Small and medium-sized enterprises (SMEs) are central to the green transition, yet they face persistent barriers in accessing appropriate financial and non-financial support mechanisms. Despite rising demand for sustainable products and services, SMEs continue to encounter high upfront investment costs, limited access to tailored finance, information gaps, and heavy administrative burdens related to sustainability compliance. These challenges are compounded by the diversity of SME profiles—innovators, enablers, and adopters—each with distinct needs and constraints.

The challenge

In this context, governments, public development banks and financial institutions have launched a growing range of green financial instruments and support programmes, but the effectiveness, accessibility, and scalability of these measures vary widely across countries. As sustainable finance frameworks continue to evolve, policymakers require clear evidence on what works, why, and under which conditions, so that support schemes can be refined and expanded.

To address this, IDEA Consult contributed to the analysis presented in Chapter 5 of the OECD report, which synthesises insights from more than 20 international case studies and additional evidence on performance, challenges and success factors in delivering public financial and non-financial support to SMEs. The chapter responds to a key policy challenge: how to design and implement green SME support mechanisms that effectively target market gaps, unlock private capital, reduce compliance burdens, and strengthen SME capacity for sustainable transitions.

Approach & results

IDEA Consult supported the OECD by conducting a structured assessment of international practices, drawing on desk research and 12 interviews with public development banks, financial institutions, and programme managers involved in SME greening initiatives. This empirical foundation enabled a comparative analysis across diverse institutional settings and instrument types.

Key analytical steps included:

• Mapping trends in public financial support for SME greening: IDEA examined how traditional and innovative financial instruments are being adapted to address SME-specific risks and market failures. Particular attention was given to the role of public funds in crowding in private investment, de-risking early-stage projects, and enabling SMEs to scale commercially viable solutions.
  
• Identifying recurrent design and implementation challenges: through interviews and case study evidence, the team identified key obstacles affecting both SMEs and financial intermediaries, including:
  • Trade-offs between accessibility and impact when setting eligibility and reporting requirements.
  • The need for proportional, standardised sustainability reporting to reduce SME compliance burdens.
  • Gaps in awareness, technical skills, and internal capacity that hinder SME use of available support programmes.
  • Challenges related to intermediary selection, governance, and aligning incentives between programme owners and delivery partners.
    
• Extracting lessons learned and success factors across instruments: drawing from multiple country cases, IDEA developed a synthesis of actionable lessons, including:
  • Targeting specific market gaps where public intervention has the greatest additionality.
  • Designing support to remain flexible and adaptive, allowing programmes to evolve as sustainability frameworks and SME needs develop.
  • Integrating non-financial support (advisory services, audits, capacity building, digital tools) to strengthen SME uptake and ensure meaningful environmental outcomes.
  • Embedding sustainability considerations into the wider SME finance ecosystem to create long-term market transformation.
    
• Structuring findings into a coherent analytical framework: based on the evidence collected, IDEA contributed to the drafting of Chapter 5, organising insights around three pillars:
  • Key trends and features in financial support for SME greening,
  • Cross-cutting lessons learned, and
  • Success factors for designing and implementing SME greening instruments.

Read the report here! https://www.oecd.org/en/publications/scaling-up-public-financial-and-non-financial-support-for-sme-sustainability_bf835159-en/full-report/executive-summary_98aa1c72.html#execsumm-d1e163-f293c16076