With no less than 32% of customers now feeling that sustainability is as important as price in their decision making process, an environmentally conscious customer communications management (CCM) operation is more important than ever – in house and throughout the supply chain.
But how should you approach sustainability when you are sending out hundreds or thousands of customer communications a day? Should you just digitise everything?
Sustainability has often been discussed in terms of reducing paper, and digitising all communications regardless of the needs of the customer. However, technological advancement without consideration can be just as if not more harmful to the environment as paper waste.
In this article we will explore how to achieve sustainability goals, including Net Zero and Scope 3 emissions objectives, by minimising communications to what is needed (and wanted) by customers. Some services, such as a digital mailroom or hybrid mail systems, can help optimise paper communications by blending digital and physical formats.
The good news is you can improve customer experience, reduce costs and be sustainable all at the same time.
The impact from wasteful paper usage is well known, while the carbon footprint of digital communications is becoming better known each day. Overproduction of paper due to inefficient inbound and outbound postal operations and the ever increasing energy consumption from data centres and non-recyclable e-waste all contribute to greenhouse gas emissions. Plus, outsourcing aspects of the customer journey to communication management suppliers means taking into account their own emissions.
Customers expect financial services firms to provide clear, relevant and timely information; but there needs to be a careful balance between environmental impacts and customer expectations. Here are some of the considerations financial services providers should be aware of to help ensure a sustainable supply chain for customer communications.
The spirit behind the switch to paperless is admirable, but the message has been corrupted. While overuse of paper does cause deforestation, it is also a renewable resource that can contribute to healthy forests if produced responsibly. As research from the Anti-Greenwash Campaign by Two Sides finds, a warning to all businesses is not to promote themselves as sustainable because they are reducing paper or emissions by going digital, as consumers are becoming aware that the truth is not so simple.
The trick is to only source paper from suppliers who are part of the Forest Stewardship Council and licensed by the Programme for the Endorsement of Forest Certification, or to only engage CCM vendors who also have these certifications. It’s because of these initiatives, supported by the print and paper industry, that European forests, which provide the industry more than 90% of their wood fibre, have been growing by an area equivalent to 1,500 football pitches every day.
There are other impacts to consider. For example, paper does require a lot of water to produce each sheet. It’s important to see it as a valuable resource, and not to waste it.
Aside from telephone communications – which can cost up to £10 per call into a contact centre, so is not a feasible option – the only other option is digital communications. These are quick and efficient, but have a hidden cost to the environment that is not immediately obvious. Emails, SMS and other digital communications require electricity, which is often powered by fossil fuels. And because electronic equipment is difficult to recycle, it causes large amounts of e-waste in landfill, driving the need to mine for rare earths.
Each text-only email produces around 4 grams of CO2, calculated by the electricity used to run computers, servers, routers and data centres. This is because data centres need a lot of electricity to run. From 2013 to 2019, digital communications’ share of greenhouse gas emissions rose from 2.5% to 3.7% of global emissions.
Using third parties for customer communications management adds a whole risk of impacts to the value chain, from waste water to single-use plastics. If you are working hard to limit your Scope 1 and 2 emissions, but your suppliers are not, they are included in your Scope 3 emissions.And if they have poor ESG policies
Managing Scope 3 emissions – indirect emissions generated through the value chain – is critical to achieving net zero. While Scope 1 and 2 – direct emissions from owned or controlled sources and indirect emissions from the generation of purchased energy – are relatively under the control of the business, Scope 3 can quickly run out of control if the supply chain is not transparent and made up of accountable providers.
Firms that want to achieve sustainability goals can engage with suppliers to identify opportunities for emission reductions, as well as invest in technologies to track and report on these emissions.
We discussed the themes from this article at our conference on 21 November 2023. Insights from the event Small Steps to Transformational Change.
So, if every form of communication available is potentially impacting the environment and your sustainability goals, what should you do?
The answer is to communicate when it is necessary, using the right channel at the right time and how the customer prefers it. Here are our strategies for maintaining the customer experience in an environmentally sustainable way, including adopting a multichannel strategy, optimising customer journeys and offering channel choice.
The goal of any journey is to complete a transaction or enquiry in as few interactions as possible, without errors. Looking critically at every customer journey, mapping them out to understand where your touchpoints are inefficient and causing pain to the customer can do wonders for cost savings, customer experience and sustainability scores.
Sending customers communications on channels they do not respond well to increases the likelihood they will be ignored, that responses will have errors or that they will call into the contact centre, increasing customer journey times, costing you money and damaging their experience. Remediation requires even more communications, which impacts the environment, whether paper or digital.
Getting it right the first time, by understanding customers’ channel choice, can have huge improvements to a company’s environmental impact. Employing a multichannel strategy is key.
The digitisation of paper forms plays a crucial role in improving customer experience, as it streamlines information gathering and reduces the environmental footprint of institutions. Digital solutions allow for secure and efficient data collection and management, making it easier for businesses to stay compliant with industry regulations and sustainability goals at the same time.
Investment in innovative technologies such as machine learning, natural language processing and automation can also facilitate personalisation. These technologies enable financial service providers to understand their clients' preferences and anticipate their needs, leading to increased satisfaction and loyalty.
Together with the implementation of multichannel communications and the digitisation of paper forms, institutions can ensure a sustainable supply chain and build lasting relationships with their clients.
Communicating with the customer is good practice not just for their experience, but also for sustainability objectives. Having siloed departments with different customer databases often leads to duplicated messages, which cost money, cause surplus emissions and harm the customer experience.
