November 2021 saw the COP26 take place in Scotland. With it came eye-opening reports exploring how the global population is impacting climate change and what can be done to be more sustainable, that have rightfully taken centre stage. One of these reports, commissioned by Oxfam, tracked the carbon footprint of the world’s richest 10% (anyone who earns over £41,000 annually). They found that this 10% emitted over 23 tonnes of carbon energy every year, 10 times more than the recommended 2.3 tonnes.
To decrease an individual’s carbon footprint, their place of work must take action. Those in the top 10% will find that a lot of their emissions will come from their work. Emissions in businesses can be generated from energy, gas & water, business trips or even general day to day organisational requirements, e.g. paperwork.
During the global pandemic, after lockdown, every process was brought online and paperwork rapidly became a thing of the past. This impacted the finance departments more than most, having been the sector of businesses that required the most paperwork to gather and handle expenses. Yet, going paperless is now key for the future if businesses aim to make an impact and go sustainable.
Sustainability as good practice
Individuals themselves are looking to be more sustainable and decrease their carbon footprint. To do this, they are now aligning themselves with companies that match their values. This means that companies that showcase their sustainable practices are more likely to attract customers and recruit employees who are environmentally aware.
In the past, executives have been guilty of assuming that sustainable business practices cost money and by extension reduce company performance, but academic research calls that view into question.
In fact, a recent McKinsey report highlighted five ways that sustainability can actually drive added value, by;
- Reducing costs – through lower use of resources such as water and power
- Growing the top line – by attracting new customers who are environmentally conscious
- Reducing regulatory fines – and attracting government grants
- Greater productivity – improving employee morale and attracting talent
- Asset optimization – using assets more effectively and increasing their life
Research has shown that 80% of companies practising sustainability have seen an increase in value and 90% experience a lower cost of capital.
The first step to a sustainable finance department
The first step in making your finance department sustainable is to adopt a sustainability mindset. Although much of the noise around sustainability focuses on big initiatives, actually small changes can really help too. One of these changes is going paperless.
Paperless business is a sound and important environmental practice, but it also contributes to better, more efficient finance operations. Reducing the use of paper saves trees and conserves energy used in converting those trees into paper and in transporting paper products. By going paperless, consumers are suddenly able to cut out an entire supply chain that would otherwise have impacted an entire business’s carbon footprint. Going paperless also means becoming digitised. This allows finance departments real-time financial visibility to increase efficiency to more accurate forecasting and planning. In short, paperless means less manual work and more overview & data.
Yet today, employees use 10,000 sheets of paper each year, producing 35% of a company’s waste stream and additional operating costs. Therefore, a finance department can’t just go paperless and not have a viable backup solution to help continue day to day operations. This is where innovative technology like expense management tools can play a big part in decreasing the finance department’s carbon footprint, reducing the need for physical receipts and creating a chain reaction of decreased carbon emissions for the business as a whole and the individuals that work there.
However, for many industries, it’s impossible to retire paper use completely. By eliminating its use for non-essential documents, an organisation can save a substantial amount for costs associated with paper, ink, printers, fax machines, copiers and more. It can also lower the use of filing cabinets and reduce the time employees commit to finding documents in a brick-and-mortar filing system. To determine the areas that should and shouldn’t go paperless, finance departments must take a good look at existing processes and see where time is being spent most and where a lot of paper is still in use. Then they can look at examples from other companies as well as tools that are easy to implement and intuitive to use – that will save them the most time.
A key example of this is expense management with employees, by receiving receipts from employees, photocopying and filing these to process the expenses, and then generating expense reports. This process takes up a lot of paper as well as time and effort. Instead companies can use automated expense management applications to streamline the process and cut out the use of paper.
Overall, by going paperless, even if not all the way, a business is able to cut out a substantial part of its carbon footprint, for their employees. They are also able to become more transparent with their consumers, aligning themselves to the more modern values of sustainability, enabling for a greater connection between not only consumers, but their employees as well. Through paperless processes, employees are able to work anywhere, anytime, easier, all without losing control and overview of their work. Financial departments are able to move away from manual tasks, work more productively and be more strategic whilst maintaining sustainability.
