Ever wondered what the carbon footprint of the humble
cheque is? Michael Chambers, managing director of Bacs
Payment Schemes Limited (Bacs) – the not-for-profit banking
industry body behind the UK’s leading automated payment
methods – has, and in this exclusive article for Eco Executive,
reveals why paying your bills automatically can have a positive
environmental effect.
B
usinesses in Great Britain have been using automated payment
methods like Bacs Direct Credit and Direct Debit for four
decades. And for many companies – large and small – the
financial benefits of paying this way for a variety of commitments like
business rates, staff wages and leasing arrangements, have always
been clear: improved cash flow, greater convenience, reduced
administration, bills paid on time and improved supplier relations.
As a family man, I’ve always believed in doing the best for the
environment and educating my children about the importance of
recycling and looking after the planet. We’ve undertaken a green audit
at home, looking at what comes into and out of the house and we
regularly set challenges for the children to take part in to ensure they
understand the importance of buying sensibly as well as reducing,
reusing and recycling as many household items as possible.
Thinking about what I do at home, I was interested to see how this
could carry over into my working life. One of the ways in which we have
encouraged change at Bacs is to suggest that each employee give
up their individual waste bin. Many were happy to co-operate and we
now have just three central bins in our London office for plastic, glass
and paper, which really makes each individual employee think about
the rubbish they generate during the day and how we’ll dispose of it.
It is a small change if looked at on an individual company basis, but if
adopted more widely it could make a significant difference.
This is just one example of an initiative we have within our own
offices but, looking more widely at automated payments in general,
we can identify a broader opportunity to positively impact on carbon
emissions and the environment.
For 40 years, Bacs has been at the heart of the nation’s payments
industry maintaining the integrity of automated payment methods like
Direct Debit, which have now become an integral part of everyday life
in Great Britain, both at an individual and a commercial level. To put this
in perspective, last year Bacs processed 5.5 billion payments; many
of these were Direct Debit transactions (75 per cent of GB adults now
have at least one Direct Debit commitment) and the remainder were
Bacs Direct Credit payments – 90 per cent of the UK’s workforce is
paid by Bacs Direct Credit – a statistic which equates to four million
weekly wages and nearly 25 million salaries a month.
Looking at the options available to businesses, we believed that
automated payments represent a more environmentally responsible
choice for regular commitments. It was because of this belief that we
initiated a project to look at the carbon footprint of the payments we
clear and settle for the banking industry. The primary aim being to
identify how our automated transactions compare to more traditional
payment methods on an environmental level, in this instance
cheques.
Working with Carbon Footprint Limited we looked at the primary and
secondary footprint of a Direct Debit to help us put a figure on what
we believed was already the environmentally friendly option. The
primary footprint is a measure of direct CO2 emissions that result
from the burning of fossil fuels, and the secondary covers indirect
emissions from the whole lifecycle of products we use and elements
of their creation, manufacture and eventual disposal.
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