Newcastle, 15 November 2024 – Sage, the leader in accounting, financial, HR, and payroll technology for small and medium-sized businesses (SMBs), has today 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 are launching 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:
The report also found:
Surinder Sond, Executive Vice President of Sustainability & Society at Sage said: “There’s no path to net-zero without SMEs, which make up over 90% of the world’s businesses. For years, we’ve been championing the tools SMEs need to embrace sustainability. This report’s ‘virtuous circle’ offers a powerful way forward to build prosperous businesses and sustainable communities—through simplified reporting and accessible finance enabling climate action.”
John W.H. Denton AO, Secretary General at ICC said: “We believe that SMEs are a crucial, and often overlooked, community in conversations about net-zero. We strongly support the report’s call for simplified, standardised sustainability reporting and the development of accessible digital tools to help them get started on their sustainability journey. Our goal is to create an enabling environment for SMEs to fully contribute to the achievement of the Paris Agreement goals and the Sustainable Development Goals.”
Nigar Arpadarai, The UN Climate Change High-Level Champion for COP 29 said: “As we gather in Baku for COP29, the urgency of our climate crisis has never been more apparent. Azerbaijan, as the host nation, has set an ambitious agenda that recognises the critical role of SMEs in our global fight against climate change. This report couldn't be more timely or relevant to our discussions.”
Read and download the full Unlocking Sustainable Finance for SMEs report.
Read more about Sage’s sustainability efforts, including its Sustainability and Society strategy.
This report is based on a global online survey conducted with business founders, owners, and senior managers in decision-making roles related to sustainability, finance, or operations. The survey, which has successfully run for COP27 and COP28, includes participants from leading markets and Sage Markets, with a specific focus on SMEs. Data collection was carried out via an online questionnaire, targeting businesses with fewer than 250 employees. The target markets include the UK, US, Canada, Australia, Germany, France, Spain, Poland, Brazil, South Africa, Thailand, Kenya, and Azerbaijan.
The survey gathered responses from a total sample of approximately 5,000 SMEs across these markets. A deep dive was conducted with a sub-sample of 1,000 SMEs, specifically targeting businesses already engaged in environmental reporting. This sample was also increased to include medium-sized enterprises (up to 1,000 employees) for more comprehensive insights.
Sage exists to knock down barriers so everyone can thrive, starting with the millions of small- and mid-sized businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology, and experience to tackle digital inequality, economic inequality and the climate crisis. Learn more at www.sage.com.
