Thought Leadership

New climate change targets add to the growing list of reasons to move away from paper reports

Wealth management firms have started to realise the benefits of digital communication as efficiency and service gains align with reductions in the use of paper.


espite the ongoing pressure of the pandemic, there is another issue that cannot be ignored: the climate crisis. World leaders are setting out their commitments to reducing carbon emissions ahead of the COP26 meeting in Glasgow in November and future action is expected to follow the event. The US and EU have both set targets to reduce carbon emissions by more than half by the end of the decade. The UK government has raised previous targets and announced a 78% cut in carbon emissions by 2035. All this activity suggests that there will be a sustained focus on carbon emissions that will inevitably impact all businesses.

Alongside an increase in the use of greener alternatives such as electric cars, low-carbon heating and cutting down on international travel, meat and dairy, a surge in investments in green industry, such as renewable energy is needed. The Climate Change Committee (CCC) estimates the scaling of low carbon investment to £50bn, or around 1% of GDP is needed. This is good news for wealth management firms that are looking to expand ESG portfolios for clients – but do wealth management firms practice what they preach when it comes to the environment?

Finding life after paper

Many organisations have already adapted to more digital working because of the pandemic. The question now is whether they will seize the day and embrace digitalisation in the long term. There are compelling reasons to do so. Customer research by Device Magic in 2018 showed that digital forms completed by customers have 50% fewer errors than paper forms, signalling efficiency gains from improved data accuracy. In addition to quantitative efficiency measures, a switch to greener, digital communication can have a positive impact on the firm’s brand and image in the market. A study of the Impact of Green Banking Initiatives on Customer Satisfaction by Herath and Herath (IOSR JBM 2019) showed that “green initiatives in financial services are correlated with improved perception of security and trust, ease of use, value creation, and overall customer satisfaction.” All this suggests that the benefits of digitalisation as part of green initiatives have a broad and positive impact.

The future of aviation is strictly tied to several factors

Does a reduction in paper really make an impact on climate change targets?

While there are pressing issues such as frequent air travel and heavy industry that contribute to climate change, a reliance in paper is bad for the environment. 40% of wood harvested for industrial purposes is used to produce paper and it takes as much as 10 litres of water to produce one sheet of A4 paper. Wealth management firms often cite security as a reason for printed communications but there is little security in a format that can be lost or discarded – and an EPA Factsheet from 2014 highlighted that paper accounts for over a quarter of total landfill waste.

Digitalisation is the solution for firms looking to reduce their paper consumption. A report from the International Energy Agency (IEA) in 2018 showed that digitalisation in businesses helped produce annual drops in paper consumption of 2.4% from 2010-17 and 3.9% in 2018. This is good news for organisations looking to reduce their carbon footprint. It is not simply be about appealing to the growing number of investors with environmental priorities or responding to client demand for more convenient digital services. Consultations continue regarding a carbon tax for businesses and a recent poll of 2,000 people by Opinium showed that two thirds of respondents were in favour, and 65% of those taking part in the survey commissioned by the Zero Carbon Campaign were in favour of a “green recovery” from the pandemic, suggesting there is no going back to the old way of working and that to do so could come at an high cost.

Counting the cost of paper processes

It’s not just the possibility of a taxable carbon footprint that means that paper processes incur a high cost for wealth management firms. The true cost of paper reports, for example, include paper and postage, administration time, printing, scanning and uploading to back office systems and the storage and management costs. In addition, there are the reputational costs that paper can cause through communication delays, security breaches and issues with data integrity. The solution is to move to digital-first processes that rethink the customer journey to make all interactions more convenient for clients, more efficient for the organisation – and considerably greener, to everyone’s benefit.

Digitalisation means greener, more convenient and more efficient services

It’s important to note that digital-first processes don’t exclude the use of paper reporting and communication for those clients that prefer it. However, this approach does create efficiencies across the organisation that extend to clients and the environment. Paring down the use of paper to the bare minimum will reduce costs, boost client loyalty, build brand equity and create new efficiencies within the organisation – all while helping to provide some much-needed action on climate change.


CREALOGIX is a publicly-listed, global leader in fintech and has been working with some of the world’s leading banks and wealth management firms for 25 years. CREALOGIX helps financial organisations to deliver outstanding, intuitive client service online in a way that is seamlessly integrated with existing high-value, in-person services. The front-end client portal technology can be deployed rapidly to provide an enhanced digital experience for clients that deliver considerable efficiency gains and cost reductions across the organisation.

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