As green legislation starts to permeate the financial services
sector, particularly asset finance, leasing companies, such as
Cooperative Asset Finance and Raiffeisen Leasing, are starting to
embrace renewable energies and carbon-neutral assets, while other
finance houses have finance packages designed to off-set polluting
assets.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
In the case of the latter, Henry Howard Finance, a sales aid and
broker specialist, which started in late 2006 and has since
reported a turnover for year end April 2007 of £35m, offers a
leasing package, known as eco-lease, that guarantees to offset the
carbon emissions of companies investing in environmentally harmful
equipment.
Henry Howard leases assets such as CCTV, refrigeration,
photocopiers, vending machines and EPOS systems to the retail
trade, and includes a formula matrix that calculates the damage
generated by business and office technology, and what steps, such
as tree planting, can off-set it.
Sales director at Henry Howard, Mark Crook, adds that the
eco-lease product is a reaction to the increasing emphasis on
environment protection and the impact of carbon
emissions.
“With a proven matrix, we are able to accurately calculate the
CO2 emissions. Henry Howard Finance invests in projects managed by
our strategic partnerships with The Carbon Neutral Company to
neutralise these effects,” Crook says.
Meanwhile, Cooperative Bank Asset Finance has moved out of the
small commercial end of leasing to concentrate more on financing
renewable energy, energy efficient and sustainable technology
assets.
“Our board approved a £400m investment into renewables six
months ago,” Richard Wilcox, head of structured and asset finance
at Cooperative, says.“We are concentrating more on those areas in
which we can add value and have a brand resonance with the
bank.”
The Coop finances assets such as wind farms, geo-thermal and
‘waste to energy’ technology, and district heating systems, which
is part of the bank’s ‘embedded generation policy’ and includes
building combined heat and power facilities (CHP), often in
conjunction with property development.
The Cooperative Asset Finance division’s focus on carbon
reduction, particularly CHP and renewables, is not only in line
with the bank’s brand power, but is also in response to legislation
from both the EU and British Government, according to Chris
Matthews, senior manager at the bank.
The Coop assists the financing of high-capital, energy efficient
assets for development and infrastructure, particularly for
property developers, who are now under increasing pressure to
increase energy sustainability, particularly in public
buildings.
Green leasing in the CEE
Similarly, Raiffeisen Leasing is one of the biggest investors in
‘renewable energies’ in Austria and focuses on financing wind
energy, bio-oil, biogas, biomass plants, photovoltaic and waste
systems. Raiffeisen financed €273m by year-end 2006, of which wind
energy contributed €136m and biomass ventures €72m.
But due to a change in the eco-energy legislation last year,
which limited security available for investors, RL suspended
financing activities in Austria. Meanwhile, it has begun
concentrating on financing renewable energy projects in the CEE and
south Eastern Europe, both regions where favourable eco-energy
legislation will ensure better security because of time spent in
planning and implementing economically feasible projects.
In 2006, RL established the joint initiative,‘Network Auto &
Umwelt’, which aims to create greater awareness of the advantages
of environmentally friendly vehicles and fuels.
Peter Engert, managing director of RL, says:“We have been
promoting renewable energy sources for many years and, for this
reason, have begun to change over our own company car fleet. By
doing so,we both signal and prove that cars operated by alternative
fuels function just as efficiently as traditional
vehicles.”
“The current subsidy system to promote ecological traffic
management is extremely complicated and is also insufficient.
Fiscal measures, such as HGV road taxes, ecotaxes, improving
infrastructure and the development of energy efficient engines, are
a step in the right direction,” Engert adds.
RL started supporting the leasing of natural gas vehicles in
eastern Austria with a direct subsidy of just €400 and of other
eco-vehicles with €300.
Engert says RL is concentrating now on developing eco-leasing in
Eastern Europe, not only through its own network, but also through
RLI’s reach.
Saving the forests
The car leasing division of ING Lease also provides new green
products, such as Safe Lease, Green Lease and CO2 Lease, which
ensures cash generated from energy neutral car sales is invested in
Malaysian forests.
Also, KBC Lease’s sister company, KBC AutoLease, which
specialises in fleet leasing, remarkets assets and engages in
creating green leasing products, a trend that KBC Lease is also
trying to develop in conjunction with the parent bank.“We have got
a lot of investment in alternative energies and are moving in that
direction,” a spokesman at the company remarks.
Surprisingly, Nordic leasing companies appear to be a little
behind on CO2 reduction.According to a Nordea Finance spokesman:
“There is always a discussion about CO2 emissions, but we have no
specific policy in place to restrict these emissions.”
The rate of change in the leasing industry is fragmented due to
the lack of a standardised policy and enforcement, and while some
companies tend to by-pass the issue, others are waking up slowly,
but steadily, to the changing demands of its customers and the
opportunities eco-friendly assets hold.
For example, Derren Sanders, head of equipment finance at HSBC,
says that, although green legislation has yet had little affect on
the business in terms of asset recycling, the nature of the assets
themselves are becoming more environmentally friendly. “Such carbon
neutral assets also show more sustainability and less chance of
going out of date quickly, and are therefore more economical,”
Sanders says.
