C L O U D
S O L U T I O N S
C L O U D
S O L U T I O N S
SAGE REPORT REVEALS US $ 789 BILLION GREEN FINANCE OPPORTUNITY FOR SMES
Sage , a leader in accounting , financial , HR and payroll technology for small- and medium-sized businesses ( SMBs ), has launched ‘ Unlocking Sustainable Finance for SMEs ’ – a global report which exposes a gap between SMEs ’ sustainability ambition and their ability to take action , preventing them from accessing vital green finance needed to drive their initiatives .
Created in partnership with the International Chamber of Commerce ( ICC ), the report highlights that while 86 % of SMEs say that sustainability is important to their business , only 9.1 % formally report on their impact , citing complex reporting requirements as a major roadblock ( 74 %).
The data revealed a ‘ virtuous circle ’ between sustainability reporting , green finance and climate action – SMEs that report on their impact are then more likely to secure funding to become more sustainable , which in turn , helps them take further steps towards net zero . This would also help financial institutions who say data challenges are a huge barrier to offering green loans ( 84 %). Currently , however , only 1.2 % of SMEs are leveraging this virtuous circle to grow sustainably .
Sage and ICC launched this report at COP29 in Baku , urging global decision-makers to bridge the gap between SMEs ’ growing sustainability ambitions and their ability to act , by calling for simplified reporting standards and access to green finance . To fully unlock the potential of SMEs in combating climate change , Sage calls on governments , financial institutions and technology partners to :
• Simplify sustainability reporting – Implement proportionate and streamlined reporting standards tailored to SMEs , making it easier for them to access green finance
• Expand access to digital tools – Equip SMEs with affordable , automated tools to track emissions and streamline reporting
• Increase financial incentives – Offer tax credits , grants and favourable loan terms to motivate SMEs to measure their environmental impacts and invest in sustainable practices
The report also found :
• Interest and engagement with climate change is fast rising – 86 % of SMEs state that sustainability is crucial to their business , up from 83 % last year , and 72 % believe they can contribute to tackling climate change . However , only 63 % are currently taking steps to reduce their environmental impact .
• Action is growing but at a much slower pace – 68 % of SMEs say the cost of implementing sustainability initiatives is too high , and 67 % cite time constraints . These barriers are growing rather than decreasing , slowing down climate action
• Finance is key to unlocking more action – 89 % of SMEs that secured green finance say it was crucial to their sustainability efforts , but only 19 % have considered external financing for environmental initiatives
• SMEs are looking to technology to help bridge the gap between intention and action – 73 % of SMEs are concerned about the upfront costs of sustainability reporting , and 66 % are worried about its complexity . However , 65 % believe digital tools could help simplify the process and unlock the benefits of green finance . �
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