For banks, carbon data is no longer just a disclosure requirement. It has become a practical input into green lending, transition finance and capital deployment decisions. Whether through sustainability-linked loans, targeted SME green products or wholesale on-lending facilities, access to credible carbon data at the individual company level is increasingly becoming important in green finance, powering the move from strategy to execution.
At the heart of this shift is the ability to understand and compare carbon emissions across SME portfolios. For some banks, this data feeds directly into financed emissions and Scope 3 reporting. For others, it supports green eligibility screening, portfolio steering, or impact reporting tied to external funding. In all cases, the challenge is the same: most SMEs do not calculate or disclose their carbon emissions.
This gap, rather than a lack of capital or ambition, is what limits the scale of green finance today.
Why SME Carbon Data Matters for Green Finance
Green finance depends on evidence. Banks need to demonstrate where capital is flowing, what outcomes it supports and how progress is tracked over time. SME-level carbon data enables banks to do this in a structured and defensible way.
With carbon emissions data across their portfolios, banks can:
- Identify high-emitting sectors and clients with the greatest transition potential
- Design green and transition lending products with clear eligibility criteria
- Target SMEs that would benefit most from energy efficiency or decarbonisation finance
- Support wholesale green credit lines and on-lending programmes that require impact tracking
- Monitor portfolio alignment with climate commitments and net zero targets
Without this visibility, green finance remains difficult to scale. Decisions rely on proxies, engagement is inefficient, and capital deployment slows.
From Carbon Calculations to Portfolio Capability
Calculating SME carbon emissions is often perceived as complex and resource-intensive. In reality, the calculation itself is not the main barrier. The real constraint is how data is collected, validated and made usable at scale.
Most SMEs lack the time, expertise or incentives to produce full carbon footprints. Expecting widespread manual reporting creates friction for both banks and their customers. What banks need instead is a way to establish baseline emissions data quickly, improve accuracy where it matters, and continuously enhance data quality over time.
This is where the TDH and K423 collaboration is disrupting the status quo.
How TDH and K423 Enable Scalable SME Carbon Data
Unlocking green finance does not require perfect emissions data from every SME. It requires a credible, scalable and repeatable approach that balances coverage with accuracy and improves over time, which The Disruption House and K423’s collaboration provides.
TDH provides the data foundation and coverage layer. Using extensive research and public disclosures, TDH builds pre-populated company sustainability profiles across 100+ relevant data points, structured by sector and company size. With TDH’s disclosure analysis, banks can get an overview of the sustainability performance of the companies within their portfolios and get detailed insights on where they perform well or where they fall behind.
On top of this K423 provides the carbon calculation and data sharing layer. Through 423’s platform, SMEs can calculate and track their carbon footprint in a structured way, and then securely share that data with their bank and other trusted parties. This turns carbon calculation from a bank-led data chase into an SME-enabled process that is easier to scale, easier to repeat annually, and more useful for both decision-making and product eligibility
Together, TDH and K423 allow banks to:
- Establish SME carbon baselines across large portfolios
- Improve data accuracy through low-friction validation
- Maintain consistency across reporting, risk and finance use cases
Crucially, this means banks can focus on using the data, rather than struggling to collect it.
A Platform for Scalable Impact
Green finance does not have to be complex, slow or resource-intensive. The challenge for banks has never been a lack of capital or ambition, but the difficulty of turning fragmented SME data into something usable at scale.
By combining TDH’s sustainability insights with 423’s SME carbon calculation capability, banks can remove this friction. Carbon data becomes easy to generate, easy to update and easy to apply across reporting, green lending and on-lending programmes. Instead of carbon calculations delaying decisions, they enable them.
This approach allows banks to move faster, deploy green capital with confidence and demonstrate impact without overburdening internal teams or SME customers. In a market where speed, credibility and scale increasingly define leadership in sustainable finance, having the right data infrastructure is what turns green finance from intention into execution.
