How is Sage Boosting SME Sustainability Through Finance?

How can fintechs drive sustainability? 

Sage has stepped into the sustainability arena with its Carbon Measurement API, marking a significant leap in green lending practices

Whilst Sage is already known for its innovative accounting and financial solutions for SMEs, this tool supports banks keen on aiding their SME patrons' journey towards net-zero emissions.

Tackling carbon accounting hurdles

In the quest to lower carbon footprints, banks are under the microscope not just for their direct emissions but for those emanating from their lending portfolios. The challenge comes into sharp focus with the 2019-established PCAF (Partnership for Carbon Accounting Financials) guidelines, emphasising the struggle in tracking emissions due to a scarcity of direct SME data.

George Sandilands, VP Carbon Accounting at Sage, says: “By fostering a more sustainable business environment and offering tailored green finance products to their customers, banks can now better serve their SME customers by offering the tools needed for accurate carbon reporting.”

With SMEs often at a loss due to limited resources and expertise in reporting emissions, Sage's API proposes a simple yet effective solution to bridge this gap.

Data quality enhancement

Striving to align with PCAF standards, the Carbon Measurement API by Sage brings a robust solution to the table, enabling banks to upgrade their emissions data accuracy drastically. From PCAF's less precise estimates to relying on verifiable primary data, banks are looking at a transformative shift in how they assess their environmental impact.

Darren Pirie, Climate Propositions Lead at NatWest, states: “We need to provide carbon accounting and decarbonisation services to our 19 million business customers in the UK. By partnering with Sage, we are enabling businesses across the UK to embrace sustainable practices with confidence.”

The API not only simplifies carbon reporting for SMEs by linking their accounting systems but also harnesses AI and machine learning to streamline data collection and analysis, enhancing the precision of carbon footprint calculations.

George adds: “Sage is on a mission to support businesses on their journey to sustainability. This solution helps drive a greener economy, and in turn, reduces banks' financed emissions.”

The API’s integration-friendly nature ensures a seamless adoption within existing banking frameworks, making it an attractive proposition for institutions looking to greenify their lending processes.

Boosting green lending

The roll-out of this innovative tool hints at a transformative wave in green lending. By facilitating access to accurate SME emissions data, banks can make more informed lending decisions and potentially craft financial products that promote sustainability.

Although initially deployed in the UK, the application's relevance spans globally. With increasing global focus on sustainable finance and stringent emissions regulations, the interface between SMEs and financial backers stands to benefit significantly.

“We're seeing interest from banks across multiple regions," says George. "The need for accurate carbon accounting in the SME sector is a global challenge, and we believe our solution has the potential to make a significant impact internationally.”

Sage is not stopping here; it's actively seeking feedback to enhance and expand its offerings, aiming to establish a holistic ecosystem geared towards sustainable business growth and a transition to a low-carbon economy.

“We're continuously gathering feedback from both banks and SMEs to refine and expand our offering,” he concludes. “Our goal is to create a comprehensive ecosystem that supports sustainable business growth and facilitates the transition to a low-carbon economy.”

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