Sustainable use case

Sustainability finance case study

Sustainability financing for SMEs

How can small enterprises use flexible finance to affordably invest in renewable energy and sustainable products?

For small and medium-sized businesses (SMEs), setting sustainability goals is key to building long-term resilience and staying ahead of current and future regulations. However, implementing these goals often requires significant time and financial resources, which can lead to delays. Additionally, many business leaders perceive sustainable investments to be too complex or beyond their financial means – even when such initiatives could deliver cost savings over time. As a result, they may lack the confidence to invest in sustainability improvements. However, by engaging with experienced finance providers who can provide support in these circumstances, businesses can access expert knowledge and guidance on how to affordably, and simply, invest in sustainability initiatives.

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Strengthening sustainability

A marketing firm with around 200 employees wanted to reduce the environmental impact of its city-center office building, which it owns. Reducing impact would help the business comply with upcoming building regulations and achieve external sustainability certification, all whilst optimizing energy usage and reducing operational costs. The firm identified the installation of solar panels as an ideal first investment on their journey to achieve these goals. However, purchasing the solar panels outright, would result in tying up essential capital, and risk leaving cash flow squeezed for other business needs. To solve the issue, the company reached out to their trusted broker contact, at SFS, who typically assists them with IT and equipment financing, for guidance on how to fund the project more effectively.

Solar ready

Financing can play a crucial role in helping businesses achieve sustainability ambitions, as spreading the cost of investment in alignment with cash flows and budgets makes sustainable initiatives more attainable. In this case, the marketing firm's broker has established a strong working relationship with Siemens Financial Services (SFS). This existing partnership proved advantageous, as SFS had already completed due diligence on the current end-customer.

Given SFS’ knowledge in the renewable energy market, SFS was able to offer the customer a tailored finance lease to support the solar project. The broker utilized SFS’ online portal and auto-decisioning offering to receive an instant credit decision approval for the solar panels. SFS’ online portal efficiently generated and sent documentation for e-signing, enabling the supplier to receive payment quickly. Within the finance lease arrangement, the firm will make affordable monthly instalments over five years, aligning perfectly with their cash flow requirements.

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Leveraging financing

The speed and efficiency of the financing process got the marketing company thinking. How could they leverage financing for further sustainability investments? They explored LED lighting upgrades and EV chargers for employees as their next strategic focus.

This will allow the company to reduce energy consumption, with eco-friendly LED lighting using up to 75-80% less energy than traditional lighting, in turn reducing carbon footprint. In addition to cost-savings on fuel allowances, the EV chargers provide more convenience to staff when they are in the office and the general sustainability focus is popular with colleagues. New hires have voiced their approval of the company’s sustainability efforts.

Through SFS' online portal, the broker successfully arranged two additional finance leases to support these initiatives, positioning the marketing customer even closer to meeting long-term sustainability objectives.

Optimizing efforts

Not only can ‘small-scale’ sustainability initiatives significantly contribute to reducing carbon footprint, but they can also reduce overall business costs. However, we appreciate taking the first step can be daunting.

Partnering with experienced finance specialists who have helped other companies through similar journeys and therefore thoroughly understand the assets and their real-world use, means businesses can reduce upfront costs and risks with confidence.

Companies can begin to realize the immediate benefits from the efficiencies and cost savings, and make meaningful progress towards environmental goals through the implementation of renewable assets, all via a manageable finance lease arrangement and spreading payments over an agreed term.

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Contact our team

Antonia Jameson

Business Development Manager

antonia.jameson@siemens.com

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