Despite the global shift towards green financing, UK asset financiers may find it difficult to become standard-bearers for ESG financing, according to two leasing professionals from Metro Bank and Simply Asset Finance.
Commenting on the eve of the UN Climate Change Conference (COP26) in Glasgow on 31 October, Lauren McQuilken (business development director, asset finance) for Metro Bank and Alexandra McWilliams (broker support manager) for Simply Asset Finance, agreed that the emerging dangers from a warming planet would require professionals to “think creatively” and “on their feet” about how to provide green solutions for their customers as calls for green solutions increase.
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McWilliams and McQuilken made the comments during a 30-minute discussion with Lindsay Town, the CEO of IAA-Advisory, as part of a series of ‘fireside chats’ with UK future leaders, which went to air on 14 October.
Asked what they thought were the future themes for the asset finance industry, McWilliams identified “green financing and green energy” as significant and growing areas of funding.
“As businesses, we have to think about whether we can contribute to [ending] the environmental crisis … and what we can do internally and how we can help UK SMEs become more environmentally friendly and adapt to the changes that are going to be necessary for businesses to run,” McWilliams said.
McQuilken agreed that green funding is a key future theme for asset finance, adding that recent news events suggest that “we have to act and do something [about the environmental crisis],” which will require both “creativity” and “resilience” on the part of finance providers and businesses need to adapt “to the changes that will need to be made,” she said.
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By GlobalDataBut when pressed by Lindsay Town, the compere for the interviews, on whether asset financiers should become standard-bearers for ESG criteria, McWilliams and McQuilken said this would be difficult.
McQuilken said she’s been impressed at the recent market growth for electric vehicles across the entire road transport sector, including cars, vans, HGVs and buses. “If ‘normal’ assets can adapt and change, why not other assets?, she asked rhetorically.
The recent success in green vehicle financing has put asset finance businesses in good stead for funding other mechanised assets that are still undergoing transformation, she added.
McWilliams added that financiers can make a real difference by putting customers at ease over their lending decisions, but she admitted that “telling customers” that the lessor would not fund dirty assets “would be difficult.”
In addition, funders and banks “should be making themselves more comfortable about lending against these [greener] assets,” she said.
The interview and live Q&A was the first in a series of ‘Future Leaders’ interviews that Lindsay Town hosted this year, after eight interviews with ‘Leasing Leaders’, with both series sponsored by LTi Technology Solutions, a US-based global provider of in-the-cloud asset finance technology.
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