Small and medium-sized enterprises and sustainable finance – European survey results

Abstract

The European sustainable finance framework targets large corporations but also affects small and medium-sized enterprises (SMEs). This paper examines how European SMEs engage with sustainable finance, focusing on financing channels, use of green and capital market financing, and integration into sustainability reporting, including costs and relevance of data collection. The study draws on two surveys distributed through European chamber organizations in 2023 and 2025. Core questions were kept consistent to enable comparability over time. The response rate declined in 2025, with 481 responses versus 2,142 in 2023, reflecting a general political downshift in sustainability related to the Omnibus reform of the EU Corporate Sustainability Regulatory framework. The sample remains stable regarding firm size and industrial sector, and includes a dominant share of German firms. Internal funds, traditional bank loans, and public funding programmes are the main instruments for financing SME sustainability, while capital market financing and green instruments are largely irrelevant. Traditional banking relationships continue as the primary external financing source. Many SMEs invest in sustainability without systematically collecting or reporting ESG data. Costs for sustainability reporting and ESG data collection in micro and small enterprises remain consistent with previous estimates. Despite growing “noise” around sustainable finance as a lever for the green transition, capital market financing and dedicated green finance instruments remain largely irrelevant for SMEs. Sustainability reporting is mainly driven through value chains rather than banks, indicating that market demand, not financial instruments, drives SME sustainability investment.