The insurance company Allstate uses a lot of paper – in 2009 it used approximately 3.7 billion sheets, equal to approximately 450,000 trees. So it’s not surprising that the company identified paper reduction as one of its top environmental priorities, setting a goal of reducing overall office paper use by 25 percent by 2010. In their latest CSR report, which was released earlier this week, Allstate is revealing that it actually did much better, reducing its office paper use last year by 41 percent.
How did they do it? Allstate’s plan focused at first on the company’s employees. Setting 2008 as the base year, their plan, which was initiated in April 2009, asked employees to make four changes in the way they used paper:
1) Eliminate separator sheets on shared printers
2) Print double-sided whenever possible
3) Not to print unless necessary
4) Recycle used paper.
The incentive was more than just saving trees – by reducing overall office paper use by 25 percent the company estimated it will generate approximately $1 million in annual savings. By the end of 2009, Allstate already saw a reduction of 21 percent in its office paper use. Another step forward was taken in July 2009, when the Allstate Print Communication Center (APCC) received FSC and SFI certifications, so that when employees do print high-quantity documents they do it using a certified paper.
In 2010, Allstate’s employees did even better. By the end of the year, Allstate reduced office paper use by 41 percent in its home office campus and more than 50 percent in field offices (compared to 2008), resulting in a total savings of $750,000. Recycling of paper also increased in 2010 by 3.6 percent over 2009. This is really great news, but one thing that is missing in the report is the human perspective – wouldn’t it be great to add a story about one or two employees on how they reduced their paper consumption? After all, good CSR reports are always a combination of story-telling and data.
Encouraged by its in-house effort and success, Allstate turned to examine how it can reduce paper used in the communication with its customers. The company estimated it sends approximately 121 million billing-related documents through the mail annually and it set an ambitious goal of reducing customer paper 20% by 2013, using 2009 as a baseline.
Allstate approached it by offering customers paperless options such as eBill, an electronic version of a paper bill, and automatic payment plans such as the Allstate EZPay. These electronic options combined with eliminating unnecessary customer bill documents cut customer-focused paper use by 11.8 percent in 2010, compared with their 2009 baseline. Overall, Allstate saved approximately 14 million pieces of paper and listen to this – $7.8 million dollars in print and postage costs! So Allstate is well ahead of its 20 percent reduction target, not to mention the impressive savings it generates, which is all great. On the other hand, you can see why the U.S. Postal Office is heading towards bankruptcy.
In general, reducing paper use is a win-win strategy (again, if you ignore the impact on USPS, which I believe you should, unless you’re the Postmaster General) not just for Allstate, but for companies in general and those in the financial services industry specifically. It’s no wonder that according to a J.P. Morgan survey, this is the second most popular step companies are taking to encourage environmental awareness (the first is office recycling). J.P. Morgan, which launched a Go Green Campaign in 2007 to support paperless treasury services in organizations, explain that operations which rely on paper are basically inefficient and therefore moving to paperless operations save not just trees and money, but also increases efficiency in organizations, saving time and resources.
The same sentiment is echoed on Bank of America’s latest CSR report, where the bank describes how it has initiated a number of paper use reduction programs and applications that are helping the company to save costs, be more efficient and reduce its environmental impact. I believe this is the order many companies see in front of them when considering such reduction programs, which makes sense – cost savings is after all a very powerful incentive, especially in the current economic environment. If you take into consideration that U.S. companies spend (according to estimations) $25-35 billion annually on paper, you can only wonder how come we don’t see more companies that set up reduction goals like Allstate. Maybe after this report we will.
Raz Godelnik is the co-founder and CEO of Eco-Libris, a green company working to green up the book industry in the digital age. He is also an adjunct professor in the University of Delaware’s Alfred Lerner College of Business and Economics.