Smart finance key enabler for sustainable manufacturing

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:

1. Enabling investment in sustainable technology: aligning flexible financing arrangements with the expected rate of benefit gained through those investments
2. Improved cash flow management: through tailored financing packages to suit a manufacturer’s cash flow needs
3. Making the transition financially viable: ‘smoothing’ arrangements to manage onerous transitions from one production environment to another
4. Helping sustainable technology vendors help customers: integrating smart finance as part of overall proposition facilitating customer investment in the best possible, sustainable solutions.

For further information on SFS, please see www.siemens.com/finance