Skilled crafts and trades: Pacesetter for energy efficiency among SMEs

• High share of energy costs in skilled crafts and trades lead to above-average efforts
• Nearly half the skilled crafts enterprises implemented or planned energy efficiency measures between 2011 and 2013
• KfW and ZDH urge them to better use savings potential

Skilled crafts enterprises attach more importance to saving energy costs than other SMEs. Additionally, they put more efforts into improving energy efficiency in their companies. Compared to the SME sector overall, the German skilled crafts and trades thus make above-average efforts in exploiting energy efficiency potential. However, even here there remains a lot to be done. A joint analysis by KfW and the German Confederation of Skilled Crafts (ZDH) based on the KfW SME Panel shows that many companies underestimate the long-term savings potential of energy efficiency measures to date.

61% of skilled crafts enterprises regard the saving of energy costs as an important issue (total SME sector: 45%). The number of companies that actually take action is correspondingly high: 48%, i.e. nearly half of all skilled crafts enterprises have either implemented or planned measures to save energy costs between 2011 and 2013 (total SME sector: 43%).

The most important incentive for skilled crafts enterprises to improve energy efficiency is the relatively high share of energy costs in their total operating costs. 49% of skilled craftsmen (total SME sector: 43%) have energy cost shares amounting to 5% or more. This applies primarily to the 53% of companies outside the construction sector, such as textile cleaning, galvanisation and food production.

Especially in smaller skilled crafts enterprises, the higher cost pressure often triggers investments in energy efficiency. This helps to ensure profitability despite constant cost increases. Small skilled crafts enterprises are particularly active when it comes to investing into better energy efficiency of operational facilities and energy-efficient production equipment (38% each).

Another reason for the strong relevance of energy efficiency in the skilled crafts and trades sector is that a large share of companies is involved in the fields of energy efficiency and renewable energies. The issues of sustainability, conservation of resources and climate protection are part of their business model. However, in total only 18% of skilled crafts enterprises offer energy-efficient products and services on the market, in contrast to 30% of SMEs overall. Dr Alexander Barthel, Chief Economist at ZDH explains: "The skilled crafts associations support the enterprises in seeing the energy turnaround as more of an opportunity to scan the market and expand their business involvement in these fields. Under the "Mittelstandsinitiative Energiewende und Klimaschutz" policy (SME initiative for energy transition and climate protection), seven environmental centres of the skilled crafts and trades are currently working on innovative approaches for successfully implementing efficiency measures in smaller skilled crafts enterprises."

Dr Jörg Zeuner, Chief Economist at KfW, says: "Although the efforts to improve energy efficiency are high in comparison with the total SME sector, many skilled crafts enterprises could still do more in this regard. Half the enterprises, i.e. about 500,000 companies, for instance, have so far neither implemented measures nor been able to identify savings potential in their own operations. More craftsmen should make use of the possibilities to save energy. Often this refers to the smaller enterprises."

Note: The analysis "Das Handwerk in Deutschland – meisterlich bei Energieeffizienz?" is available for download under the following link: www.kfw.de/Studien.