While recent media coverage has suggested that the European Green Deal is losing momentum and that sustainability requirements are being softened, this perception does not reflect the financial sector’s regulatory reality. Indeed, measures such as the Capital Requirements Regulation (CRR) and the Corporate Sustainability Reporting Directive (CSRD) continue to oblige banks and financial institutions to integrate ESG risks into their credit risk assessments. Consequently, it is misleading to believe that sustainability has lost significance. Even if small and medium-sized enterprises (SMEs) are not directly subject to mandatory sustainability reporting, ESG factors remain relevant for them—particularly through indirect mechanisms such as the Omnibus Regulation, which encourages or, in practice, compels SMEs to engage with sustainability topics via their relationships with larger, regulated partners (EY). In the summer of 2024, as part of the INTERREG Central Europe project GREENE 4.0, we hosted an event at a regional bank in Austria that brought together numerous SMEs and financial experts. The discussions clearly showed that ESG considerations remain a key element in the financial sector. Despite changing political narratives and a perceived easing of sustainability obligations, the regulatory framework - such as the CRR and CSRD - continues to require banks to integrate ESG risks into their credit risk assessments. Accordingly, no weakening of ESG relevance can be observed in the credit market. On the contrary, sustainability-related factors such as environmental performance, energy efficiency, and governance structures continue to play a decisive role in lending decisions. These findings are also supported by recent empirical research from the University of Applied Sciences Kufstein Tirol. The study investigates how ESG-related credit risks are currently assessed by financial institutions across Austria. Within this nationwide qualitative study, experts from various banks were interviewed to explore how ESG factors are integrated into credit risk management, how well SMEs are prepared for these requirements, and what trends can be observed in practice. The findings reveal a clear consensus: ESG and the associated risks remain highly relevant in credit assessment. While banks increasingly recognize the need to evaluate sustainability performance systematically, many SMEs still show room for improvement—particularly when it comes to building a reliable data foundation for ESG reporting and risk disclosure. At present, ESG risks do not yet directly translate into higher lending rates, but experts agree that this is likely to change in the near future. As sustainability integration advances, companies with higher ESG risks can expect higher credit spreads, or in cases of insufficient ESG engagement, even restrictions in access to financing. In such scenarios, enterprises that fail to address sustainability effectively risk excluding themselves from an essential source of capital. Banks clearly continue to integrate ESG criteria into their credit-risk assessments, showing that sustainability remains a core element of financial evaluation. Even for SMEs without direct reporting obligations, ESG performance increasingly signals stability, innovation, and long-term resilience to lenders and investors. This moment of regulatory flexibility offers SMEs an opportunity to strengthen their sustainability foundations - by improving data quality, adopting digital tools, and enhancing transparency in their operations. Such efforts will not only prepare them for future regulatory requirements but also improve their creditworthiness and market positioning. Those who act proactively can secure better financing conditions and build lasting trust with financial partners, while those who postpone action risk higher credit costs or limited access to funding once ESG criteria become more strictly enforced again.