but also to gauge the responsible nature of their investment. To ensure they don’t miss out on capital from SRI (socially responsible investment) funds, SMEs would be well advised to provide non-financial information about their environmental commitment and initiatives; a greenhouse gas (GHG) emissions report—accompanied by specific actions and a decarbonization plan—is an excellent way to do so.
Convinced? All you have to do is calculate your own GHG footprint and join the fight against climate change!
To learn more, find out why organizations should conduct a carbon footprint assessment, about CO2 emissions in the manufacturing sector, carbon footprint assessments for public-sector entities, the economic and financial impacts of carbon debt, and the role of suppliers in reducing CO2 emissions.