Global machine builders are increasingly promoting the sustainable benefits their products bring to manufacturers. New research from Siemens Financial Services (SFS) reveals how these industry leaders define sustainability, and highlights investment-unlocking financing options.
Over 75 per cent of the world’s top 50 machine builders are emphasising sustainable factors such as energy efficiency and retrofitting when marketing their products. This is part of a sustainability drive that has become mainstream in business and is being felt by much of the manufacturing sector too.
As a result, many manufacturers are pressuring their machine builders for better sustainability features to aid emissions reduction. In turn, global machine builders want to stay competitive. Two-thirds say sustainability-enabling features are now essential to their value proposition.[i]
Defining sustainability
SFS’ research[ii] analyses the sustainability-enabling features from equipment and machines promoted by the world’s top 50 machine builders, based on their published statements. It identifies five clear priority levels for sustainability-enabling claims—ranging from universal claims to those that only affect a small number of organisations.
The most widely published sustainability benefit focuses on energy efficiency. Considered a core component of decarbonisation and resource efficiency, 77 per cent of top machine builders advertise this claim.
Promoting productivity gains is important for 70 per cent of the companies analysed. Achieved by digitalisation through Industry 4.0, these technological advances can help manufacturers do more with the same or less.
Circularity is cited as another major sustainability-enabling advantage. At 54 per cent, just over half of machine builders are offering retrofit and refurbishment options, and 45 per cent are remanufacturing worn parts. A circular approach conserves natural resources that are otherwise deployed for machine construction.
One further significant opportunity is a digital twin environment. Half of the top machine builders harness this technology to rapidly develop machines and collaborate with clients. Energy and materials are saved when machines are designed, built and tested in a virtual world.
Financing the transition
A sustainable transition necessitates financial investment for new-generation equipment or retrofit modernisation. However, manufacturers’ capital budgets are under pressure. Borrowing costs are higher, and global inflation has increased the cost of raw materials, energy and labour. In such a climate, most companies would rather have cash available so they can act nimbly if needed.
In the face of economic uncertainty, the research points to emergent specialist financing models. It identifies smart finance tools, which come in different forms. Such tools are often provided by third-party specialist financiers who possess a deep understanding of the underlying technology, alongside the commercial, sustainability-enabling benefits they bring.
A key advantage is that manufacturers do not need to find substantial amounts of capital to invest. Similarly, machine builders know that it is helpful for financing options to be embedded into their proposition at the point of sale.
Integrated finance is one such financing model. The machine vendor is paid straightaway, but the manufacturer’s cost is spread over several years through monthly payments aligning with cash flow. This structure operates separately from extant bank credit lines and covers the total cost of ownership through subscription structures.
Recipients of smart finance also benefit from flexible structures. Here, specialist financiers apply their technical knowledge to adjust the financing period to suit the individual needs of the customer, so that all options are affordable. Low-start or deferred payment structures fall under this category, meaning outgoings are aligned with operational benefits. Developing models include managed services and ‘as-a-service’ options, which are predicated on usage rates or outcomes.
Meanwhile, retrofit finance covers the modernisation of existing machinery, facilitating major savings on cost and carbon footprint for manufacturers. Expert financial knowledge in the retrofit process is crucial, to structure intelligently and effectively assess risk.
Finally, pay-later models are useful for machine builders seeking to manage cash flow. Payment for components can be delayed for up to six months. This means they can produce and sell the machine prior to paying for the components.
The next few years are likely to see increased levels of collaborative work between machine builders, financing partners and manufacturing customers. Subsequently, innovative forms of finance look set to play a significant part in the manufacturing industry’s sustainable transition.
Stefania Moruzzi, Business Development Manager, Siemens Financial Services UK
[i] From the Siemens Financial Services report ‘The winds of change: Talking Sustainability’, 2024. Over 100 machine builders were interviewed in 2024 - via a combination of qualitative and quantitative research methods. These machine builders were located across the globe, including the U.S., Europe, India and China. Respondents were asked their views on: the drivers of sustainability for
manufacturing customers; the ways in which their machinery and technology enables sustainability for those manufacturing customers; the role of finance to ease investment in more sustainability-enabling machines.
[ii] Siemens Financial Services’ report, entitled Defining Sustainability, is available here: Defining Sustainability - Manufacturing Leaders' Briefing Series
McMurtry Spéirling defies gravity using fan downforce
Ground effect fans were banned from competitive motorsport from the end of the 1978 season following the introduction of Gordon Murray's Brabham...