ICC & Sage: $1.1tn Demand for Greener Finance Ahead of COP31

The International Chamber of Commerce has teamed up with tax specialist Sage to produce research into the green funding bottlenecks that SMEs are facing worldwide. 

The joint research highlights that to invest in a greener way of operating, 46 million SME’s would need US$1.1tn of funding. 

The funding would cover things such as solar panels, protection and efficient equipment against extreme weather and insulation. 

Only 1% of SME’s received green finance in the last 12 months, according to the research. 

Surinder Sond, VP of Sustainability of Sage says: “For small businesses, going green and saving money increasingly go hand in hand.

“Most of the climate action SMEs have taken so far, such as better lighting and using energy more carefully, has largely paid for itself through lower bills.

“That’s a big part of why it keeps growing year after year.”

Investment-ready ahead of schedule 

SMEs are facing limitations in getting funding, says the joint research. 

Published shortly before COP31, the timely figures note that more than 63% of greenhouse gas emissions from EU enterprises are down to SMEs.

Surinder continues: “The next set of actions are bigger: solar panels, insulation and more efficient equipment. “These need more money upfront, but they give a business more control over its energy costs and leave it less exposed when prices jump.

“There’s a resilience side to this too, our research with ICC shows that half of SMEs have been hit by extreme weather in the last three years, and most paid for the recovery themselves, from cash reserves or out of the owner’s own pocket. 

“Investing now is how a business protects both its margins and its future.” 

Funding could provide a reprieve for businesses looking to meet EU climate targets, in addition to business energy bills, as Sage and the ICC urge policy makers to focus on providing capital to investment-ready businesses. 

The ESG timeline 

The EU’s legally binding targets to cut net emissions by a minimum of 55% by 2030 and 90% by 2040 creates an urgent timeline for businesses and ESG strategy. 

Just over half (56%) of SMEs needing finance have already planned to invest in efficient energy or cleaner power. 

Closer to three quarters of SMEs surveyed (71%)  list the main benefit of environmental action as lower costs. 

Green finance applications from businesses have risen two thirds since 2023, however, the research highlights that the successful number of applicants has not changed. 

Global climate finance exceeded US$2tn in 2024. 

Already, four in five SMEs that explored green finance didn’t fill out an application. The research cites the main barriers for smaller businesses as being complicated processes and numerous requests for environmental information. 

For banks, the barriers involve a comprehensive weigh-up of cost and benefit to assessing and monitoring smaller loans.

Sage key partners: 

Microsoft: The software giant integrates Sage products with Azure, Office 365 and enterprise tools to streamline workflows.

Amazon Web Services: Combines Sage accounting and ERP tools with AWS cloud infrastructure for real-time analytics and scaling.

PwC: The partnership between the consultancy company and Sage combines digital and finance transformations with consulting and subject-matter expertise.