Dedicated private-to-private finance mechanisms to fund climate mitigation and adaptations actions are expected to play an increasingly important role in the post-Paris Agreement environment. These should be part of a much larger package of actions to reengineer our economy towards a green economy model.
In Europe, SMEs provide the majority of employment and generate more than half of the GDP. Europe therefore needs an enabling policy environment which reduces the barriers they experience when trying to access finance to fully exploit the opportunities offered by the green economy.
Europe needs a specific and dedicated set of policy measures at the core of European economic policy to facilitate access to green private-to-private finance instruments for green SMEs, both as recipients, i.e. implementers, and as investors. This set of measures should be consistent and integrated across scales (European, national, regional, local) and across Member States, while respecting cultural, social, environmental and economic specificities.
The set of policy measures should address the barriers SMEs experience, in particular related to technical and managerial capacity, skills knowledge and information, so that SMEs can exploit all the available private to private finance instruments. It is helpful to use a participatory, collaborative approach where SMEs and investors interested in the deployment of green economy solutions are involved in the development of the policy measures directly or through their multipliers. For example, this can be achieved through the establishment of a roundtable of SMEs and permanent investors.
A mandatory monitoring, reporting and evaluation mechanism which ensures that the flow of investments to and from the SMEs happens, and that investors, funding instruments and recipients meet green criteria in the broader sense should be deployed. Policy measures should include provisions to encourage the growth of direct peer-to-peer and citizens to SMEs mechanisms of investment, in particular crowdfunding.
Download the briefing note (PDF, 635kb)