OECD paper outlines four policy priorities to use AI and digital tools for SME sustainable finance

The OECD has published a paper on how artificial intelligence and digital tools could ease small and medium-sized enterprises' access to sustainable finance by tackling the information and processing bottlenecks that make smaller sustainable loans costly to originate and monitor. It finds that these technologies can help SMEs generate and share sustainability data and help financial institutions automate onboarding, credit assessment, compliance and portfolio monitoring, but that their usefulness depends on reliable data, interoperable systems and appropriate safeguards. The paper identifies four main barriers: SME opacity and information asymmetry, fragmented sustainability reporting requests and tools, uneven digital capabilities among SMEs, and high transaction costs for banks relative to small loan sizes. It sets out four policy priorities to address those constraints: build interoperable sustainability data infrastructure so SMEs can report once and reuse data across counterparties, strengthen verification and trust layers around SME sustainability data, create tangible incentives and support for SME reporting adoption, and ensure accountability, explainability and human oversight when AI is used in financing decisions. More mature applications include carbon calculators, e-KYC and automated monitoring, while more autonomous AI uses in due diligence and workflow management remain early-stage and are framed as support for human review rather than fully autonomous decision-making. The OECD adds that its Platform on Financing SMEs for Sustainability will continue to monitor developments and support policy dialogue on using AI to unlock sustainable finance for SMEs.