Sponsored by Societe Generale Equipment Finance

  Supporting vendors partners and clients in their energy transition: what does it mean concretely?

Beyond the importance we all see in the development of CSR activities for the benefit of our planet, our commitment in this field is largely driven by our clients and partners. Indeed, more and more interactions with them concern energy efficiency, investments in sustainable equipment and asset life cycle improvement. But what does it mean concretely? What are our partners’ and clients’ needs? How can we support energy transition? As a lessor, what is our responsibility?

Within SGEF, to support energy transition investments, we have implemented an ambitious CSR strategy focused on three pillars: electrification, photovoltaic and energy efficiency.

Why Electrification is so important? 

Let’s take an example: In 2019, London was the first city in the world to introduce ULEZ zones (Ultra Low Emission Zone) in the inner city. Several other British cities (Birmingham, Leeds, Southampton, Nottingham, Derby) have followed this low-emission strategy by setting their own “Clean Air Zones”. To be comfortable with these new cities’ regulations, more and more companies have started to electrify their company car fleets. In parallel, their employees, customers and visitors have switched more and more to electric cars benefitting from new affordable and attractive models. In response to this shift towards electric and the need of the companies to be equipped in their premises, Total and ChargePoint have teamed up to provide Electric Vehicles (EV) charging stations. That was a perfect opportunity for us to accompany corporates in this domain. Thus, we signed a trading agreement with Total, and we are now offering leasing solutions for electric charging stations including hardware, real-time cloud services and maintenance. This example is one among many others throughout SGEF network. In many countries, SGEF supports low-emission transportation solutions: in Germany, Switzerland or Brazil, we also finance electric forklifts, LNG trucks, e-buses, public transport…

Photovoltaic solutions 

Our customers - large corporates but also SMEs – keep expressing the same need to sustainably reduce their energy consumption in their production facilities and to improve their own CO2 footprint all over the world. To accompany them, SGEF has been financing thousands of solar panels. In parallel, we are in the process of coordinating with main energy operators to provide structured financing solutions for high-volume projects (e.g. in Czech Republic). Beside photovoltaic solutions, there are a lot of needs in energy efficiency. To answer our clients’ concern in energy efficiency, we have developed few months ago a new service - “light as a service” - thanks to a partnership with a major international lighting actor. Concretely, we support clients’ energy saving investment by offering tailored leasing solutions. For example, in Spain, we have been financing for the past year and half a client investment in LED technology since they have decided to change the lighting of all their factories across the country. The same approach is used in the French market.

Circular economy

Another trend we observe, is our customers’ increasingly interest in an improvement of the asset life cycle management. They want to ensure that a sustainable life cycle of investments is guaranteed and that used resources (parts and components of old assets) are reinvested in new production processes. What we call circular economy. In this context, our unit in the Netherlands accompanies a major customer who has the ambition to become waste-free by 2030. To contribute to this goal, he has transferred the ownership and management of all its digital displays for data information communication to a supplier, partnering with SGEF. All equipment will be replaced in a sustainable way and SGEF will secure the financing. Another example of circular economy initiative is our collaboration with Philips Healthcare (SGEF is managing a total residual value risk portfolio of approx. 31MEUR for medical equipment. In case the end-user is exchanging or returning the asset at the end of the financing, the medical equipment is refurbished and re-sold with the support of financing in different markets).

The impact of the Covid crisis on energy transition

We cannot talk about energy transition without trying to assess how the Covid crisis will impact the business. On one hand, the Covid crisis has fragilized the whole economy. Some companies are fighting for survival. In this context, not everyone will be able to afford investing in sustainable. At the same cost, corporates may go for green assets, but they will not invest in sustainable assets if they prove to cost more. On the other hand, the Covid crisis, which is first a sanitary crisis, has raised awareness around environmental responsibility and maybe a certain sense of guilt. We can imagine that sustainable topics will increase in the minds of corporates and decision makers in the future.

Together with our partners and customers, we are taking responsibility to support sustainable business concepts and energy transition within the sectors we have an expertise: Transportation, Industrial, Technology, and Healthcare & Green. As a lessor, we are looking forward to financing the real economy through responsible, innovative and sustainable financial solutions.

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Jochen Jehmlich

CEO of Societe Generale Equipment Finance (SGEF)