How do SMEs in the construction sector in the German-speaking region of Belgium adapt their business models to meet EU Green Deal ambitions ?

Abstract

The European Green Deal is an ambitious program to ensure future economic growth and development within our planetary boundaries. The goal is to transform Europe into the first climate neutral continent by 2050. To achieve this ambitious target, it is crucial for companies to lead the way in adopting sustainable practices and innovations that align with the Green Deal´s objectives. However, the new regulations are often quite complex and represent huge challenges for companies, especially SMEs. This thesis aims to get an insight into how SMEs in the construction sector are adapting their business model today to prepare for the future. The thesis is geographically limited to the German-speaking region of Belgium, where the construction sector plays a crucial role in the economy. Several interviews were conducted with leading managers of construction companies and material providers in the region. The purpose of these interviews was to understand the current issues and challenges of the sector in light of the transition to a more sustainable business model. Furthermore, the goal was to assess the steps that have already been taken to improve their sustainability performance and the financial implications of the transition for SMEs. Generally, the interviews have revealed that there remains significant potential for companies to improve. Companies, especially those active in the traditional construction sector, are currently struggling with huge cost increases and labor shortages. In most cases, price differences between traditional and sustainable materials are still too important to make them a serious alternative. Crucial topics in the industry today are recycling and digitalization. Companies have understood the potential economic benefits of an increased reuse and recycling of raw materials. However, SMEs still often lack knowledge and skills to take it one step further and to change their business model profoundly. A surprising finding was that the majority of companies is not producing green energy, which is often due to administrative and cost burdens.