Environmental services businesses are facing a period of tumultuous growth as emerging technologies and a widespread move to sustainability create demand for innovation. Waste management and recycling organizations trying to adapt to emerging requirements often find themselves in a difficult position as significant changes require new equipment, vehicles, and even facility investments. Mid-sized businesses hoping to keep up with larger competitors have an opportunity to use innovative equipment to stand apart, and strategic funding can go a long way in making that possible.
While spending heavily on new equipment can seem daunting, organizations can't afford to miss out on the opportunity to advance their capabilities as the industry goes through a period of rapid change.
Innovation ahead in environmental services
Change is afoot for environmental services firms, as even public sector groups are prioritizing spending in the sector to drive progress. According to an Onvia study on state and local government procurement, year-over-year spending increased 5.5 percent during the fourth quarter of 2017. While a variety of operational areas benefited from this increase, the environmental services segment experienced some of the fastest spending growth.
Investing in waste management and environmental services is occurring at a time when many organizations are facing demand to become more sustainable and efficient in how they operate. With commercial, industrial and consumer groups embracing green practices, waste management companies have an opportunity to expand their service offerings. In practical terms, this puts pressure on environmental services businesses to:
- Become more efficient and sustainable in their own practices.
- Expand services to incorporate handling a wider range of waste types.
- Deploy equipment designed to process varied materials and support emerging operational strategies.
Smart solutions, dubbed as intelligent because of their ability to connect to networks, allow environmental services businesses to modernize their operations around data-driven processes. As such, organizations increasingly find themselves blending equipment investments that promote sustainability with those that allow for smart solution use, bringing about rapid change. In fact, the market for smart equipment is gaining momentum quickly.
Smart equipment in environmental services
A Technavio study found that the global smart waste management market will expand quickly, achieving a compound annual growth rate of 18 percent for the 2018 to 2022 period. Key factors shaping the industry include:
- Rapid innovation in waste collection, which took 62 percent of the smart equipment market share in 2017.
- A move into waste processing, as investments in this segment will outpace those in landfills.
- A growing emphasis on operational efficiency across the entire waste management life cycle.
Key technologies emerging as firms embrace smart equipment include driver-assistance solutions and autonomous vehicles, embedded systems focused on real-time data delivery, artificial intelligence and the industrial internet of things.
Environmental services firms are embracing new technologies and equipment, and funding can help mid-sized firms advance their initiatives and fuel industry progress.
Using financing to bolster equipment innovation
Smart equipment is designed to fuel efficiency and sustainability gains, creating opportunities to drive return on investment from strategic spending. As such, finding initial capital to support equipment purchases can go a long way toward creating consistent profitability. Comerica can position organizations to take advantage of this opportunity through financing that emphasizes lending for equipment leasing and specialized options for environmental services firms.
With change happening quickly in the sector, organizations can't afford to sit back and wait to see how the market unfolds. At Comerica Bank, we work closely with our clients to understand their business needs and become a key part in their growth. Our loan options can help you position your business for the future, and it’s a big reason why we're considered the Leading Bank for Business1.
1Comerica ranks first nationally among the top 25 U.S. financial holding companies, based on commercial and industrial loans outstanding as a percentage of assets, as of June 30, 2018. Data provided by S&P Global Market Intelligence.
This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.