In an era characterized by higher interest rates, shifting and uneven regulatory policy, and tighter budgets, some ELFA member companies have found a surprising area of potential: sustainability. Even as regulatory environments shift in some regions, many companies globally remain steadfast in their efforts to reduce their carbon footprint and do business in more sustainable ways.
According to PwC’s 2025 State of Decarbonization Report, fully 84% of companies are standing by their climate commitments and, within that group, 37% are increasing those goals. Rather than a series of green policies adopted by companies, sustainability is increasingly embedded in the core of mainstream product portfolios and in the ways equipment leasing and finance companies have structured their businesses.
A Sustainable Opportunity
When an organization partners with DLL to finance the assets it needs, it’s likely the deal is not a one-and-done transaction. The global asset finance company is clear about its business goal to drive sustainable growth while actively working to reduce greenhouse gas intensity across its portfolio, while also accelerating a circular economy. Circularity is one of DLL’s three key transition areas, along with Food and Energy Transitions, on which the firm is focused.
“It’s about resource efficiency, resource conservation, and resource impact. As a financial services company, we provide models that help guide how these resources are used and preserved.”
—Gaurav Sharma, DLL
For DLL, Circularity is part of a strategy that contributes to its business goals and the development of new, innovative access models which consider both sustainability and risk mitigation. Financing acts as a catalyst for transformation, with DLL supporting its partners and customers in the shift from ownership to access-based models (use, reuse, and regeneration-based models). This involves adopting a resource-centric approach that minimizes waste and maximizes resource utilization by keeping products and materials in use for as long as possible. In addition to financing assets, DLL also supports end-of-agreement management, including reusing, refurbishing, remanufacturing or recycling the equipment.
“We adopt a resource-centric approach to business, which is important to specify,” says Gaurav Sharma, Global Head of Circularity and Lifecycle Asset Management at DLL. “Resources—both technical, like metals and plastics, and biological, like food and wood—are accounted for. It’s about resource efficiency, resource conservation, and resource impact. As a financial services company, we provide models that help guide how these resources are used and preserved.”
ELFA’s 2025 Equipment Finance Industry Predictions noted that a growing focus on sustainability is driving increased demand for solutions that support energy-efficient equipment, renewable energy projects, and advancements in transportation technologies. In addition, some equipment finance providers are moving toward a more circular approach to their operations, not only maximizing the life cycle of the products they finance for the first owner, but also refurbishing and reselling used products to extend their life and extract more value from them. In addition, recycling products to harvest valuable resources from them and reduce their entry into the waste stream are other ways to maximize value and minimize environmental impact.
“...we needed to think about what we're doing for our clients to enable them to do the things that they might need to do [in sustainability reporting].”
—Emily Hammond, Alfa
The demand for sustainable business practices is so strong that it’s even affecting service providers to the industry. Last year, London-based Alfa, which provides SaaS solutions for the global equipment finance industry, released its Alfa Systems 6, which included sustainability as one of its six core pillars. The latest release expands sustainability reporting and allows equipment finance companies to track everything from enhanced product life cycle management services to “everything as a service” (XaaS) models as an approach to asset financing, which lends itself to additional customer offerings and the integration of more circular business practices.
“As we looked at the product, I knew we needed to think about what we're doing for our clients to enable them to do the things that they might need to do [in sustainability reporting],” says Alfa Head of Product Emily Hammond. “These are things they’re talking about at industry events—reporting the clients want to be able to do. So, that’s why it became one of the pillars for Alfa 6.”
Finding (More) Value in Circularity
Cisco was an early entrant into the world of circularity. For more than two decades, Cisco’s Refresh program has been focused on giving technology a second life. Cisco Refresh, a program available in more than 100 countries, takes back used equipment, restores it to like-new condition, and resells it at a fraction of the original cost.
“What started as a financing solution has evolved into a cornerstone of Cisco's circular business model,” says Sam Azzouni, Director of Operations, Cisco Capital, Cisco’s global finance business.
In addition, through its Takeback and Reuse Program, the company lets Cisco equipment owners return hardware that has reached end -of-use, at no cost. Cisco Capital professionally restores some of these products and makes them available through Cisco Refresh. Each remanufactured product undergoes comprehensive testing and certification and includes the same warranty options as new products. They also typically ship quickly, within three to seven days. Azzouni says this process creates a second life for equipment and saves the resources required for new manufacturing and transforming what would have been waste into, “valuable, reliable technology,” he says. Customers enjoy an average 40% cost savings on remanufactured equipment, and the Cisco Circularity Promotion allows partners and distributors to receive discounts up to 75% on certified Cisco Refresh products.
Companies that don’t adopt more sustainable and circular approaches are leaving money on the table, says Allard Pheifer, Global Lead of Sustainability at CHG-Meridian, an independent lessor of IT, healthcare, and material handling equipment. For example, the company’s research found that 60% of IT assets do not always reach their maximum service life, resulting in the loss of significant value.
“Linear models are a ‘take, make waste’ situation,” Pheifer says. “But as soon as you put this in a circular business model—and I'm talking about purchasing models versus operational lease and device as a service—suddenly, because you're going to make sure that it gets a second life, you're going to bring down the carbon footprint. In a smart phone, that’s up to 50% reduction and 30% for laptops and desktops.” The ripple effect may also include a more affordable lease, since the product will deliver value through a second life. Azzouni says when customers choose Cisco Refresh switches or IP phones, then can realize at least a 60% reduction in embodied carbon emissions compared to equivalent new products. And customers who choose Cisco Refresh Wi-Fi 6 Access Points can realize at least a 70% reduction in embodied carbon emissions compared to purchasing equivalent new products.
