Sage, a leading company in accounting, finance, HR, and payroll technology for SMEs, has published its global report “Unlocking Sustainable Financing for SMEs,” which highlights the growing importance of sustainability in the business landscape. The report reveals that 73% of Spanish SMEs have implemented sustainability policies, surpassing the global average of 61% and positioning Spain as a leader in the fight against climate change.
Growing Commitment to Sustainability
SMEs worldwide are increasing their commitment to sustainability, with 86% considering it crucial to their business. In Spain, this commitment is even stronger, with 77% defining it as a “central” or “important” aspect of their operations. Additionally, 73% of these companies already have sustainability reporting systems in place, and 59% have adopted renewable energy sources.
This Spanish leadership is not without challenges. Despite the high level of commitment, 78% of SMEs feel that reporting processes remain too complex, hindering effective implementation.
Opportunities in Green Financing
The Sage report, presented at COP29 in Baku in collaboration with the International Chamber of Commerce (ICC), emphasizes the importance of “green financing” as a driver to enhance climate action among SMEs. It is estimated that globally, SMEs could access a sustainable financing opportunity of $789 billion through sustainability-linked loans, green bonds, and specialized credit lines.
However, access to this financing remains a challenge, as only 2.8% of SMEs have applied for funding in the last three years due to the complexity of the process and stringent reporting regulations. In this regard, Spain stands out for its leadership in obtaining green financing, with 59% of SMEs having sought this type of funding, and 36% having succeeded.
The Virtuous Circle of Sustainability
The Sage report identifies a “virtuous circle” that allows SMEs to accelerate their climate action through three key steps:
- Sustainability Reporting: SMEs that implement digital reporting tools are 5.1 times more likely to formalize their processes and measure their environmental impact.
- Increased Access to Green Financing: Companies with detailed reports are 1.5 times more likely to secure funding for sustainable projects.
- Greater Climate Action: With access to capital, SMEs can invest in energy efficiency and products with a lower environmental impact.
A Strategy for a Sustainable Future
Surinder Sond, Executive Vice President of Sustainability and Society at Sage, emphasizes the need to support SMEs in their ecological transition: “There is no path to net zero without SMEs, which represent over 90% of businesses worldwide. To accelerate their climate action, we must unlock this ‘virtuous circle’ by simplifying reporting, improving access to financing, and utilizing digital tools.”
The report concludes that fostering this circle will not only boost the sustainability efforts of SMEs but also enhance their financial resilience and competitiveness, creating a scenario where both businesses and the environment thrive.
Source: Sage