Paper usage worldwide has skyrocketed recently and is up 400% in the last 40 years, with Americans consuming the most paper per capita in the world. And while a single piece of paper, or even a few sheets of paper to sign a contract or application, seems like a relatively insignificant amount, that paper adds up over time.
Paper production and consumption have a significant negative impact on the environment that is growing at an alarming rate. The financial services industry is notorious for producing huge amounts of paper documents, meaning that the industry also has a huge opportunity to make a positive impact by going paperless.
Many environmental experts all agree — one of the best things companies can do to lower their carbon footprint is to go paperless.
The Importance of Going Paperless
The amount of paper created and used worldwide has been a growing issue for years and shows no signs of slowing down. Global production of paper and cardboard amounted to 420,000,000 tons in 2021, or the equivalent of every person on earth using two pieces of paper every hour.
In the financial services industry, that number is even higher. In 2017 alone, financial services companies sent 5.2 billion paper documents to their clients. That’s the equivalent of 2.4 million trees. And demand for global paper production is expected to double between 2005 and 2030. But it’s not just the amount of paper produced that hurts the environment; it’s how that paper is made.
Producing 2.3 pounds of paper requires two to three times its weight in trees. Aside from the sheer volume of trees, paper production also includes manufacturing and transportation emissions, water consumption, and even the cost and pollution from recycling. Environmentalists agree that paper production and usage will soon reach a global fever pitch unless individuals and companies act soon.
How Going Paperless Lowers Your Carbon Footprint
Although just 38% of advisors in the U.S. say they measure their firm’s carbon footprint — the least amount of any country — U.S. firms are also more likely than any other country to say they have plans to become carbon-neutral.
Greenhouse gas emissions can seem like a more extensive global problem than just the efforts of a single firm. But even small acts make a difference. The average tree can produce 17 reams of paper and takes 100 years to grow. Transforming that single tree into paper results in around 110 pounds of CO2 being released into the atmosphere.
Not turning trees into paper leaves more trees in the environment to absorb harmful CO2 gasses. The average tree absorbs around a ton of CO2 in its lifetime, meaning that going paperless not only prevents greenhouse emissions from being created in the first place but actually helps reduce greenhouse gasses from other companies’ paper consumption.
One study found that processing invoices digitally caused a firm to decrease its greenhouse gas emissions by 63% per transaction. When considering the complexity of financial transactions and the amount of paper involved, the impact for wealth management firms could be even greater. The widespread consensus from experts is that going paperless can significantly reduce a firm’s carbon footprint and positively impact the environment.
Steps to Becoming Paperless
In the quest to become paperless, even small actions can have an enormous impact. For example, reducing even one set of forms per transaction becomes significant when multiplied by the number of clients and transactions firms see every year.
Moving to an integrated document management system like Docupace creates a central location for all paperless forms, making it easy to store, secure, and access the proper documents. The cloud-based system streamlines an organization and ensures all documentation complies with SEC and FINRA regulations. Aside from significantly lowering a firm’s carbon footprint, going paperless also reduces operating and storage costs, makes operations more efficient, and improves collaboration and client service.
Financial services firms have a responsibility to lower their carbon footprints and make positive environmental choices. The best way to make a difference is by going paperless and helping the environment, one ream of paper at a time.
