As climate change rises up the political agenda, the business world is also responding to the challenge it poses.
“The transition to a new green economy is well underway,” says Richard Cawdron, a relationship director at Barclays Corporate Banking. “We’re helping our clients and customers understand and respond to the transition in a positive way, which benefits everyone.”
The key to fighting this global threat could be to accept that it brings opportunities as well as challenges. Increasingly, businesses are capitalising on the commercial opportunities of environmental sustainability – and there is a growing understanding in environmental circles that businesses, alongside governments, have a key role to play in protecting the planet.
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“It’s not just about doing what’s right for the environment,” says Viren Walia, a product specialist in asset finance at Barclays. “You have to do what’s right for the environment but still be able to prosper as a business.”
Unipart: environmental management excellence
One firm that agrees is Oxfordshire-based Unipart, which provides manufacturing, logistics and consultancy to the healthcare, IT, mobile telecoms, retail, rail, automotive and defence sectors.
Among the largest privately-owned companies in the UK, Unipart has won several environmental management excellence awards from the British Safety Council – and it was this that prompted Barclays to approach the firm to discuss the possibility of a green loan.
The bank quickly learned that Unipart wanted to upgrade its distribution centres with ‘smart lighting’ to make them more environmentally efficient.
Joel Magande, group environmental manager at Unipart, explains: “Unipart has distribution centres all over the world and we are headquartered here in Cowley. The Cowley distribution centre is over one million square feet and it had very old, inefficient lighting.
“We used to have tens of thousands of fluorescent tubes [but] we’ve now replaced those with LED lights which are 70% more efficient.”
There were three major benefits to the LED lights, says Magande. First, the lights are motion-sensitive, meaning they only turn on when they are needed.
Second, they adjust the brightness of the lighting they provide according to how much natural light is already entering the warehouse. Third, they are longer-lasting and require less maintenance than traditional fluorescent tubes.
These three benefits mean significant cost savings – Unipart estimated they would see a return on investment within around one year at their Cowley warehouse – but they also benefit the environment by consuming less energy. It’s a win for Unipart and a win for the planet.
“Environmental sustainability is at the core of our values because it improves productivity and efficiency,” says Magande. “It is very important to our employees and our business partners.”
A green loan for a green solution
Barclays was able to arrange a sustainable ‘green loan’ to fund the capital expenditure needed for the new lighting in Cowley.
Walia, who worked on the Unipart loan, says recipients of a green loan “get the financing under that product as they would have done normally”. But they also “get an accreditation that effectively says to investors, the market and indeed to internal employees that this loan has a green element to it – it’s being used for the purposes of benefiting the environment”.
This means there is a reputational advantage to the loan for Unipart – as well as a financial advantage, which will benefit its customers, shareholders and employees. But Unipart’s director of corporate affairs, Frank Nigriello, says doing the right thing is important in itself.
“For Unipart, the green agenda means doing things well and doing things responsibly,” he says. “We believe it’s something that should be intrinsic to the way a company operates and the way a company does business.
“Pursuing a sustainability agenda can seem like additional cost. What we’ve found is exactly the opposite: that we can make important cost reductions and important efficiency savings. And also to create a workplace that’s better and more appealing to our employees.”
Find out how Barclays Corporate Banking’s industry experts are supporting clients to achieve their ambitions at barclayscorporate.com
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