SMEs Face $1.1 Trillion Green Finance Gap
New research by Sage and the International Chamber of Commerce examines why small and medium-sized enterprises struggle to access green funding.
Updated on Nov. 3, 2026 in Environmental
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Would your business invest in energy efficiency if financing were simpler?
Research from Sage and the International Chamber of Commerce analyzes a $1.1 trillion investment gap in green technology facing small and medium-sized enterprises. Applications for green finance have risen more than 65% since 2023, yet the share of SMEs receiving funding has not changed.
Why it matters
SMEs account for more than 63% of enterprise emissions in the EU, so their ability to finance sustainability upgrades bears directly on climate targets. Without changes that support smaller firms, governments could miss opportunities to cut emissions.
Eighty percent of SMEs that explored green finance chose not to apply, according to the Sage and International Chamber of Commerce analysis. Analysts have not yet identified a single fix for the complicated processes and duplicated ESG information requests that SMEs cite.
The players
Sage
Sage is a British multinational software company that provides accounting and business management tools to small and medium-sized enterprises.
International Chamber of Commerce
The International Chamber of Commerce is a global business organization founded in 1919 that sets international trade rules and advocates for business interests.
The details
SMEs that explored green finance applications cited complicated processes and duplicated requests for ESG information. Banks struggle to justify the costs of assessing smaller loans, while 56% of SMEs lack financial plans to invest in renewables and energy efficiency.
Timeline
2023: Baseline year for the 65% rise in green finance applications.
2024: Global climate finance exceeded $2 trillion.
Past 12 months: 45% of SMEs increased their sustainability efforts.
2026: Only 30% of SMEs prioritized sustainability, according to the NatWest tracker.
The Big Picture
The NatWest SME sustainability tracker found only 30% of small firms prioritizing sustainability for 2026, a figure this research helps explain through financing barriers. Together the two sources point to a gap between SMEs' stated intentions and their capacity to act on them.
Small business owners considering energy efficiency or renewable upgrades face the same complicated green finance applications and ESG reporting requests described in the research. Anyone weighing a loan for sustainability improvements may find the application process itself is the main obstacle.
The takeaway
Lowering the barriers to green finance for small firms may matter as much as the size of the funding available. Simpler applications and clearer lending criteria could help turn stated sustainability intentions into action.
Further reading
For more on how climate policy shapes business decisions, see Environmental coverage.
Live Poll
Would your business invest in energy efficiency if financing were simpler?
