Digital reporting tools unlock billions in green finance for SMEs, study finds

A new Sage–ICC report reveals that while 70% of SMEs identify sustainability as vital, only 3% access green funding. Digital tools could close the $789 billion financing gap, unlocking climate investments and sustainable growth.

According to the Sage–ICC report, 70% of small and medium-sized enterprises (SMEs) now view sustainability as a core business objective, yet only 3% have accessed green finance , leaving an estimated $789 billion of potential capital untappe...

d globally. The study, SME Sustainable Finance Stocktake: Turning Ambition into Action, finds digital reporting tools are a key differentiator between SMEs that secure green financing and those that do not.

More than 8,200 firms across 17 markets were surveyed for the report, which shows medium-sized companies (those with more than 50 employees), particularly in manufacturing and transport, are likeliest to have adopted digital accounting, e‑invoicing and AI‑driven carbon‑tracking tools , and correspondingly more likely to apply for and win green finance. Automated data collection makes these businesses 2.4 times more likely to have formal reporting systems and 1.6 times more likely to apply for green finance than peers without such tools, the report states.

The research casts the lack of dependable reporting as a financing trap. More than 60% of SMEs said poor data quality and the absence of reporting tools prevent them from producing the formal sustainability disclosures lenders require. Without that verified data they remain ineligible for favourable green loans, even though financing would allow investments , in low‑carbon equipment or sustainable packaging, for example , that reduce costs and unlock incentives.

“[SMEs] are on the frontline of climate action, but too many are still locked out of the finance they need to grow sustainably. The barrier isn’t intent; it’s access to the tools that can help them scale their businesses while building resilience,” Elisa Moscolin, executive vice‑president of sustainability and foundation at Sage, said to ERP.Today.

Industry and policy initiatives are attempting to close the gap. The OECD’s Platform on Financing SMEs for Sustainability brings public and private actors together to share data, build analytic tools and design policy measures to improve SME access to sustainable finance. Meanwhile, fintech and marketplace innovations , from AI‑powered ESG trackers highlighted by the SME Finance Forum to tokenised lending and invoice financing pilots described by Greengage and partners , show alternative routes to rapid, verifiable reporting and faster credit delivery.

Sage’s broader analysis also recommends simplified reporting standards, wider access to affordable digital tools and stronger financial incentives to create a “virtuous circle” in which reporting enables finance, and finance accelerates climate action. The European DIGITAL SME Alliance and other sector bodies echo this, urging support measures and skills development so smaller firms can adopt the digital practices that lenders increasingly expect.

For ERP and enterprise software insiders, the implication is clear: digital and AI capabilities are now strategic enablers of capital access, not just operational efficiencies. Vendors who embed easy‑to‑use carbon tracking, automate sustainability disclosures and interoperably surface verifiable data will materially improve SMEs’ chances of securing green financing and meeting evolving regulatory expectations.

Policymakers and lenders must also act. Standardising disclosure requirements, subsidising tool adoption for the smallest firms and recognising interoperable, machine‑readable reporting in lending criteria would reduce friction and unlock a large pool of finance-ready SMEs. Without those changes, many firms will remain willing but effectively excluded from the capital needed to scale low‑carbon investments.

The Sage–ICC findings underline a practical route: make reporting less costly and more reliable, and a substantial share of the $789 billion opportunity could be mobilised to finance SMEs’ transition to more sustainable business models.

Source: Noah Wire Services