Financing a Just Transition

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For the transition to net-zero to be successful it must be just. This means it must consider the social impact of change and help businesses adapt early rather than face widespread closures and job losses when they can’t meet new regulation; it must help SMEs invest into innovative solutions that create jobs and generate reinvestment into their communities.

All SMEs need to decarbonise by 2050 – earlier if they can, or they could be left behind by competitors, and access to finance will unlock their potential. In the UK however, access to finance is already a challenge for many.

Large banks are the biggest source of finance, but their automated, policy-driven approach means many viable SMEs are left unsupported. The challenger banks and fintech lenders also typically use centralised decision-making technology which doesn’t capture and analyse ‘soft’ information which can be gleaned from relationship-based approaches to lending. This restricts their ability to lend to SMEs in riskier industries, deprived areas, and those from already underserved groups.

Community Development Finance Institutions (CDFIs), like Southwest- based SWIG Finance, are non-profit lenders who help financially excluded SMEs to grow, create jobs and develop their local communities. They get to know their clients, challenge business plans, and take a flexible approach to lending when the bank has said no.

CDFIs also access their own capital from ethical sources. At SWIG Finance, we report our social and environmental impacts back to our investors so that they can see that their money is being used for good. Our latest impact report can be found on our website at