How green finance can support your transition to Net Zero

Businesses of all sizes and in every sector are seeking ways to reduce their carbon emissions – but financing the transition to more sustainable operations can be a challenge. Rebecca Pickering, of Oh Yes! Net Zero member Mercia Debt, explains why green loans could be the answer.

As concerns about the environment and climate change mount, and with growing awareness of the UK’s 2050 Net Zero target, there’s a palpable push for businesses to ‘go green’.

But, as many Oh Yes! Net Zero members have discovered, transitioning to more sustainable ways of operating isn't merely about the environment. It can also make business sense.

Rebecca Pickering, investment manager at Mercia Debt, said: “Over time, investments in sustainable technologies such as solar installations can lead to substantial operational cost savings.

“While this is a great reason to adopt them, focusing on sustainability can bring other important benefits too, from enhancing your organisation’s reputation among environmentally-conscious customers to being well-positioned for any new regulations the government decides to introduce in relation to carbon emissions.”

For all these reasons, more businesses are seeking financing to support their transition to low-carbon technologies and Mercia Debt is among the organisations that can help.

“As a fund manager for the Northern Powerhouse Investment Fund, we’re able to support small and medium-sized businesses with all manner of funding requirements, including loans that support their net zero goals,” she said.

“Through this fund we offer commercial loans of between £100,000 and £750,000, with larger amounts available through other funds.”

The Northern Powerhouse Investment Fund (NPIF) has a particular focus on investing in Yorkshire and the Humber region and is designed for growing businesses that can demonstrate profitability and/or strong cashflows.

Among the firms that have obtained finance from the fund is a northern-based retailer serving both business and consumer markets, which recently ventured into manufacturing.

It sought a medium-term loan to install a system of solar panels on the roof of its new manufacturing facility, with a smaller part of the loan earmarked for working capital.

Rebecca said: “What was noteworthy about this venture was the desire to integrate sustainability from the very start. The solar panels mean the facility is energy self-sufficient, reducing operational costs from day one, and significantly lowering the firm’s carbon footprint.

“For businesses on the path to net zero, debt finance can be a helpful way to bridge the initial investment gap. It’s more than just a financial decision – it’s an investment in the future.”

Oh Yes! Net Zero member Mercia Debt is part of Mercia Asset Management, a proactive specialist asset manager with a focus on ambitious business seeking funding for growth. NPIF investment decisions are made in person by an experienced investment manager who will take the time to understand your business and your goals.

The Northern Powerhouse Investment Fund project is supported financially by the European Union using funding from the European Regional Development Fund (ERDF) as part of the European Structural and Investment Funds Growth Programme 2014-2020 and the European Investment Bank.