Sustainability was defined by United Nation World Commission on Environment and Development as – “Sustainable is meeting the needs of the present generation without compromising the ability of future generations to meet their own needs”. The main practice of sustainability is to support the environment and humans in a way that will help prevent natural resources from being limited, and will help to reinforce them to be kept and used in an efficient manner, to reach the intergenerational equity.
Natural resources like water and food are used daily as they are our basic needs. The idea of sustainability is to consume our needs, but at the same time replace them with the same rate of usage. For example planting a tree for every tree that is cut-off for paper production. If we do not plant another tree as a replacement, forests will start disappearing. An excessive consumption of natural resources and other environmental factors like climate change, pollution, and plastic consumption will lead to extinction and limiting these resources for future generations. The replacement rate is what makes the difference to keep the resources available and sustainable.
In simple words, sustainability is about understanding how all the resources with our consumption are connected, and how can we replace and properly use these resources to preserve them from becoming extinct. Sustainability is a concept that commonly includes three elements which are: Environmental, Social and Governance (ESG). These elements are all connected and the upcoming generations need to perform a systematic thinking between all three.
Banking and Sustainability
Businesses are taking the path nowadays to be sustainable in their operations. The article is focused on how can banking be sustainable by reducing or eliminating use of paper in daily transactions, both by employees as well as by customers.
Just imagine, it takes 24 tree to produce 1 ton of paper (about 200,000 sheets of paper) and the annual global consumption of paper stands at 422 million metric tonnes. It is a no-brainer how many trees we need to cut every year to meet this mammoth paper consumption. And if you thought losing trees and deforestation is the only problem, consider this as well – production of 1 rim of A4 paper needs 10 litres of water. The immense depletion of natural resources is also a matter of great concern.
Digitalization is sweeping the world; with the evolution of technology, our documents are accessible in our hands anywhere at any time. Phones, tablets, laptops, clouds, and emails are all elements that can hold our files safely and use it whenever needed. People nowadays are being more aware about pollution and analyzing the connection between every product and the natural resources used to produce it. This way of thinking will impact on the mindsets and will encourage people to adopt the change. Therefore, people will start to act in favor of being sustainable and more conscious about the planet.
Banking can contribute in several ways in being paperless, specially that the business sector is number one in consuming papers. Employees use papers between for their inter-departmental communication and use signed documents from the clients to process and store. While customers consume papers for their transactions such as opening account/loans/time deposits forms, cheques, deposit and withdrawal slips, receipts, statements, and letters, etc.
The usage of papers decreased with the Covid-19 pandemic; digitalization was the key of success for every business who had to cope-up with the sudden change to survive in the market. The pandemic raised an awareness and made people shift to use the technology much more in a short period of time.
For business and employees, having recycled boxes in each department to discard the papers will help to reuse or recycle papers in an efficient way. Also, trying to have files on computers and using emails to communicate between employees and departments, as well as using electronic signatures and stamps on files instead of printing and sending, will decrease the usage of papers. Paper should not be used unless there is an urgent need of printing. Buying and using recycled papers or papers, that are made with the management of sustainable forests, will be a good option to go for.
The usage of cash decreased with the Covid-19 and banks were forced to start acting fast to improve their online applications and websites, as well as developing them to be more sufficient, convenient and user friendly for their clients to use, irrespective of their age and cultural background, from anywhere in the world. ATMs started to give clients the option to go green and receive an SMS on their phones instead of printing a receipt. Financial technology helped in transmitting transactions, either locally or internationally. Opening accounts with digitization is only 5 steps away that requires just entering information, taking pictures of IDs, an electronic signature, and clicking a button to complete the process paperless.
Statements also can be downloaded in a PDF file on the phone at anytime and anywhere, in addition to the option from the bank for the statement to be sent by email. The use of RFID in debit and credit cards reduced the use of cash and the need for a receipt because the client will receive an SMS on their phone.
It’s the technology and digitalization era, everything is a click away and everything is possible in today’s world. Using emails and technology is more sufficient, effective, and sustainable for our environment. Files are easier to store, easier to find, and it’s saving the world.
Let’s take advantage of living in a digitalized world and use it to reach intergenerational equity.
About the Author
Khawla Khaled Ahmed is an Investment and Wealth Management Specialist, working with the National Bank of Bahrain. She is also pursuing her Master’s in Business Administration from Royal University for Women, Bahrain.