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Title page 1
Contents 6
Acknowledgements 5
Executive summary 8
1. Introduction 10
2. Why SME sustainable finance remains difficult 12
Opacity and information asymmetry problems 12
Fragmented reporting ecosystems 12
Digital capability gaps in SMEs 13
High transaction costs for banks and the challenge of scalability 13
3. How AI and digital tools can intervene 15
SME side: sustainability data generation and pre-financing 16
Financial institution front office: client interaction and origination 18
Financial institution middle office: credit scoring, ESG risk analytics and compliance 21
Financial institution back office: monitoring, reporting and portfolio management 23
4. Policy considerations 25
Building interoperable SME sustainability data infrastructure 25
Developing verification and trust layers around SME sustainability data 26
Incentivising SME adoption of sustainability reporting through financing advantages, non-financial support and operational simplification 26
Ensuring accountability and appropriate safeguards for the use of AI in SME sustainable finance 27
5. Conclusions 29
References 30
Notes 33
Boxes 7
Box 1. Digital tools for SME sustainability data generation 17
Box 2. Front office digitalisation for SME sustainability finance 19
Box 3. An overview of traditional AI, Generative AI and Agentic AI 21
Box 4. Middle office innovations in SME sustainability financing 22
Box 5. Back office automation for SME sustainability financing 24
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