Motor Finance caught up with Alice Altemaire, chief executive of RCI Bank UK, who is speaking at Motor Finance Europe Conference and Awards on 19 October 2021 on the race to net zero within the motor finance industry. Here’s what she had to say about RCI’s own climate change goals.

Altemaire begins by discussing RCI’s own initiatives. “If we consider climate change to be an important topic in our current society, we can’t rely upon others to act upon it. Every individual should be able to take action.”

The race to net zero (the UK’s legally binding target to reduce emissions to Net Zero by 2050), was first pledged in 2019 and has been widely discussed through the media, multinationals, consumers and environmental protection agencies alike.

Some 43 leading banks made headlines this spring when they agreed to achieve net-zero emissions by 2050 or sooner. Altemaire acknowledges that within the motor finance sector, there are a number of actions that can be taken. So where does RCI Bank begin?

“The first step is looking at our emissions as a company, and how we can reduce that and be more sustainable,” Aldermaire explains. The next step was setting up a Green Team with employees who were enthusiastic about climate goals. “Through our Green Team we’ve identified a number of actions, implementing 11 different actions in the first year (2020), and further 14 new actions this year, with work ongoing on additional projects.”

These internal changes ranged from moving a large part RCI staff to electric vehicles and repairing their heating and air conditioning system. It included improving remote working to reduce professional travel, reducing the amount of paper through digitalisation, and reviewing the quantity of data stored on servers.

“We committed to cutting our GHG emission from our operations by half by 2030, which is 20 years before what is required from the SME Climate Hub. We’re compensating for any remaining GHG emissions from our operational footprint by contributing to certified Climate Change projects.

Influencing consumer change

The second step in RCI’s sustainability strategy is to support customers in making sustainable changes. Says Altemaire: “Being a motor finance company this is essentially about supporting the switch to electric.”

Supporting the switch may include incentivising electric vehicle purchases by offering loans on home electric car chargers, creating a different pricing policy on electric vehicles and/or adapting their products to finance more within their electric vehicle range.

Understanding the risk

“And last but not least because we are a bank so it’s crucial to understand the long term risk level of climate change and the impact of that risk level on our own balance sheet.  We want to ensure that we apply the right stress scenario.”

RCI began stress testing and climate scenario analysis last year, although it was only required by the ECB this year. Altemaire adds: “Part of taking action is understanding the impacts and mitigating risks in order to best support sustainability in the long term.”

Are these changes affordable?

The cost to audit the UK subsidiary banks’ operational emissions was less than £10,000 per year. “So at the scale of a bank with millions of results every year, that’s absolutely affordable.

“Our carbon footprint audit resulted in energy savings for the year, so you’re making a bit of investment to understand it, but understanding it enables you to reduce both the energy consumption and the cost of that consumption.”

Altemaire cites the example of a carbon audit that uncovered a leakage in the air conditioning system, which enabled RCI to fix it and reduce consumption costs.

Other changes such as the switch to electric vehicles for RCI’s teams were more expensive but Altemaire maintains that they are breaking even by saving on fuel costs.

“In terms of netting the remaining emission that does have a cost, but we are a company of 300 people. A large share of the emissions are linked with the remarketing of the vehicle including collection from customers, refurbishment and resale. Despite this, the cost of offsetting is around 15k per year, which is manageable. If you’re committing to doing it, it’s entirely feasible.”

Alice Altemaire will be presenting ‘The Race to Net Zero: How the Motor Finance Industry Can Work Towards Sustainability Goals’ at the Motor Finance Europe Conference and Awards, which celebrates leaders in the motor finance industry and cover the latest auto finance trends. Interested in joining? There are a limited number of remaining places, and you can register here.