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Niclas Rydell, director, Product Certification, TCO Development

Niclas Rydell
Niclas Rydell

It is no secret that the current economic system, characterised by the fundamental need to secure continuous growth, is the overarching contributor to accelerated environmental decline. As resource-hungry economies continue to expand with greater production and consumption, the planet takes the brunt of the impact.

Add to this the current drive in austerity measures, sustainability initiatives are pushed down the agenda, with businesses often citing cost as a reason. The focus tends to be on the short term –remediation of the financial problem, and in turn environmental sustainability is ignored.

This, however, is a missed opportunity. Now more than ever, public trust in banks and financial institutions are quite possibly at their lowest ever. As HSBC’s CEO of UK and Europe Antonio Simoes noted earlier this year, inherent issues in the global banking model are likely to be fixed by 2020, but customers’ faith in banks is unlikely to be restored for a generation.

Reputation plays a fundamental role in today’s competitive environment, and customers only want to buy from brands that they trust. Public scrutiny will be fixed upon these large multinationals and how they operate their businesses, with an increased focus on their social and environmental responsibilities. Now this may sound all doom and gloom for the banks, but hope is not lost…

Positive strides can be made through the introduction of sustainable procurement as a vital first step in supercharging the green credentials of financial sector businesses. The lifecycle of an IT device presents a whole host of sustainability challenges, from energy consumption to the use of toxic chemicals, to end-of-life handling and more. E-waste, which includes all types of IT hardware, is the world’s fastest growing waste stream. The United Nations University’s (UNU) 2014 Global E-Waste Monitor report found that 41.8 million tonnes of e-waste was generated in 2014, and is expected to rise by almost 25 percent by 2018.

The implementation of sustainable procurement for IT products is a simple yet powerful action whereby banks can effectively meet their sustainability targets and at the same time help to build trust in their brand.. Although the environmental problem may seem vast and daunting, beginning with sustainable procurement can make a noticeable impact for financial institutions wanting to strengthen their CSR reputation.

Bolster your reputation

From the get-go, buying sustainably is becoming the new norm, and for banks it is increasingly vital for their reputation that they are seen to be mindful of sustainable procurement. Even during the recession, banks such as Santander and Deutschebank were championing sustainable supply-chains, with Deutschebank’s Green Supply Chain Initiative “measurably improving eco-efficiency performance”. Simply making sure all IT products purchased comply with third-party sustainability certifications can allow banks to publically prove their commitment to tackling energy consumption, toxic materials, emissions and recycling amongst many other key targets.

Back up your claims

Making the step to smart purchasing decisions with third-party environmental and social sustainability certified products is both an instant and long-term method of backing up strong sustainability claims with concrete evidence.  In adopting certified electronic products, banks are also able to visualise and quantify the sustainability benefits of this action, with measurable strides towards reducing their carbon footprint. For example, a bank may be able to claim that its IT hardware does not contain hazardous chlorinated and halogenated flame retardants, or that its IT products comply with even stricter regulations than decreed by law. It may also profess to only buy products from bands with a socially conscious supply chain policy.

Stay ahead of the regulation game

Regulations in the banking industry are constantly being redefined and strengthened, particularly within the European Union. Implementing a sustainable IT procurement policy could allow banks to be ahead of the game with regards to their environmental compliance. Putting systems in place to ensure that your organisation is doing more than is asked of it by law decreases the chances of having to make substantial structural reforms in order to comply with future legislation.

Make noticeable cost savings

Sustainable IT needn’t cost the world. The belief that sustainability-certified IT incurs a higher cost has been a strong contributing factor in its neglect by financial institutions during times of recession, however sustainable approaches to procurement can in fact generate cost-savings. The Chartered Institute of Purchasing and Supply (CIPS) reports how energy efficient tech purchasing and promoting re-use can generate significant cost savings.

The potential benefits of using third-party sustainability certifications as a tool for procurement have not gone unnoticed amongst financial institutions in other countries. Currently there is huge demand for certified products from the German and Northern European financial sector.

It is time for the UK financial sector to catch up and assert itself as a leader in sustainable procurement whilst realising the wealth of benefits that come with this approach. Just as consumers can make the decision to buy Fairtrade coffee, or conflict-free diamonds, so too can large organisations lessen their responsibility for the suffering of people and damage to the environment caused by the electronic goods economy by purchasing the most socially and environmentally friendly products on the market.