Servitization : Unlocking Efficiency for a Sustainable Economy

At the recent Building Bridges Conference, an insightful session including Bertrand Piccard of the Solar Impulse Foundation, Elina Roine of the European Investment Bank (EIB) and Yannick Heinrich from the Servetia Initiative shed light on the transformative potential of servitization models and innovative financing for driving the transition to a low-carbon economy. This exchange underscored the importance of aligning interests, overcoming financial barriers, and scaling solutions that deliver both environmental and economic benefits.

Servitization: A New Paradigm for Efficiency

Servitization, a key focus of Servetia – an initiative led by BASE Foundation and E4S with the support of the Fondation Valery – offers a fundamental shift from traditional business models. Providers no longer sell products but deliver outcomes as a service, maintaining ownership and ensuring performance throughout the lifecycle. This approach promotes:

• Resource Efficiency: By incentivising providers to achieve better outcomes with fewer resources, servitization reduces waste and emissions over a product’s lifecycle.
• Customer-Centric Solutions: Customers benefit from access to services (heating, cooling, mobility, etc.) without the ownership burdens, benefitting from optimized, hassle-free solutions that are maintained and monitored by the providers.

As Yannick Heinrich emphasized, servitization aligns incentives across stakeholders, fostering long-term relationships, stable revenue streams for providers, and cost-effective, sustainable solutions for users. By addressing financial and operational barriers, servitization is emerging as a key enabler for the transition to a low-carbon economy.

Financial Innovation: Breaking Down Barriers

Despite its clear benefits, servitization still faces challenges such as technological complexity, perceived investment risks, and financing hurdles—particularly for small and medium-sized enterprises (SMEs).

Elina Roine outlined how the EIB is addressing these challenges through innovative financial models:

• Blended Finance: Combining public and private capital to de-risk investments in emerging energy technologies and business models.
• Specialized Credit Lines: Offering tailored financing to help SMEs adopt energy-efficient solutions.
• Simplified Access: Developing instruments that make financing more accessible and less complex for smaller firms.

These efforts are part of the EIB’s broader commitment to support the European Green Deal, with targets to ensure 50% of financing is dedicated to green projects and to mobilize €1 trillion in green investments by 2030.

Servitization in Action: Scaling Sustainable Solutions

Bertrand Piccard emphasized that servitization, backed by innovative financing, has the potential to significantly scale the adoption of efficiency solutions. He envisions a future where a multitude of innovative solution providers deploy their energy-efficient technologies at no upfront cost for end-users. Customers, in turn, benefit from retrofits and upgrades that improve the efficiency and sustainability of their facilities while solution providers retain ownership, ensuring maintenance and long-term performance.

The Servetia Initiative exemplifies this approach. Servetia is developing scalable servitization models that bridge the gap between solution providers, customers, and financiers. By facilitating “pay-for-performance” arrangements and leveraging blended finance, Servetia aims to democratize access to energy efficiency.

The Path Forward: Collaborative Ecosystems

For servitization to reach its full potential, it requires a supportive ecosystem where:

• Regulators create enabling policies and frameworks.
• Investors provide capital and innovative financing structures.
• Solution Providers deliver optimized, efficient services.
• Customers are willing to commit to this innovative business model.

At E4S, we believe that initiatives like Servetia can lead the way in aligning profitability with sustainability, driving a more resilient and efficient economy.

To learn more about the Servetia initiative and how it is driving servitization forward, visit servetia-initiative.ch.