Avoiding overproduction of customer communications requires departments to collaborate. When every department works closely with other departments within the company (as well as external partners) they can ensure that all stakeholders are aligned and working towards the same goals. But they can also make sure the customer feels like they are communicating with a single entity and not being bombarded by splintered departments.
For the long-term sustainability of a sustainable strategy, customer communications operations, whether in house or via third party suppliers, must be about continuous improvement. Always looking for ways to improve processes and reduce environmental footprint. This includes optimising paper usage and delivery routes, while ensuring where possible, paper producers and CCM suppliers are using renewable energy sources.
The role of hybrid and digital mailrooms has become crucial to ensuring a sustainable supply chain in financial services customer communications. With an increasing number of organisations adapting to remote work and digital processes, some CCM solutions have grown in both popularity and necessity.
Hybrid mail is an ideal solution for companies wanting to optimise customer journeys and offer channel choice, to minimise wasted communications.
This is a service that combines the best of both physical and digital mail, enabling organisations to send and receive mail in a more efficient and sustainable manner. By incorporating both paper and electronic formats, hybrid mail can help financial services organisations reduce their environmental impact and maintain a more streamlined communication process with their customers.
Besides reducing postage costs by making use of electronic formats, this solution also streamlines processes and eliminates the need for physical storage spaces, which can be a significant expense for financial services organisations.
In addition, hybrid mail printing facilities are designed to be energy-efficient, using the latest technology to reduce energy consumption. This results in lower greenhouse gas emissions and a smaller environmental footprint.
A digital mailroom is a system that digitises incoming mail, capturing and routing documents to relevant recipients and business workflows. This enables organisations to better manage their documents, reduce paper waste and automate time-consuming manual processes that can be more susceptible to errors and delays.
It’s an efficient use of resources. A digital mailroom streamlines the process of handling and distributing mail, reducing the amount of time and resources required. A more efficient use of resources and a smaller environmental footprint.
Both hybrid mail and digital mailroom contribute to the sustainable and eco-friendly image of a financial services organisation. By adopting practices that reduce paper consumption, organisations can showcase their commitment towards environmental responsibility and sustainability.
For financial institutions sending and receiving high volumes of communications per day, it can help to turn to third party CCM suppliers. They can help boost operational efficiencies and sustainable practices by implementing tactical digital transformation projects. The company can use their savings to focus on providing an excellent customer experience. But not all suppliers are the same.
Waste disposal: The rapid adoption and continuous upgrading of technology can lead to challenges, such as increased e-waste. E-waste consists of discarded electronic devices and components that can have negative consequences for our environment and health.
Proper disposal and recycling of e-waste should be a priority for businesses in the financial services industry. Partnering with responsible e-waste management companies, establishing efficient disposal processes, and raising awareness among staff are essential steps to address this issue.
Responsible paper sourcing and usage: We mentioned earlier that there are certifications to indicate responsible paper producers and forest management. Responsible CCM suppliers will be certified by the Forest Stewardship Council and the Programme for the Endorsement of Forest Certification.
Managing digital emissions: Data centres require massive amounts of energy and resources to run while paper can harm the environment if not sourced or used sustainably.
Implementing sustainable strategies in technology management is crucial to mitigate these environmental impacts. For instance, digital mailroom services can help organisations reduce intra-departmental paper usage, reducing their carbon footprint and physical waste generation.
Cloud-based platforms and Internet of Things (IoT) technologies can also help improve the measurement and tracking of environmental and social impacts across supply chains. By implementing these technologies, companies can efficiently monitor their environmental performance and take actions to reduce their GHG emissions and other negative impacts.
Both the CDP supplier programme and EcoVadis aim to ensure a sustainable supply chain by helping companies identify and manage climate, water and forest risks. By participating in these programmes, financial services companies and their suppliers can benefit from valuable insights into the environmental impact of their customer communication processes.
The CDP supplier programme focuses on engaging suppliers and collecting essential information about their sustainability performance, allowing companies to assess and improve their supply chain's resilience. CDP encourages suppliers to disclose data on their climate, water, and forest risks, ensuring transparency and fostering collaboration between purchasers and suppliers to achieve common sustainability targets.
EcoVadis, on the other hand, offers a comprehensive rating system that evaluates suppliers based on their corporate social responsibility and sustainability performance. With a broad scope covering a wide range of factors, including governance, environment, labour rights, and ethics, EcoVadis helps businesses confidently manage value chain risk, compliance, and performance for net-zero and sustainability targets.
Implementing practices recommended by these programmes is essential to ensure the chain of custody remains accountable in customer communications supply chains. This includes understanding and actively managing the environmental impact of production, distribution, and disposal of materials used in customer communication processes.
At Adare SEC, we are aware of the impact our service could have on the environment, which is why we keep our ESG policies up to date. We’ve committed to climate friendly initiatives such as EcoVadis criteria and the UN’s Race to Zero using Science Based Targets to reduce our Scope 1 & 2 emissions by 46% by 2030. See more on our ESG policies here.
The Adare SEC timeline of environmental initiatives and targets
In the evolving world of financial services, businesses need to focus on incorporating environmental sustainability into their customer communication strategies. By doing so, they contribute to a cleaner and greener future while maintaining a strong brand perception and competitive advantage.
The key to sustainable customer communications is to partner with suppliers that have robust ESG policies. Suppliers who are members of programmes like EcoVadis and CDP demonstrate their commitment to preserving the environment and ensuring ethical supply chain operations. These suppliers are more likely to adhere to sustainable practices, reducing the overall environmental impact of customer communications.
