A recent assessment highlights a significant challenge facing small and medium-sized enterprises (SMEs) in Europe: inefficient IT infrastructure. While the European Union’s decision to roll back the Corporate Sustainability Due Diligence Directive (CSDDD) may seem beneficial for these businesses, it could inadvertently lead them into a trap that undermines their competitiveness.

Experts warn that inefficiencies in IT, such as overprovisioned cloud services and idle servers, could increase energy consumption by as much as 20%. This rise in energy use not only impacts operational costs but also threatens to erode profit margins and hinder the agility of SMEs in a rapidly evolving market.

Mark Appleton, Group Lead for Vendor Ecosystem Development at ALSO Group, emphasizes the urgency for businesses to take proactive measures. He argues that waiting for regulatory changes or market pressures to drive sustainability initiatives is not a viable strategy. Instead, he advocates for immediate action to optimize IT resources, which can lead to cost savings and a reduced carbon footprint.

The implications of inefficient IT are particularly concerning as the global market increasingly prioritizes sustainability. Companies that fail to adapt may find themselves at a disadvantage, unable to meet the expectations of consumers and stakeholders who are increasingly focused on environmental responsibility.

As SMEs navigate these challenges, the need for strategic investment in efficient IT solutions becomes clear. By addressing inefficiencies now, businesses can position themselves not only to survive but to thrive in a future where sustainability is paramount.