Exchange and market data provider SIX has launched an assessment service for banks seeking to understand the climate and sustainability risks in their loans to small and medium-sized enterprises (SMEs). SIX’s SME Sustainability Assessment Solution draws on the software-as-a-service platform of ESG reporting specialist Greenomy, with goals to help banks assess the sustainability performance and transition trajectories of SME clients. According to SIX, the tool facilitates calculation of the EU’s Banking Book Taxonomy Alignment Ratio (EU BTAR) – a regulatory metric determining the degree to which bank loan books are exposed to SMEs aligned with EU sustainability directives. SIX said that by enabling dialogue with SME clients, the solution would help financial institutions support clients in meeting emerging sustainability disclosure and reporting standards. “The importance of gaining a clearer insight into the climate credentials of SMEs cannot be overstated – after all, [they] represent 90% of businesses worldwide, not to mention 99% of the EU’s economy,” said Marion Leslie, Head of Financial Information and Executive Board Member at SIX. “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.”
