There is an air of militancy about
leasing these days. The debate over asset finance’s place in the
green revolution has become more like a shouting match, and even
politicians are having their say.
Sweeep, a UK recycling company, was
at the centre of a storm last month after, initially, Barclays
showed some risk-related concerns over financing one of its latest
bit of environmentally friendly wizardry – a piece of equipment
that can recycle thousands of television screens each day.
Go deeper with GlobalData
Immediately, Sweeep, the media and
then politicians united in a solid front against the bank, citing
the need for the financial sector to improve its commitment to
green energy projects.
“It is so important that our
financial sectors respond to the capital investment needs of
companies such as Sweeep,” cried the local labour MP for
Sittingbourne and Sheppey, Derek Wyatt (see lead article
“Green” furnace funding request presents underwriting
dilema)).
Eventually Barclays rose to the
challenge and, according to bank sources, around our time of going
to press, had unofficially agreed to cough up the £800,000 or so
needed to finance the piece of plant.
Asset finance, like it or not, has
finally reached the front of the political agenda, and it will only
grow in importance as the green debate intensifies.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAs with lending to SMEs, those
leasing companies which shy away from clean assets, for whatever
reason – whether it is uncertain residual values, lack of asset
knowledge or, as in Barclays’ case, difficulties involved in
relocating an asset in the event of a business failure – will be
given short shrift by everybody, from politicians downwards.
But there is plenty of evidence that
shows leasing companies are moving with the times and showing
commitment to financing green assets with a view to long-term gains
as well as, dare I say it, helping the environment.
Last month, for instance, Deutsche
Post DHL and Volvo Trucks signed an agreement to supply a whopping
1,800 environmentally friendly EURO 5 new trucks to the UK, Finland
and Sweden.
There are lots of examples of
European leasing companies going down the clean energy route, as
there has been already in the motor finance market.
According to the British Vehicle Rental and Leasing
Association, while in 2007 the average CO2 and mileages for
contracts signed was 157.4 g/km of CO2 and 21,643 miles, in 2008
this had dropped to 149.9 g/km of CO2 and 19,617 miles.
Much more, though, still needs to be
done, and will be done, whether the detractors like it or not,
particularly as the wave of green legislation coming out of
Brussels continues to flood national government’s agenda.
Only last month, the Finance &
Leasing Association became embroiled in a war-of-words with the UK
government over greenhouse gas emissions (see Brussels Watch on
page 11).
I hope, therefore, that the word
‘green’ appears somewhere on your agenda for 2010 and
beyond.
Brendan Malkin
brendan.malkin@vrlfinancial
