Getting access to capital to grow a midsize business isn’t always easy and doesn’t come cheap. The good news is that measuring your sustainability efforts can make borrowing more affordable. Banks and other financial institutions reward businesses with environmental, social and governance strategies by giving them lower interest rates and other advantages, a practice called sustainable finance.
As the heart of business processes and information, having the right ERP software is essential to collecting, measuring, and sharing sustainability data and KPIs.For example, when a business seeks a bank loan, there may be a sustainability KPI associated with that loan, such as a diversity or greenhouse gas emission target. And when the business hits that sustainability target, it’s rewarded in the form of lower cost of borrowing.
Even better, sustainable finance is no longer reserved for large businesses. Banks are increasingly committed to net-zero lending practices and, as a result, they are factoring sustainability into credit risk assessments for all their lending.the total value of ESG investment is on track to exceed 53 trillion dollars by 2025accounting for more than a third of all global investments. Midsize business cannot afford to overlook these sources of investment.
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