UK’s largest credit risk firm partners with Meckon and Swishfund to provide cheaper finance to greener SMEs via an eco-friendly ‘Green Credit Score’
20 June 2022, London – 4most, the UK’s largest independent credit risk and actuarial consultancy, has won a competitive government-funded SBRI award from Innovate UK, to develop a green lending proposal to UK-wide. The statistically developed “Green Credit Score” aims to drive climate action, while providing cheaper finance to greener SMEs by using environmental responsibility as a key indicator of creditworthiness.
The Green Credit Score is jointly developed by 4most, as well as cleantech consultancy Meckon and international fintech lender, Swishfund. As well as offering significant benefits to borrowers, the proposal will essentially put money back into the pockets of SMEs that take action to reduce their environmental impact. The project itself will provide a comprehensive set of data, credit risk analysis and scorecard, which 4most will make available to all UK credit institutions, including credit reference agencies and credit self-decision platforms.
Climate change is a big but hidden risk to many small businesses today, but these organizations are key to meeting the UK’s carbon targets. A recent survey by the British Business Bank found that 50% of UK corporate issuance comes from the SME sector. Despite this, only 3% of small businesses have measured their carbon footprint in the past five years*.
The Green Credit Score will inform SMEs of their current carbon impact, inform them of the main risks for their business in the transition to a low carbon economy and provide them with the tools to help mitigate these risks, while reducing direct emissions. and indirect carbon. .
Ivelina Nilsson, Client Partner and Head of Climate Change at 4most, said: “This project will create a virtuous cycle of measuring carbon footprints, providing risk-based finance and driving climate action. To develop the Green Credit Score, we plan to collect data from potential borrowers to estimate the different aspects of climate change risk to which they are exposed.
Sacha Meckler, Founding Director of Meckon, also commented on the importance of the project: “Great progress has been made in recent years in assessing the climate risks and impact exposures of large companies, and we look forward to working with 4most and Swishfund to bring these innovations to SMEs.
Andrew Jackson, Managing Director of Swishfund, added: “We believe companies that act sustainably are more likely to be financially responsible, but changing the corporate culture around greening is not just about providing information, it has to make business sense for business owners. This is why we seek a correlation between environmental responsibility and creditworthiness at all levels, so that each finance provider is encouraged to provide cheaper financing solutions to more responsible companies. Now it’s about gathering enough data to create a positive change in the way the risk industry currently thinks.
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