SME climate finance stocktake: Turning ambition into action

Climate action

SME climate finance stocktake: Turning ambition into action

• 30 October 2025

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Despite the ambition and pivotal role that small- and medium-sized enterprises (SMEs) play in delivering climate solutions, they continue to struggle to access the needed climate finance to scale their sustainability efforts.

This report by the International Chamber of Commerce (ICC) and Sage takes an in-depth look at the current state of SME access to sustainable finance. Now in its fifth edition, it draws on survey data from 8,250 SMEs across 17 markets, alongside interviews with banks, investors, and international institutions. The findings reveal a clear divide between ambition and action: while many SMEs are eager to invest in greener operations, few are able to secure the funding to make that transition.

SME ambition is rising but progress remains too slow

A small group of medium-sized firms are at the leading edge of accessing green finance, particularly those in manufacturing and transport. Yet they represent only a small fraction of the SME landscape. Making green finance more accessible and affordable for all small businesses is now essential to realising global climate goals and ensuring an inclusive transition.

Encouragingly, banks and financial institutions are aware of this gap and are taking steps to close it. Across markets, they are widening lending options, introducing new sustainability-linked products and developing blended finance mechanisms that reduce risk and expand access. However, the report finds that momentum must accelerate to match the scale of SME demand and the urgency of the global climate transition.

Digital and AI are emerging as key enablers to scaling climate ambition

Crucially, the report finds that digital tools help SMEs overcome long-standing barriers by making sustainability reporting faster, cheaper and more reliable.

SME's using these technologies:

• Are 2.4 times more likely to have formal reporting systems

• Are 1.6 times more likely to apply for green finance

• 71% report having reduced their environmental impact,

• 78% believe these technologies will given them a competitive advantage within the next five years

Building on this momentum, new innovations are emerging to make it easier for small businesses to prove their sustainability credentials and access green finance, including: automated emissions calculators; pre-filled green loan applications that draw on real accounting data; shared SME data hubs supported by development banks; and AI tools that can automatically complete sustainability templates.

The next step is scaling these tools widely, so banks and investors can access the trusted data they need to open the doors to green finance for many more SMEs.

Five urgent actions to turn ambition into action

1. Governments and international standard-setters should develop simple, user-friendly and consistent reporting standards
2. Governments and development partners should establish a supportive ecosystem for SME sustainability reporting - by providing fiscal incentives, shared tools and SME capacity-building
3. Governments and technology firms should work together to leverage digital innovation and AI for streamlined reporting.
4. Governments, financial institutions and large corporations should standardise data requests and promote peer learning.
5. Banks and public finance providers should expand sustainability-linked products and technical assistance for SMEs.

2025 is a critical year for the Paris Agreement. Ten years on, we need to rethink how we frame the challenge. And seeing challenges differently is what business and we are all about.

ICC is committed to securing what businesses need at the upcoming climate negotiations, COP30, in Belém, Brazil. Learn more about our Opportunity of a Lifetime climate campaign and how to get involved.

*Disclaimer: The content of this article may not reflect the official views of the International Chamber of Commerce. The opinions expressed are solely those of the authors and other contributors.