Sage launches carbon tracking API to support banks’ green lending

Sage, a provider of accounting and financial software for small and medium-sized enterprises (SMEs), has launched a carbon measurement API to help banks support SME clients in their transition to net zero.

The new tool aims to help financial institutions improve their green lending practices by offering an integrated carbon accounting solution for SMEs.

The Challenges of Carbon Accounting

Banks around the world are facing increasing pressure to reduce their carbon emissions, including those financed through their lending activities.

The Partnership for Carbon Accountability Framework (PCAF), launched in 2019, revealed the difficulties banks face in tracking emissions related to SME portfolios due to a lack of direct data.

George Sandilands, Vice President of Carbon Accounting at Sage, says: “By supporting a more sustainable business environment and offering their customers tailored green financial products, banks can now better serve their SME customers by giving them the tools they need to accurately report their carbon emissions.”

SMEs, for their part, often struggle to report their emissions due to limited resources and expertise. Sage’s new API aims to address this by simplifying the carbon reporting process for small businesses.

Improving data quality

The Carbon Measurement API is designed to help banks meet PCAF standards, which provide a standardized approach to measuring and reporting greenhouse gas emissions associated with loans and investments.

Sage says the tool has the potential to improve the quality of emissions data, potentially allowing banks to move away from less precise estimates (PCAF 5) towards more accurate, fundamental data (PCAF 2).

Darren Pirie, Climate Propositions Lead at NatWest, says: “We need to deliver carbon accounting and decarbonisation services to our 19 million business customers across the UK. By working with Sage, we are enabling businesses across the UK to adopt sustainable practices with confidence.”