Digitalization and the green transition have been at the top of the EU’s priority list in recent years. Embedding both into the economy has been recognized as critical for sustainable growth. To achieve this, the EU has actively shaped policies designed to support businesses and individuals, aiming to strengthen Europe’s competitive position globally. The commitment is also reflected in EU’s first-ever revision of its long-term budget, reinforcing its dedication to key policy areas, including the delivery of its green and digital transitions. In realizing this sustainable growth, trade credit insurance (TCI) and surety can serve as enablers by reducing financial risks, improving liquidity, and strengthening enterprises’ – especially SMEs – ability to secure affordable financing.
Safeguarding and boosting Europe’s competitiveness and prosperity, especially in the environment of growing global uncertainties, has gotten renewed attention. For 2024-2029, The European Commission’s (Commission) ambitious goals span sustainable prosperity, defense, security, and social fairness, emphasizing tangible solutions for a resilient European future. The new plan for Europe’s sustainable prosperity and competitiveness includes ambitious objectives (Figure 1).
To translate these ambitious goals into action, the Commission initiated a series of legislative and non-legislative policies aimed at clean technology, digital innovation, and economic resilience (Table 1).
Table 1. Commission initiatives for achieving sustainable prosperity and competitiveness for 2025
| Quarter | Policy | Legislative | Description |
| Q1 | Competitiveness Compass | No | Strategic guide to strengthen EU competitiveness. |
| First Omnibus Package on Sustainability | Yes | Streamlines rules to boost investment in sustainability. | |
| Second Omnibus on Investment Simplification | Yes | Improves capital access and financing for businesses. | |
| AI Continent Action Plan | No | Promotes AI use and addresses related digital risks. | |
| Clean Industrial Deal | No | Drives industrial decarbonization and growth. | |
| Communication on a Savings and Investments Union | No | Enhances the EU’s financial system to better channel savings into investment, supporting economic growth. | |
| Q2 | Third Omnibus Package | Yes | Further eases regulatory burdens, especially for SMEs. |
| EU Start-up and Scale-up Strategy | No | Supports growth and innovation for start-ups. | |
| Single Market Strategy | No | Reduces barriers to a unified EU market. | |
| Q4 | Industrial Decarbonization Accelerator Act | Yes | Speeds up permitting for green industrial projects. |
| Revision of the SFDR (Sustainable Finance Disclosure Regulation) | Yes |
Simplifies sustainability-related disclosures in the financial services sector to enhance transparency and comparability. |
|
| Digital Package | Yes |
Expands digital infrastructure and services. |
|
| European Business Wallet | Yes | Enables secure digital IDs for business use. | |
| Digital Networks Act | Yes |
Simplifies rollout of next-gen digital networks. |
Note: In Legislative column, No refers to a non-legislative type of policy and Yes refers to a legislative type.
Source: European Commission
However, a key link that puts these aims and policies into motion – bridging digitalization and green transformation – is investment, particularly in clean tech.
Investing in clean energy and low-carbon technology can often be done through supporting innovative, scalable SMEs, which are crucial to bridging these two major goals. Yet, a significant investment and finance gap persists, particularly for SMEs that struggle to access affordable capital and financial backing. Firms like these often operate on tight margins and face higher credit risk perceptions, making traditional financing harder to secure.
In fact, the 2023 European Investment Bank (EIB) Investment Survey shows that over 30% of EU firms cite lack of financing as a major barrier to commercializing clean and sustainable technologies. While only 12% of large companies report this issue, a notable 43% of micro and small enterprises face such challenges, highlighting the disproportionate burden smaller firms carry in driving the green transition (Figure 2). This is especially challenging given that SMEs make up 99.8% of all enterprises in the EU. Without sufficient funding, even the most innovative clean tech ventures risk stalling before they can scale or reach the market.
TCI and surety as supporting tools
Here is where TCI and surety can provide the support, acting as enablers by unlocking the capital, de-risking transactions and enhancing creditworthiness.
TCI does this by protecting sellers against the risk of non-payment from their buyers – whether due to insolvency, political upheaval, or simple protracted default. This protection strengthens a company’s balance sheet and gives banks more confidence to lend, knowing that receivables are secured. TCI providers also conduct ongoing creditworthiness assessments and offer insights into buyer risk, which helps SMEs make informed decisions and stabilize cash flow.
Surety, on the other hand, provides protection for project owners and lenders by ensuring that contractual obligations (such as completion of infrastructure or clean tech projects) are met. By underwriting performance and payment risk, surety instruments make it easier for innovative clean tech companies to win contracts and access working capital.
Both TCI and surety products are supported by robust underwriting, claims handling, and reinsurance frameworks that reduce systemic financial risk and boost investor confidence (Figure 3).
Supporting clean tech SMEs contributes to climate goals and strengthens the EU’s global competitiveness. ICISA members as credit insurance and surety providers who represent over 90% of the global private credit insurance market and enable more than €3 trillion in trade transactions annually are well-placed to support this transition with tailored solutions – promoting sustainable innovation while managing emerging risks.
ICISA is actively exploring ways to expand the role of private insurers in EU-level guarantee schemes, which have traditionally focused on banks. As part of this, ICISA has engaged in a constructive dialogue with relevant stakeholders involved in the development of public financial instruments to better understand how insurers might, in the future, contribute more directly to supporting investment in clean technologies and energy transition projects. An important step in this process is gaining recognition for insurance coverage as a risk mitigation tool, helping to open new investment channels. While these conversations are still at an early stage, the initiative reflects ICISA’s commitment to creating new opportunities for its members to support SMEs and participate more fully in sustainable finance through established public mechanisms.
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