“What’s also really interesting is that many companies are currently focused on the Science Based Targets initiative, as well as broader net zero goals. And, as we have done the research to calculate the actual carbon saving of leasing versus procurement, you can also determine the average expected reduction by switching to leasing. That means if you have a certain amount of laptops, desktops, and smartphones, you can see on average how much carbon footprint you are going to reduce by moving from a purchasing model to a leasing model, because you know that the lease will harness all possible value out of that device,” Pheifer adds.
Green Business Is Global
While sustainable business practices may be facing new headwinds in certain markets, such as policy and incentive changes related to renewable energy and electric vehicles (EVs) in the U.S., for example, the global appetite remains strong. The European Union has strict sustainability regulations such as the Corporate Sustainability Reporting Directive (CSRD) and ambitious net-zero targets. China has undergone a “green transition” over the past decade and a half and accounted for 40% of global renewable energy capacity last year, according to the World Economic Forum. And Latin American companies are increasingly embracing environmental, social, and governance (ESG) practices, as global sustainability disclosure standards apply pressure, according to a report by management consulting firm RSM.
“What’s also really interesting is that many companies are currently focused on the Science Based Targets initiative, as well as broader net zero goals.”
—Allard Pheifer, CHG-Meridian
One of CHG-Meridian's global remarketing refurbishing centers in Europe.
Part of the drive is the tremendous increase in energy demand, driven by EVs and technological advancements like generative artificial intelligence (gen AI). “In the last 70 years there's been an indirect relationship between GDP growth and how much energy we use. And now that has, in fact, turned into a direct relationship,” says Patricia Voorhees, Chair of the ELFA Climate Finance Working Group (CFWG) and Director, Strategic Consulting and Mergers and Acquisitions of The Alta Group, a firm that advises equipment leasing and finance companies. “The demand for energy is both the headwind and a tailwind, because it is causing bottlenecks, but it is also incenting things like investment in equipment related to data centers and related to power generation and cooling and battery storage.” She adds that investment in managing distributed energy resources (DERs), such as battery storage, is increasingly important to optimize power usage and distribution because of greater energy demand and the need for utilities to add capacity to the grid.
Voorhees says that stakeholder demand is an important factor in sustainability’s momentum. Employees want to work for companies that are mitigating their environmental impact, so sustainability affects talent recruitment and retention. Sustainability is also important to many customers and investors, she adds. “The way that the company is going to market, and how that resonates across the stakeholder base—with employees and customers and community—is very important,” she says.
Business Opportunities in Sustainability
Pheifer says equipment finance companies can provide additional value through circular relationships, helping them manage the life cycle of the product. “This approach addresses a major challenge many large organizations face making full and effective use of their technology investments on a set timeline. Adhering to timelines is the goal of leasing but this is where many companies and lessors fall short,” he says. In addition, when equipment leasing and finance partners take this involved approach, they can also help companies optimize capital while staying technologically current. These multifaceted benefits help build long-term client relationships.
“In the last 70 years there's been an indirect relationship between GDP growth and how much energy we use. And now that has, in fact, turned into a direct relationship.”
—Patricia Voorhees, The Alta Group
Sharma agrees. “The entire value chain—from the manufacturer to the financier, to the user, and the processing company—all must be aligned around a common goal,’ says Sharma. ”If even one stakeholder lags behind or doesn’t prioritize the circularity transition, there’s a risk of creating a missing link in the value chain.”
That makes equipment finance partners critical to managing the challenges of replacing and disposing of equipment, Sharma adds. ”At DLL, we’re exploring areas like the second life of electric vehicle batteries. With the rapid growth in EV adoption, the volume of large batteries reaching end-of-life is increasing,’ he adds. ‘With this solutions-focused approach, equipment lessors play a key role in enabling more circular practices,” he says.
Geopolitical or other external factors affecting the sustainable transition are unlikely to be more than a temporary speed bump. Sharma believes the momentum is strong, driven by what he calls the ‘4 Cs’:
- Customer demand for more sustainable business practices and circular business models
- Climate change, which drives the need to reduce carbon emissions
- Compliance with global regulations and standards
- Cost savings, especially as harvesting materials and parts becomes more economical amid rising resource scarcity
”And there’s a fifth C—competitive differentiation,’ he says. ‘More sustainable business practices help set your business apart,” Sharma says.
“Shifting mindsets away from a linear consumption model is just as important as transforming operations.”
—Sam Azzouni, Cisco Capital
Azzouni echoes that sentiment when describing Cisco’s sustainability strategy, which is focused on meeting the customer needs and underpinned by long-term efforts like net-zero targets and circular economy goals. “Our core sustainability initiatives are built to stand on their own, rooted in our belief that environmental responsibility, business performance, and delivering better outcomes for our customers go hand-in-hand,” he says. He is excited about circularity becoming more widespread. “As interest in circular solutions grow, providing consistent quality, availability, and customer understanding across markets and product lines requires ongoing investment and education. Shifting mindsets away from a linear consumption model is just as important as transforming operations.”
For members seeking new approaches to grow their businesses, sustainability may offer avenues to do it.