What is the financial argument for green assets?

Climate change is increasingly impacting people, businesses, the environment, and the economy. Many businesses are actively taking steps to understand and manage risks and challenges associated with climate change. Many are also taking advantage of the new opportunities it presents.

Bendigo Bank has committed to reducing emissions and supporting customers in the transition to a 1.5^oC future. Our Climate and Nature Action Plan sets out how we support our customers, communities, our people and business to prepare for and adapt to the impacts and opportunities of climate change.

Bendigo Bank has set public targets to reduce our carbon emissions and impacts on the environment and nature in our operations. We are also helping our customers take steps to mitigate, adapt and respond to climate change. Many businesses and communities are already taking action, with green assets a key way businesses can do this.

Solar panels were installed in 2008 on the roof of the Bendigo Bank head office in Bendigo. Power generated from these solar panels contributes to the head office being fully powered on renewable energy.

Bendigo Bank’s use of renewable energy solutions

“Bendigo Bank recognises the impact renewable energy systems can have in cutting emissions. We are keen to ‘walk the talk,’” said Brooke Pettit, Head of ESG and Sustainability at Bendigo Bank.

“Bendigo Bank is powered on 100% renewable energy, wherever we control the electricity contract. In addition to this, some Community Bank companies have installed solar panels on their branch buildings to help reduce their carbon footprint and lower operation costs,” she said.

“Considering other green assets can help scale impact. Opened in 2008, our Head Office in Bendigo was the first 5-star Green Star building in regional Australia. It incorporates features including water recycling, solar hot water, and underfloor air-conditioning.”

What are green assets?

A green asset is anything which helps to reduce the energy, water, or natural resource usage of your business. This includes electric vehicles and charging equipment, or solar panels and inverters. Other examples are storage batteries and energy or water saving technologies.

In 2002, Bendigo Bank was the first bank to offer green loans for green assets. For 23 years, our secured and unsecured green personal loans have helped customers purchase green assets.¹

Solar panels

Businesses can benefit from installing solar panels to generate electricity. In addition to lower bills, the Australian Government’s Small-scale Renewable Energy Scheme (SRES) provides incentives for installing solar panels and other renewable energy systems. Separately, through the Small Business Energy Incentive, small businesses can receive an up to 20% tax deduction for investing in energy-efficient upgrades.

Batteries

Real-world emissions reductions can also come in the form of battery installation, electrification of gas-based appliances and enhanced insulation. There may be higher upfront costs, so again, it’s important to get advice on what makes sense for your business. Renewable energy experts or your financial advisor can provide you with advice that’s specific to your needs.

Why green assets?

Investing in green assets is a good move now and into the future, and it can offer benefits both the environment as well as your business.

Reducing energy or resource consumption can reduce business costs and improve productivity. In the short-term, this can mean lower energy bills. Adapting early can also mean greater climate resilience and preparedness in the longer term.

Of course, the exact impact on a business will depend on many factors, including the payback period. This is the time over which the energy savings equal the initial cost of the asset. In addition to the overview below, there is guidance available to help you decide if green assets are a good option for your business.

Electric vehicles

Bendigo Bank is supporting customers to buy electric vehicles (EVs) through equipment finance.

The use of electric vehicles is increasing in Australia. EVs can provide a way for businesses that use vehicles to save on fuel costs and emissions. There are also potential Fringe Benefits Tax (FBT) cost savings associated with EVs. Where employers provide eligible EVs to staff, FBT is not payable if the vehicles meet certain criteria.²

Following a successful pilot, Bendigo Bank has begun transitioning its fleet to EVs.

“Through the pilot, we learnt that installing charging points in locations such as apartments can be more expensive, so EVs might be more appropriate for staff with on-site parking,” Ms Pettit said.

“We’ve taken this learning and adapted to make sure our staff are better supported in the transition. We’re installing EV chargers at our offices; procuring better, longer-range EV options; and reviewing our Motor Vehicle Policy and enhancing benefits available to staff with EVs,” she said.

“It’s important to factor in ongoing troubleshooting and support to make sure EVs work for staff and for the business.”

Make the switch to green assets

Is your business looking for ways to reduce your energy use and carbon footprint through a green asset? The Bendigo Bank Equipment Finance team can help find the right equipment loans, finance leases or asset purchases for your business. Our lending specialists can work with you to tailor equipment finance solutions and offer competitive pricing and flexible repayment structures to suit you.

Any advice provided in this article is of a general nature only and does not take into account your personal needs, objectives, and financial circumstances. You should consider whether it is appropriate for your situation. Please read the applicable product documentation including terms and conditions on our website before acquiring any product. Terms and conditions, fees and charges, and eligibility and credit criteria apply.

¹ Further information on green loans is available on our website: Secured Green Personal Loans and Unsecured Green Personal Loans. You should seek financial advice to help understand whether these make sense for your business.

² Further information on FBT exemptions is available from the Australian Taxation Office: https://www.ato.gov.au/General/Fringe-benefits-tax-(FBT)/FBT-exemptions-and-concessions/Electric-cars-exemption/. You should seek the advice of a professional tax advisor to understand your FBT obligations.