Sage Launches Game-Changing SME Carbon Tracking for Banks
Sage, renowned for its accounting and financial management software targeted at small and medium-sized enterprises (SMEs), has rolled out a Carbon Measurement API.
This innovation is poised to empower banks in championing their SME clients' strides towards achieving net-zero emissions.
The API comes as a beacon of resource for financial institutions looking to amp up their sustainable lending by integrating a seamless carbon accounting framework suited for SMEs.
Overcoming carbon accounting hurdles
Banks globally are under the microscope to slim down their carbon footprint, a measure extending to emissions spurred by their lending ventures.
The Partnership for Carbon Accounting Financials (PCAF) initiative pinpointed the challenge banks face in gauging emissions from their SME lending due to the absence of direct emission data.
George Sandilands, VP Carbon Accounting at Sage, said: “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.”
On the flip side, SMEs grapple with emission reporting thanks to resources and knowledge. Sage's API is a response to this issue, simplifying the emission reporting journey for small enterprises.
Boosting emissions data quality
Designed with an eye on the PCAF criteria, the API aims for a unified protocol in measuring and reporting greenhouse gas emissions related to loans and investments.
Sage underscores its potential in elevating the precision of emissions data, potentially propelling banks from reliance on vague estimates to accessing direct, accurate data.
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 simplifies carbon reporting for SMEs by harmonising their accounting software with this tool, leveraging artificial intelligence and machine learning for streamlined data collection and analysis. This precision in calculating carbon footprints aims to ease SMEs' reporting process to banks during loan appraisals.
"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," George added.
Its design ensures seamless integration with banks' existing frameworks, fostering a smoother transition to green lending practices.
Green lending's new dawn
The unveiling of this API could change green lending within the banking realm.
Banks now have at their disposal more reliable and readily accessible carbon emissions data for SMEs, enhancing the decision-making process surrounding their loan portfolios and potentially curating bespoke green financial offerings.
While making its debut in the UK market, the tool's global applicability is clear. With tighter emissions and sustainable finance guidelines taking shape worldwide, the demand for bridging solutions between SMEs and financial stakeholders is set to surge.
"We're seeing interest from banks across multiple regions. 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," George said.
Sage anticipates the API is merely the beginning of a broader voyage towards fostering sustainable business practices, with ongoing exploration into additional functionalities and integrations aimed at augmenting the tool's effectiveness.
“We're continuously gathering feedback from both banks and SMEs to refine and expand our offering,” George concluded. “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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