ABN AMRO Lease helps pave the way for sustainable construction and logistics

Eight in ten businesses in the Netherlands took steps to become more sustainable in 2022. But few sectors feel this urgency more than construction and logistics, given the steady increase in sustainability-related rules and regulations they have to comply with. Construction companies have been affected by the nitrogen oxide emissions crisis, while transport companies now have to contend with low-emission – and even zero-emission – zones in a growing number of cities.

By financing emission-free machinery and equipment on favourable terms, ABN AMRO Lease has truly become the sector’s “sustainability partner”, says Roel Winters, Director of ABN AMRO Lease Netherlands. Indeed, ABN AMRO Lease provides businesses of all shapes and sizes with leasing solutions. Most are active in construction, transport and logistics, food, and manufacturing – all industries that need to pick up the pace to make the transition to sustainability if they want to future-proof themselves for all the rapid changes taking place.

Government requirements

“Sustainability always starts with your business’s core activities,” explains Roel, “like trucks or machines in a factory setting, for example. Times are changing – we’re seeing lots of sectors investing in more sustainable machinery and equipment. Plus their clients, which often include the state, are setting more and more requirements to do with sustainability. And even though businesses want to forge ahead in this area, they face high costs. As a leasing company, we can play a major role in making the economy more sustainable.”

To play that role effectively, ABN AMRO Lease is pulling out all the stops, financing up to 100 percent of a given asset’s cost, applying favourable interest rates, and linking the duration of a lease with the asset’s service life (as opposed to the customary five or six years). This means lower monthly overheads for businesses, freeing up funds for further sustainability and other investments.

Electric street sweepers

Van Doorn knows a thing or two about these advantages. The family-owned business is active in the construction and maintenance of infrastructure, traffic measures and green spaces and is tasked with mowing verges, pruning vegetation and infrastructure maintenance like sweeping and clearing drains. Its customers include the Dutch central government and Rijkswaterstaat (the national public works and water management agency), as well as provincial and municipal authorities. To carry out its operations, Van Doorn deploys around 200 transport and haulage vehicles – from delivery vans and tractors to trucks, cranes and street sweepers.

“Sustainability plays a big role at our company,” says Finance Director Martien Duel. “Eighty percent of the work we do is for the state. Rijkswaterstaat aims to be climate-neutral by 2030, and it requires its contractors to meet that goal, too.”

“Sustainability is part and parcel of our day-to-day work,” adds Barend van Doorn, a former board member and now equipment manager. “Electrifying all our equipment is a huge job. We currently have a fleet of about twenty electric buses and a few electric street sweepers. Plus we’re working on electric tractors.”

Twice as expensive

A client of ABN AMRO’s for over twenty years, Van Doorn had already been leasing all its larger equipment through the bank. Martien says, “We told ABN AMRO about wanting to electrify our equipment. Our leasing budget hadn’t changed for years, but electric vans and trucks are twice as expensive as what we have now. ABN AMRO immediately agreed to increase our leasing budget. They also lowered our interest rate by 0.35 percent, since we were allocating our budget to sustainable machinery and equipment. If your leasing budget totals several million euros a year, that makes a big difference.”

Both ABN AMRO Lease and Van Doorn plan to press on. Van Doorn has set itself the target of being fully electric by 2030, while ABN AMRO Lease aims to ensure by the end of next year that 20 percent of all the machinery and equipment it finances is sustainable. ABN AMRO Lease then intends to raise its share of sustainable assets by 15 percent each year.

Roel says, “That’s why we’re delighted to talk to our clients about their sustainability aims and the path they plan to take to get to fewer or zero emissions – and how we can contribute by offering them the best financing package possible.”

Towards a new norm

Roel continues, “There are fantastic opportunities out there for us and our clients. Growth potential is huge. Innovation, cost recovery periods and the availability of equipment make for challenging choices not just for our clients, but for us as well. Nevertheless, I strongly believe a reduction to low or zero emissions will become the norm for most machinery and equipment in the next five years.”

Barend says there are no regrets at Van Doorn about the transition they’ve embarked on: “Plenty of challenges lie ahead, particularly in terms of availability. And you can’t just drive an electric crane to a charging station, can you? But we’re really happy with the electric street sweepers, and there are more opportunities on the horizon. We’re taking it one step at a time. The bottom line is we believe electrification is the best choice for the environment and for the continuity of our own family business.”