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Is Going Paperless Penniless for Corporations?

When it comes to going paperless, most companies say that it is more environmentally friendly, not to mention more efficient. After, by paying utility bills on line, for example, corporations can avoid sending out an invoice while allowing customers to wire funds — through their bank — to the company seeking payment.

Businesses will do what their customers want while also trying to reduce expenses. But is going paperless contrary to a business model or is it in line with the message the company hopes to send? This may, in fact, be a generational issue as older customers may prefer to stick with what they know best while the younger ones may like the convenience — and eco-benefits — of paying on line.

On the issue of cost per se, companies can save money by sending out electronic bills — as long as sending out paper bills remains an option to avoid losing the more traditional customers. But there remains a risk, as such companies as Target and Equifax have learned — that getting hacked is bad for business, and worse than the benefits of being perceived as environmentally friendly.

For that reason and more, the notion of going paperless is under challenge by the companies that produce pulp and paper — about 244 of them all and many from the Fortune 100, and one calling themselves Two Sides. Their message is not of the feel-good variety and one that gives customers the false impression that they are doing right by the environment. Rather, they say, it is a science-based argument that goes something like this:

Take the point about “saving trees,” which the group says is a “false” narrative. In other words, just because trees are not cut down down to make paper does not mean that they are preserved. Stated differently, if those trees are not used to make paper, Two Sides says, then the land is often sold off and the trees are cut down to produce agriculture or to create real estate development — never to be replanted again.

The volume of trees on US timberland, it says, is growing by 22,000 tennis courts per day because of sustainable forestry practices.

“When it comes to billing, consumer choice should not be a casualty of the digital revolution,” Phil Riebel, president of Two Sides said. “The American public has spoken, and billing companies that don’t listen risk losing business.  Those who continue to use unsubstantiated environmental claims as a smokescreen for reducing costs also risk greater scrutiny by the U.S. Federal Trade Commission (FTC).”

The FTC prohibits false claims about the environmental benefits of paperless billing. Simply, it wants to make sure companies can substantiate their claims.

“We fully understand the advantages of electronic billing,” Riebel added.  “We just want companies to stop misleading consumers by using vague and unsubstantiated environmental claims and to continue offering no-cost paper options to people who say they want and need them.”

Two sides surveyed 2,000 customers and said that 6 in 10 of them preferred vendors who offer real billing — not paperless billing.

But the Environmental Paper Network says that the goal here is to review the entire product cycle — not just the one dimensional aspect of cutting down trees to make paper. Indeed, reducing the amount of paper also means cutting down on ink and postage, as well as disposal of the waste. At the same time, it eliminates the possibility of paper theft, although it does not eliminate the risk of being hacked on the Internet.

Nevertheless, the group says that companies must back up their claims — not just with hifalutin statements but with specific facts — things that can quantified: If a certain number of customers switched to paperless billing, it would save a specific amount of paper and a defined number of trees. It points to the papercalculator.org as a means to add it all up.

The Paper Calculator is supported by the Environmental Paper Network’s 140 not-for-profit organizations and it is peer reviewed. The Paper Calculator is based on an extensive study, report and life cycle assessment completed by the Paper Task Force. Among the participants are Duke University and the Environmental Defense Fund, with such for-profit companies as Johnson & Johnson and McDonald’s also taking part.

“The FTC has brought action in recent years related to deceptive claims related to product biodegradability, bamboo content, and environmental certification claims as part of its overall effort to ensure that environmental marketing is truthful and substantiated,” says Kim Porter of the Environmental Paper Network.

“To date,” she adds, “there has never been an enforcement action by the FTC related to paperless assertions, and there is no indication that the FTC’s concerns extend to companies stating that source reduction due to paper use efficiency has specific positive environmental impacts.”

But the group emphasizes that companies should use their paper calculator before making any arbitrary claims. Doing so can avoid getting called out and in effect, negating the very message they had hoped to send — that going paperless is good for the environment as well as the bottom line. 

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