Financing Sustainable Investment Solutions

Mr Meyer, in order for German mechanical and plant engineering companies to remain competitive in the global market, they need to constantly reinvent themselves. Is there agreement within the industry that companies are required to offer technologies that promote sustainability?

Of the 50 leading engineering companies surveyed in the SFS study, 75 percent say they already offer their customers products and solutions with sustainability features. This shows that: The industry is well aware of the trend towards greater sustainability.

Why is sustainability important for companies?

There are two main reasons why companies are increasingly turning to sustainable solutions: On the one hand, authorities are demanding continuous improvement along the entire supply chain in order to achieve climate targets. These regulations are creating growing demand for sustainable technology – and making sustainability features a decisive competitive factor for machine manufacturers. What's more: Sustainability usually pays off financially as well ...

This means that mechanical engineering companies are positioning themselves for a secure future not only in ecological terms, but also economically?

Yes, because more efficient machines consume less energy and resources. And that not only protects the environment, it also increases productivity and reduces costs. This makes sustainability an important driving force for profit growth in the manufacturing industry.

So there are many good reasons to consider how to operate sustainably. What are companies focusing on?

Decarbonisation and resource efficiency are high on the agenda at the mechanical engineering companies surveyed, with a clear focus on energy efficiency. This is immediately followed by digitalisation: Industry 4.0 technologies promise significant productivity gains. The circular economy is also increasingly recognised as an opportunity. More than half of the companies concerned offer their customers in the manufacturing industry appropriate retrofit and modernisation solutions. This allows existing machines to be used for longer, which not only conserves raw materials but also reduces CO₂ emissions that would be generated when manufacturing new machines.

So it is the four aspects of energy efficiency, decarbonisation, circular economy and digitalisation that are emerging as guiding principles for transformation in industry ...

The SFS study confirms that the companies surveyed take these guiding principles of industrial transformation seriously. These four aspects are seamlessly integrated in the various technical solutions. One example of this is the Digital Twin: By simulating a machine, modernisation and commissioning can be planned and tested in the digital space. This enables companies to significantly reduce downtime in real systems and make processes more efficient.

What are the most frequently communicated sustainability promises?

Digital technologies and energy efficiency play a central role in communication. The manufacturing industry in particular is under growing pressure to invest more heavily in sustainable solutions. This trend is reflected in the rising demand for efficient production machinery. As the majority of emissions are generated not during manufacturing but during the operation of industrial machinery, resource-efficient and more powerful machines are more in demand than ever. As the majority of emissions are generated not during manufacturing but during the operation of industrial machinery, there is greater demand than ever for more powerful, resource-efficient machines.

What role do Industry 4.0 technologies play in this?

Digitalisation and the Internet of Things within the framework of Industry 4.0 also contribute significantly to sustainability. Machines with smart functions enable continuous data collection and analysis throughout the entire production process. This enables companies to make adjustments in real time, optimise processes and significantly increase both productivity and quality.

Ambitious sustainability goals must also be financially viable. What advice would you give to small and medium-sized enterprises looking for financing options?

Working with a technology financier like Siemens Financial Services enables us to combine financial and technical expertise to create tailor-made financing solutions. For example, the financing of a sustainability solution can be linked to the expected savings, thereby achieving a budget-neutral solution for the investing company.

How does Siemens Financial Services support machine manufacturers?

At SFS, we combine technical expertise, service and financing to provide a comprehensive solution. In cooperation with the market's leading engineering companies, we offer their customers tailor-made financing models. With our digital partner portal "SieSmart", we provide a specially developed online tool that enables sales partners to calculate and create financing offers directly at the point of sale. This enables us to combine personal consulting for complex projects with modern, digital service. In addition, we offer retrofit financing for modernising and upgrading existing machines – a sustainable and economically attractive alternative to purchasing new equipment.

Retrofit financing for machine builders – what's behind it?

Unplanned downtime, high maintenance costs, low energy efficiency – outdated machines can pose major challenges for companies. The central question is then: New purchase or modernisation? It is often quicker and more cost-effective to modernise existing systems, integrate new software and bring the machines up to the latest technical standards. This not only increases productivity, it also extends the service life of the machines, making a significant contribution to the circular economy and sustainability. For cases like these, we offer customised financing models that often pay for themselves through the efficiency gains achieved.

Does SFS offer comparable financing models for the system operating companies? Many medium-sized producers in the food industry in particular are looking for financing instruments to help them achieve their sustainability goals ...

Yes, we offer tailor-made financing solutions for mechanical engineering companies and technology manufacturers – both in the form of sales financing for their customers and for investments in new systems. The food and beverage industry is one of our most important sectors. Thanks to our numerous sales partners and customers in this field, we’re extremely well connected. In addition, we’re also active in related sectors such as packaging machines and filling systems, offering flexible and sustainable financing solutions.

More information: www.siemens.com/en