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SIX, the global financial information provider, has launched a new solution enabling the global banking clients of SIX to measure the sustainability performance of their small and medium-sized enterprise (SME) clients, and to assess climate and sustainability risk trajectories linked to their loan books. This product launch is following the company’s partnership with leading Brussels-based ESG assessment and reporting specialist Greenomy in December.
SIX is driving forward the increased inclusion of SMEs in financial markets. With their partnership, SIX and Greenomy are recognizing the pivotal role that SMEs can play in the transition to a sustainable and low-carbon economy.
SIX’ new SME Sustainability Assessment Solution draws on Greenomy’s market-leading software-as-a-service platform and assists SIX’ banking clients in efficiently assessing the sustainability performance of their SME clients. Additionally, it defines the sustainability transition trajectories of these debtors. The solution thereby facilitates the calculation of the EU’s Banking Book Taxonomy Alignment Ratio (EU BTAR). This new EU regulatory metric indicates the degree to which a bank’s loan book is exposed to SMEs aligned with EU sustainability directives and, in turn, supports a bank’s reporting requirements.
By also enabling a sustainability dialogue with SME clients, the solution aids financial institutions to support their SME clients to better meet emerging disclosure and reporting standards. This fosters sustainability improvements and enables SME clients to assess their sustainability and climate risk management transition trajectories.
SIX’ SME Sustainability Assessment Solution aims to free up banks’ valuable operations costs and resources by providing a one-stop-shop solution for performing sustainability assessments of SMEs – from inviting companies to complete a sustainability assessment, to ongoing monitoring of sustainability metrics in line with the EU’s Corporate Sustainability Reporting Directive (EU CSRD) and EFRAG’s European Sustainability Reporting Standards (ESRS). It offers step-by-step guidance along the corporate sustainability assessment journey with an adapted framework aligned with the EU Taxonomy requirements. The solution also allows the effortless retrieval of a standardized set of metrics to support green lending decision-making in line with the EU’s Green Assets Ratio (GAR) to identify EU-Taxonomy-aligned assets, and the EU BTAR calculation.
Marion Leslie, Head Financial Information and Executive Board Member, SIX, says: “The importance of gaining a clearer insight into the climate credentials of small and medium-sized enterprises cannot be overstated. After all, SMEs represent 90% of businesses worldwide, not to mention 99% of the EU’s economy. They also play an indispensable role in driving innovation and growth. We must do all we can to ensure lenders are well informed around the sustainability trajectory of firms seeking funding, not just to ensure capital is flowing towards the most socially and environmentally responsible businesses, but also to help banks deliver on their own climate funding commitments.”
Related Article: EFRAG Releases Exposure Drafts for EU Sustainability Reporting Standards for SMEs
Constance d’Aspremont, Chief Business Development Officer, Greenomy, adds: “With SIX’ profound understanding of the banking industry and expertise in company data management, we have a powerful ally in deploying a solution that truly meets the needs of SMEs and their banks. The new SIX SME Sustainability Assessment Solution, powered by Greenomy’s technology and sustainability expertise, aims to ease the reporting journey for SMEs and to empower them to take the next steps towards sustainability with confidence. This initiative is another testament to our commitment to empowering corporates, SMEs and financial institutions alike to navigate the sustainability transition.”