The EU’s rollback of its Corporate Sustainability Due Diligence Directive (CSDDD) was intended to allow SMEs to be more competitive, but it might have an opposite effect.

The European Parliament has announced changes to the CSDDD, raising the thresholds so that only companies with over 5,000 employees and €1.5bn in turnover will be directly covered.

While this means many SMEs are formally exempt, the move might mean that business retain inefficient IT infrastructure, overprovisioned cloud services, underused servers, and outdated hardware whilst quietly inflating energy use, adding to emissions and operational costs.

Inefficient digital estates can increase IT energy consumption by up to 20 per cent in a typical SME, directly affecting both carbon footprints and the bottom line. Beyond energy costs, inefficient IT also contributes to higher maintenance requirements, more frequent hardware replacement, and reduced agility in adopting modern cloud-based solutions.

Commenting on these trends, Mark Appleton, group lead vendor ecosystem development at Also Group, said: “Sustainability in IT is no longer just a corporate talking point. Even when SMEs are not legally obliged to report, the expectations of partners, customers, and investors are rising. Inefficient infrastructure is not only a climate issue, but also a financial issue. Businesses that ignore these pressures risk higher costs and reduced competitiveness.”

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