UK-based credit risk consultancy 4most has secured government support to create a green credit score designed to facilitate lower-cost financing for environmentally-conscious small and medium-sized enterprises (SMEs).
The initiative will be developed in collaboration with the boutique cleantech advisory firm Meckon and the international fintech lender Swishfund. Together, they aim to provide a robust dataset, comprehensive credit risk analysis, and a detailed scorecard. This resource will be accessible to all lending entities in the UK, including credit reference agencies and automated credit decision-making platforms.
The Green Credit Score will help SMEs understand their current carbon footprint, highlight potential risks associated with the shift to a low-carbon economy, and equip them with strategies to mitigate these risks while reducing both direct and indirect carbon emissions.
Ivelina Nilsson, client partner and head of climate change at 4most, stated, “This project will create a positive feedback loop that involves measuring carbon footprints, providing risk-based financing, and enhancing climate action initiatives. To develop the Green Credit Score, we will gather data from prospective borrowers to assess the various climate change risks they face.”