Financial market infrastructure provider SIX and sustainability reporting software provider Greenomy announced today the launch of a new solution aimed at enabling SIX’ banking clients to efficiently assess the sustainability performance and transition trajectories of their small to medium enterprise (SME) loan customers.

The new solution comes as banks increasingly set commitments to monitor and improve the sustainability performance of their financing activities, and as they face growing regulatory pressures to report on ESG aspects of their business’ value chains. According to SIX, the solution aims to free up banks’ operations costs and resources by providing a “one-stop-shop” solution for performing sustainability assessments of SMEs from inviting companies to complete sustainability assessments to monitoring of sustainability metrics in line with the EU CSRD regulation.

Marion Leslie, Head Financial Information and Executive Board Member, SIX, said:

“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.”

According to SIX, the new SME Sustainability Assessment Solution enables banks to define the sustainability trajectories of its debtors, facilitating the calculation of the EU’s Banking Book Taxonomy Alignment Ratio (EU BTAR), a new EU regulatory metric indicates the degree to which a bank’s loan book is exposed to SMEs aligned with EU sustainability directives.

By enabling a sustainability dialogue with SME clients, the solution also aids financial institutions to support their SME clients to better meet emerging disclosure and reporting standards, according to the company.

The new solution follows the launch of an alliance between SIX and Greenomy in December 2023, aimed at helping financial institutions and companies to comply with ESG frameworks, measure and improve sustainability performance, and access green finance opportunities.

Constance d’Aspremont, Chief Business Development Officer at Greenomy, said:

“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.”