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Sustainable finance for the construction industry

January 10, 2020

The United Nations Environment Program reports that the building and construction industry use 40-50% of global energy use and 40% of global raw materials. As well as this it also accounts for 40% of solid waste and greenhouse gas emissions. And so increasingly SMEs are looking to help improve this with sustainable finance.

Protecting the future of the planet, sustainable finance can improve an SMEs bottom line. Therefore more often now government, banks and construction industry SMEs work together to ensure that sustainable construction projects get the financing and support needed to get off the ground.

For SMEs the main benefits of sustainable finance are:

1. Benefiting from lower interest rates

By choosing to finance eligible equipment, SMEs can reduce their interest costs. And so working with lenders, the Australian Government’s Clean Energy Finance Corporation (CEFC) is able deliver more better finance for clean energy projects. Having invested almost $520 million in 12 Australian green bonds, the CEFC has supported many first-time issuances from banks, universities, energy, property, retail and renewable projects.

2. Saving money on power and fuel bills

It’s not only the lower interest rates that save money. SMEs also increase productivity and save a significant amount of money on their electricity, gas, petrol and diesel purchases when choosing the more energy efficient equipment, building and construction.

3. Building better reputations

There are also much broader benefits for your business. As well as helping the planet, it also helps your business reputation. Consumers are far more eco-conscious than they use to be, and so SMEs that are run in a sustainable way getting more business.

Sustainable finance eligibility

Eligibility for construction industry SMEs include:

  • Financing electric or hybrid road vehicles
  • Improving fuel efficiency by using low-emission construction equipment

As well as this, sustainable finance can include using building materials that are better for the environment, such as:

  • Rooftop and off-grid solar panels
  • Best in class energy efficient air conditioning
  • Upgrades to energy efficient lighting

Do you want to find out how more? Then talk to one of our brokers