Worldwide, small businesses (SMEs) need an estimated $1.1 trillion (£831 billion) to invest in green technology but are struggling to secure funding.
According to new research from technology company Sage and the International Chamber of Commerce (ICC), while global climate finance exceeded $2 trillion (£1.51 trillion) in 2024, smaller firms continue to have trouble financing practical improvements.
The research finds that 56% of SMEs need a finance plan to invest in energy efficiency or cleaner power, while 71% of those surveyed report lower costs as a main benefit of environmental action.
However, despite applications for green finance rising by more than two-thirds since 2023, the proportion of SMEs receiving it has barely changed. Many are funding improvements themselves, limiting what they can afford to relatively inexpensive changes rather than larger investments.
The biggest drop-off comes before businesses even apply, as four in five small businesses that explored green finance never submitted an application.
Ahead of COP31 Sage and the ICC are urging governments to look beyond headline funding commitments. This warning is particularly relevant to the EU, where SMEs account for more than 63% of greenhouse gas emissions from businesses.
The EU has set legally binding targets to cut net emissions by at least 55% by 2030 and 90% by 2040.
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