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Green ROI a grey day

Business needs greater incentives and product choices to promote green investment

High costs, a limited environmental product range and an unclear return on
investment (ROI) for low-carbon equipment are just some of the obstacles that
businesses face in the bid to create a carbon-friendly economy in the UK.

Siemens Financial Services looked at a sample of businesses from SMEs to
large-cap public companies to find out more about their attitudes towards energy
efficient equipment, ranging from office equipment, IT, furniture and lighting,
to fleet and manufacturing equipment.

With 63% of companies not investing in low carbon emission equipment, Siemens
Financial Services listed the main reasons and obstacles as:
• Difficulties in calculating a return on investment;
• Perceived higher costs;
• Affordability – linked to an inability to associate costs with savings over
time; and
• Lack of product range.

As well as pointing out that asset financing can help give a clearer
indication of ROI, the research claims that tax incentives are at the forefront
of the battle to overcome these obstacles.

One of the tax incentives available is the Enhanced Capital Allowance
initiative, which enables businesses to claim 100% first-year capital allowances
on their expenditure on qualifying equipment. But the Treasury needs to develop
a wider range of schemes to encourage green
investment by companies.

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