A new report highlights a $789 billion (£625bn) opportunity for small and medium-sized enterprises (SMEs) to access green finance.
The report, created by Sage with the International Chamber of Commerce, reveals that while 86% of SMEs consider sustainability important, only 9.1% formally report on their environmental impact.
Complex reporting requirements and data challenges are key barriers preventing SMEs from securing vital green finance, with only 2.8% having applied for it in the past three years.
The report calls for simplified sustainability reporting, more accessible digital tools, and greater financial incentives to help SMEs take action on climate change.
Sage emphasises that SMEs, which make up over 90% of global businesses, are essential to achieving net zero targets.
However, financial institutions also struggle with insufficient data to offer green loans.
The report suggests that creating a “virtuous circle” of sustainability reporting and green finance will enable SMEs to become more sustainable and help accelerate climate action.
At COP29 in Baku, Sage and ICC urged global decision-makers to streamline reporting standards and improve access to green finance to unlock the full potential of SMEs in tackling climate change.
The report also shows that while interest in sustainability is rising, action is slower due to high implementation costs and time constraints.
