Accelerating the Green Transition: An Experimental Study with Portuguese Small Businesses

Enrolled firms will be randomly assigned to one of four groups: the control group or one of the three treatment groups - information provision via video, class training, or consulting. The information treatment involves disseminating general knowledge about the green transition and energy optimization via a video. The class training program is more intensive and entails face-to-face sessions, providing SME managers with comprehensive training on energy-efficient measures. This training program also allows managers to interact with one another, exchange ideas, and seek clarification. The training will consist of a one-day training session. The consulting treatment offers firms an energy audit - individualized analysis and tailored advice on green transition strategies from a specialized firm (EDP).

Upon completion of the above treatments, a subset of 50% of all firms within each treatment group will be selected randomly to receive an introduction to Banco BPI in case they are interested in a dedicated green credit line. The credit line will provide the firms with the necessary funding to finance their planned green transition investments. The primary objective of this approach is to alleviate the common financial barriers that SMEs typically encounter when transitioning to more energy-efficient practices. Banco BPI will make the credit line available, but firms can opt out and choose another bank.

2024-04-15

2026-04-15

The primary outcomes of interest are changes in energy usage and cost at the establishment level, as measured by the electricity distribution grid operator (e-redes), as well as through the baseline and follow-up surveys, which will cover other sources of energy such as gas, coal, fuel oil, etc. Energy usage will be quantified in kWh and kWh per unit produced, while energy costs will be assessed in euros. The study also seeks to investigate the extent of pollution and carbon emissions (tons of CO2 equivalent emissions) generated by the participating SMEs. We will also supplement our data with Sabi INFORMA, which includes both financial information and energy usage data.

The primary outcomes of interest are changes in energy usage and cost at the establishment level, as measured by the electricity distribution grid operator (e-redes), Sabi INFORMA, as well as through the baseline and follow-up surveys, which will cover other sources of energy such as gas, coal, fuel oil, etc. Energy usage will be quantified in kWh and kWh per unit produced, while energy costs will be assessed in euros. The study also seeks to investigate the extent of pollution and carbon emissions (tons of CO2 equivalent emissions) generated by the participating SMEs.

Secondary outcomes will include changes in participants’ knowledge of climate change and their intentions to adopt energy-efficient practices. These will be measured using pre- and post-intervention surveys.

After firms have completed the baseline survey, we will randomly assign them to either the control group or one of the three energy-efficient treatment groups. To ensure balanced representation, we will stratify our sample based on firm size (using the number of employees as a proxy) by dividing firms into three terciles. Additionally, we will categorize the sample by sector (service and non-service) and region in Portugal, grouping locations into Lisbon, the North, and Center-South.

We plan to conduct at least two waves of the experiment, targeting a total of 1,200 firms, with 600 firms in the control group and 600 in the treatment groups (200 for each of the video, class training, and consulting treatments). Following the energy-efficiency treatments, firms will be further divided into credit and non-credit groups, with 600 firms in each group.

The first wave will consist of 600 companies, divided into four groups of approximately 150 companies each. Firms with fewer than two employees, those located in the islands of Portugal, and financial firms will be excluded from the study. The second wave will aim to include at least 600 companies. If there is a high attrition rate during the first wave, we may expand the recruitment efforts to ensure the desired sample size is achieved.

Treated firms will be contacted and requested to pay (€20 for information, €50 for training, and €150 for consultancy) as a commitment device to discourage drop-outs and ensure continued participation in the experiment.

Once the energy-efficiency treatments have been completed, we will randomly allocate the credit treatment to 225 firms (75 approximately from each energy-efficient treatment group) and 75 firms from the control group; there will be 300 firms without credit allocated.

Power calculations indicate that with a sample size of 600 firms, the minimum detectable effect (MDE) for the energy efficient treatment lies between 8.4 and 10.6 percent, and for the credit treatment between 12 and 15 percent with respect to the average energy consumption. For the credit treatment, 300 firms will be assigned to the control group and 300 will receive the treatment. The power calculation for this scenario shows that the MDE for the energy efficient treatment remains the same, while for the credit treatment, the MDE ranges from 12 to 15 percent.
The control group will not receive any treatment. Participants assigned to this group will be duly informed of their enrolment in the study. They will be requested to complete baseline and the post-intervention (follow-up) surveys.

As mentioned above, each enrolled firm will be randomly assigned into one of four groups, the control group, or one of three energy-efficient treatment groups: information provision, class training, or consulting:

Information treatment: The information treatment is the most light touch. It consists of short videos in which companies receive general information about the green transition and how SMEs can optimize their energy consumption. The video content will be created by our partnered consulting firm and delivered by the Executive team at Nova SBE through the Moodle platform. Treated firms will have 1.5 month to watch the video. At the end of the information treatment, there will be a survey to check knowledge acquisition, including questions about intent to change.

Class training: The class training is more intensive and consists of face-to-face session of one day, conducted by our partner consulting firm, in which SME managers are taught about energy-efficient measures. The managers will also have the opportunity to ask questions and exchange information. The training will include real-world case studies to provide a practical understanding of how these measures can be implemented. At the end of the information treatment, there will be a survey to check knowledge acquisition, including questions about intent to change.

Consulting treatment: The consulting treatment consists of individual firms receiving detailed and customized green consulting analysis and advice from our partnered energy firm. At the end of the consulting treatment, there will be a survey to check knowledge acquisition and level of satisfaction, including questions about intent to change.

After the energy-efficient treatment, a fraction of firms in each treatment group will be randomly selected into the credit treatment group. This credit treatment allows firms to access a special line of credit for sustainability investments from Banco BPI. Firms are not obliged to obtain this credit from BPI and may seek better offers from other banks if available. Firms can apply for this line of credit up to after the end of the energy efficiency treatment; we will send reminders. There will be a survey after the credit treatment including questions about intent to change.

Not available

PC in office.

Non-financial firms located in mainland Portugal with between 2 and 250 employees.

No

First and second wave expect a total sample of 1,200 firms, with 300 firms for each group.

1,200

Out of a total sample of approximately 1,200 firms, 300 will be assigned to the control group and the remaining 900 will receive energy-efficiency treatments, with 300 firms receiving information, 300 firms receiving training, and 300 firms receiving consulting. Once the energy-efficiency treatments have been completed, we will randomly allocate the credit treatment to 450 firms (150 from each energy-efficient treatment group) and 150 firms from the energy-efficiency control group; there will be 600 firms without credit treatment.

The experiment will be conducted in two waves. The first wave, starting in November 2024, will consist of 600 firms, while the second wave, starting in May 2025, will include the remaining 600 firms. If there is a high attrition rate during the first wave, we may expand recruitment efforts to ensure the desired sample size is achieved.

Power calculations indicate that with a sample size of 600 firms, the minimum detectable effect (MDE) for the energy efficient treatment lies between 8.4 and 10.6 percent, and for the credit treatment between 12 and 15 percent with respect to the average energy consumption. For the credit treatment, 300 firms will be assigned to the control group and 300 will receive the treatment. The power calculation for this scenario shows that the MDE for the energy efficient treatment remains the same, while for the credit treatment, the MDE ranges from 12 to 15 percent.