Sage, a financial solutions provider for small and medium-sized enterprises (SMEs), has launched its Carbon Measurement API, a tool designed to enhance green lending practices for banks by aligning with the Partnership for Carbon Accounting Financials (PCAF) standards. This innovative tool enables financial institutions to accurately report emissions from their SME lending portfolios, supporting their efforts to meet increasingly stringent climate-related requirements.
As banks face increasing scrutiny over both direct and financed emissions, compliance with PCAF’s 2019 guidelines has highlighted the challenges of tracking emissions data from SMEs due to limited resources. Sage’s Carbon Measurement API addresses these challenges, offering banks the reliable data needed to assess the environmental impact of their SME clients accurately
“The API offers banks a way to support their SME customers with tailored green finance products and accurate carbon reporting,” said George Sandilands, VP of Carbon Accounting at Sage “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.”
In addition to easing carbon data reporting, the API leverages AI and machine learning to integrate seamlessly with SME accounting systems, streamlining emissions data collection and enhancing the accuracy of carbon footprint calculations. This shift from PCAF’s estimated methods to precise, verifiable data enables banks to improve their reporting while providing SMEs with effective guidance toward net-zero emissions.
Darren Pirie, Climate Propositions Lead at NatWest and an early adopter of the API, emphasised its significance and said, “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 Carbon Measurement API represents a significant advancement in green lending, equipping banks with the data needed to make sustainability-informed lending decisions. Initially rolled out in the UK, Sage anticipates global interest as the demand for comprehensive carbon accounting continues to grow.
“We’re seeing interest from banks in 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,” Sandilands added.
