Businesses are delivering low-carbon transport solutions

From zero-emission electric bikes to biogas-fuelled buses, HSBC is supporting the businesses changing the transport industry.

With global megatrends of population growth, increasing urbanisation, and climate change high in the public consciousness, the development of Future Cities needs to address all of these challenges.

Clean or sustainable transportation is one part of the solution, as according to figures quoted in a report by HSBC Global Research, the transport sector is responsible for 16 per cent of global greenhouse gas emissions from human activity.

This makes transport a significant area of focus for governments, businesses and individuals seeking to reduce their environmental impact.

In April, an ultra-low emissions zone, one of Europe’s toughest, was introduced in London. Two months later, the UK became the first major economy to legislate for net-zero carbon emissions.

We expect the momentum of policy change to grow globally and we are actively supporting businesses around the world trying to cut transport emissions and capture new opportunities that emerge in this area.

The following SME clients in the UK illustrate how we are working together to make communities more environmentally sustainable.

e-cargobikes.com

The company’s ethos is to “inspire and motivate the communities in which they operate through the provision of facilities that enable them to make choices that will have a positive impact on the quality of our environment.”

e-cargobikes.com offer last-mile delivery services to grocers and retailers throughout the UK. This zero-emission, energy-efficient transportation offers retailers an environmentally and financially sustainable alternative to fossil-fuelled vehicles in high-density urban areas, and also encourages social benefits by promoting more active lifestyles and helping to create safer communities. The company is already live with deliveries direct to the home or office for Co-op Food in London, with deliveries in Manchester due to start in late 2019. In addition, e-cargobikes.com is also running trials for several other major grocers and retailers.

e-cargobikes.com was an existing HSBC UK client, but a step change in the relationship occurred when the company was looking for asset and invoice financing. It had already made significant commercial progress by securing a delivery contract from Co-op Food and by obtaining exclusive rights to their specific electric cargo-bike which gave it an important competitive edge in the market.

The asset finance has the capacity to fund a further c.140 bikes to grow its fleet allowing the business to fulfil its obligations under the new contracts. HSBC were able to provide a holistic sustainable financing offering of a GBP0.5m asset purchasing facility, and a further GBP2m invoice finance facility to support the company’s fast growth.

Financing solutions, plus having access to dedicated sustainability support from HSBC, has put e-cargobikes.com in a good position to achieve strong and sustainable growth. HSBC looks forward to continuing this partnership for wider-scale environmental and social change.

What does e-cargobikes.com say?

The naturally occurring bi-products of the switch from van to a more efficient e-cargobike last-mile delivery platform are operational, financial, environmental, and social sustainability … the tricky part is making business leaders aware of this transformational opportunity – HSBC’s support in this is invaluable

(James FitzGerald, Founder and MD, e-cargobikes.com)

HCT Group

HCT Group’s mission is to ‘enhance people’s lives, provide opportunities and bring people and communities together through transport and training’. HCT provides various commercial services ranging from London red buses, to school and social services transportation.

The social enterprise reinvests its profits into further transport services or educational projects within the communities it serves and one of its objectives in doing so is the use of environmentally friendly vehicles wherever possible.

This objective has also paid commercial dividends in the last couple of years. For instance, it fits well with Transport for London's (TfL) policy for the use of hybrid buses, and has been one of the factors in HCT winning additional premium TfL red bus routes in London.

HCT has been an HSBC client since 2015 and the bank has worked closely with the Group in providing working capital and vehicle financing. A recent example of this was HSBC's support of HCT’s operation in Bristol, CT Plus, in its investment in a new fleet of buses that use biogas rather than traditional fuel. The biogas is generated from the fermentation of food waste supplied by the Gas Bus Alliance, which is cleaner for the environment and provides up to 20% in fuel savings.

CT Plus was recently successful in winning an important 10 year contract for three key Metrobus routes in Bristol. In order to fulfil the contract, CT Plus needed to buy 21 new Scania buses. While some of the cost of this would be met by GBP1.6m of grant from the Department of Transport under the Low Emission Bus Scheme, this still left a funding requirement of GBP7m. HSBC provided a hire purchase facility to cover this that matched the 10 year contract term, which has helped CT Plus commercially, and put the Bristol area at the forefront of low-emission sustainable bus operations creating 60 new jobs in the local community.

What does HCT say?

It’s a great opportunity to serve the communities of Bristol and South Gloucestershire, helping people to get out of their cars and onto public transport. Biogas buses represent a great step forward for reducing the environmental impact of public transport – ensuring we’re doing our part to tackle climate change.

(Dai Powell, HCT Group Chief Executive)

Future Focus

HSBC's support for e-cargobikes.com and HCT Group has assisted these growing businesses in achieving their sustainable ambitions and forms part of the bank's broader commitment to reducing carbon emissions.

Read more:

Case studies about helping clients access sustainable financing

https://www.business.hsbc.com/sustainability/our-solution

What businesses are telling us about sustainability. Download the Navigator: Made for the Future report

https://www.business.hsbc.com/navigator


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