Financing Sustainability – a new insight paper from Siemens Financial Services (SFS) – looks at the challenges currently facing manufacturers on their journey to invest in sustainability initiatives.
As well as a compelling commercial goal, offering financial and business benefits, there is widespread consensus that sustainable manufacturing also provides ethical and reputational advantages.
The report outlines a variety of sustainability improvements that manufacturers can put in place to deliver cost savings, greater productivity, competitive brand advantage and increased security of supply, as well as making a contribution to carbon elimination, waste reduction and other sustainable goals. These include:
- Sustainability by design
- Energy efficiency
- Water conservation
- Raw material reduction
- Retrofit and refurbishment
- Recycling and repurposing
Many of these examples, but especially the last two, point to the growing importance of the circular economy in manufacturing machinery and technology. Instead of being replaced, technology can be retrofitted, refurbished, re-used and re-marketed.
Given the technology investment required to improve sustainability, as well as the current market volatility and uncertainty, the paper argues that manufacturers are reliant on specialist private sector finance to realise investments in sustainability improvements.
The research identifies the four main ways that smart, specialist finance contributes to ‘sustainability’. These are:
- Enabling investment in sustainable technology: aligning flexible financing arrangements with the expected rate of benefit gained through those investments
- Improved cash flow management: through tailored financing packages to suit a manufacturer’s cash flow needs
- Making the transition financially viable: ‘smoothing’ arrangements to manage onerous transitions from one production environment to another
- Helping sustainable technology vendors help customers: integrating smart finance as part of overall proposition facilitating customer investment in the best possible, sustainable solutions.
“Sustainability remains a top priority for manufacturers especially in the face of market and geopolitical volatility driving increases in energy and commodity prices,” comments Neli Ivanova, Head of Sales, Asset Finance at Siemens Financial Services UK. “We’re seeing more and more that specialist financing solutions are a key enabler to investment, giving businesses the tools they need to intelligently transform their processes.”
For further information on SFS, please see www.siemens.com/finance
Siemens Financial Services (SFS) – the financing arm of Siemens – provides business-to-business financial solutions.
A unique combination of financial expertise, risk management and industry know-how enable SFS to create tailored innovative financial solutions. With these, SFS facilitates growth, creates value, enhances competitiveness and helps customers access new technologies. SFS supports investments with equipment and technology financing and leasing, corporate lending, equity investments and project and structured financing. Trade and receivable financing solutions complete the SFS portfolio. With an international network, SFS is well adapted to country-specific legal requirements and able to provide financial solutions globally. Within Siemens, SFS is an expert adviser for financial risks. Siemens Financial Services has its global headquarters in Munich, Germany, and has around 2,900 employees worldwide.
Siemens AG (Berlin and Munich) is a technology company focused on industry, infrastructure, transport, and healthcare. From more resource-efficient factories, resilient supply chains, and smarter buildings and grids, to cleaner and more comfortable transportation as well as advanced healthcare, the company creates technology with purpose adding real value for customers. By combining the real and the digital worlds, Siemens empowers its customers to transform their industries and markets, helping them to transform the everyday for billions of people. Siemens also owns a majority stake in the publicly listed company Siemens Healthineers, a globally leading medical technology provider shaping the future of healthcare. In addition, Siemens holds a minority stake in Siemens Energy, a global leader in the transmission and generation of electrical power.
In fiscal 2021, which ended on September 30, 2021, the Siemens Group generated revenue of €62.3 billion and net income of €6.7 billion. As of September 30, 2021, the company had around 303,000 employees worldwide.