The Green Report: Does Paperless Billing Really “Save Trees?”

Over the past 10 years telcos, utilities, banks and other large businesses have spent tens of millions of dollars in efforts to get consumers to replace their paper bills with electronic bills and statements. Despite their efforts they met with limited success overcoming online access obstacles, consumer resistance to change and fears of identity theft, phishing and security… until recently.

If you are a print service provider of paper-based billing services, this article may help you understand some of the market forces you will need to confront as well as some of the regulatory factors that may help to level the playing field for sustainable paper-based billing and transpromo solutions. While there is still room for improvement, the forest products, papermaking and printing industries in the United States and Canada depend upon and do a great deal to support healthy forests and the sustainable sourcing and use of paper. However, the marketing claims of some companies maintain printing and paper making “kills trees,” and that switching to e-billing results in “saving trees.” Those are very emotionally charged words… but do they ring true?

A 2007 study by California-based Javelin Strategy & Research asserts: “If all the nation’s households just received and paid bills electronically, they’d save 16.5 million trees each year.” It is one thing to say e-billing uses less paper, or less energy for transportation, but it is quite another matter to claim that e-billing “saves trees.” While there are many marketers that are making claims that e-billing “saves trees,” I’m not aware of any company that has provided empirical evidence such claims are true. In all likelihood they believe those claims are true, but it would appear that they may have failed to substantiate their claims. If the saved trees in question exist, one way to settle the matter would be to provide their GPS coordinates. Claims that trees will be saved by e-billing begs the question I asked recently in a discussion thread on the social media site:

Which trees are saved… and where are they located?

How many companies do you do business with that claim that e-billing saves trees? If you find any companies that can answer this question please let me know! If a tree was supposedly saved by electronic billing and nobody can find it on Google Earth, was it really saved? If a company claims that e-billing saves trees, or results in the planting of trees, I see no practical reason why they should not be able to provide the GPS data for each and every tree.

A partnership between Friends of the Urban Forest, the City and County of San Francisco, and Autodesk provides some insight into how it might work: The Urban Forest Mapping Project leverages new MapGuide Open Source technology that digitally pinpoints the location of each tree, maintains tree data in a consistent database, and offers Web access to the tree data—for maintenance and planting efforts. Because it’s open source, the community can even get involved by posting photos and stories about their own trees that they plant and map online.

If the trees in question were in old growth forests or ecologically sensitive areas I would be the first to argue for their conservation. But if the trees are from sustainably managed forests then their harvest is an environmentally responsible business practice that has significant economic and social value.

In fact, recent studies conducted by the states of Maine and Washington indicate that healthy forests are highly dependent on market demand for sustainably sourced wood products, and that slack demand can lead to increased “liquidation” clear cutting and the sale of forest land to low density developers. I’m all for the creation of an effective registry that would allow people to easily opt-out of receiving unwanted phone books, direct mail or paper bills, but I believe that banning phone books or advertising mail, and making unsubstantiated claims that e-billing saves trees, are unwarranted and potentially misleading, In addition they may well result in significant unintended economic, environmental and social consequences.

If a company tells you that when you buy their product they will save trees, it is reasonable to expect that they would be able to identify the trees. Don’t misunderstand me. I believe that e-billing can have multiple beneficial environmental impacts if it is carried out responsibly, but so too can responsibly managed forestry, paper making, printing and snail-mail based billing.

Did you know that the USDA Forest Service has maintained a detailed Forest Census covering forests on all forestlands within the United States under various names (Forest Survey, Forest Inventory and Analysis) for some 70 years? The Forest Inventory and Analysis (FIA) Program provides the information needed to assess America’s forests and projects how forests are likely to appear 10 to 50 years from now. In the Northern states the amount of land covered by forests has substantially increased over the past 100 years, and the number of acres that are managed in accordance with FSC & SFI Sustainable Forestry practices has increased dramatically as well.

Print service providers are being impacted by the economic downturn, declining demand for print and legitimate competition on many fronts. In response many have been developing new and more effective ways to increase the value and eco-effectiveness of print through the use of design for sustainability, digital transpromo production technologies and sustainable sourcing of paper. However, print service providers have done little to address the rising tide of marketing messages like these from Javelin Strategy & Research:

“Turning off paper bills may seem like a small change, but it can have a big collective impact on preserving the world around us… if every U.S. household switched to e-bills, online statements and payments, we could save 16.5 million trees, reduce solid waste by 1.6 billion pounds and reduce toxic air pollutants by 3.9 billion pounds, the equivalent of having 355,015 fewer cars on the road. In one day, a single tree can provide cleaner air for up to four people and discharge up to 100 gallons of water from the ground into the air, according to the U.S. Department of Agriculture. If an additional 20 percent of all American households would switch to electronic bills, statements, and payments, the collective impact per year would save 1,811,275 trees.”

Online Banking & Electronic Bill Presentment can result in many economic and environmental benefits: reduced costs for the enterprise, reduced energy consumption for the enterprise & reduced paper waste sent to landfill… but the explicit and implied claims that they “save trees” are broad and largely unsubstantiated. Saying that adopting e-billing saves trees is like saying eating Rice Crispies saves corn.

After years of mediocre results, billers have found that the secret to increasing the adoption rate of e-billing appears to be appealing to the growing desire of consumers to save trees and reduce their impact on the environment. Recent research from Harris Interactive and The Marketing Workshop found that 58 percent of electronic bill recipients indicated that reduced environmental impact was important or very important in their decision to both receive and pay bills online.

Recognizing a need and an opportunity to present billers with a more effective “green marketing” story, an alliance called “Pay It Green” was organized by NACHA, The Electronic Payments Alliance in 2007. NACHA is a not-for-profit association that oversees the Automated Clearing House (ACH) Network used by more than 15,000 depository financial institutions to originate and receive more than 18 billion ACH payments per year. NACHA represents nearly 11,000 financial institutions through direct membership and 18 regional payments associations.

The Pay It Green Alliance is comprised of more than 20 financial and consumer billing companies, focused on educating consumers and businesses about the “positive environmental impact of choosing electronic bills, statements and payments instead of paper.”

The research conducted by the Electronic Payments Association’s “Pay It Green” coalition suggests that a significant percentage of the U.S. population wants to believe that e-billing saves trees. It is also the case that a significant percentage of the population tends to believe that “saving trees” is always environmentally preferable to harvesting trees and growing more trees despite evidence to the contrary. Saving trees has been given top billing in NACHA’s Pay it Green campaign because market research showed that message to have the greatest impact in motivating consumers to change their adopt e-billing, but the credibility support presented for the claim is questionable at best.

Is Perception Reality?

The forest products and paper industries has done a miserable job of managing public perception in accordance with the significant strides that many companies have made in addressing sustainable forestry, responsible manufacturing, waste paper recovery and recycling. Trees come from nature and can be returned there without ecotoxicity concerns when their life of service is complete. The same cannot be said for IT systems or for the fossil fuel energy typically used to power them.

At a cost of $5 to $7 to produce a paper bill versus the 3 to 5 cents it costs to produce an e-bill, billions of dollars in cost savings hang in the balance and the stakes are high. For utilities, telcos, banks and other businesses sending high volumes of bills, statements and invoices, the benefits of electronic billing are significant:

  • Reducing customer billing and collections costs by as much as 90 percent
  • Cost savings of up to 85 percent on paper, printing and postage;
  • Instant bill delivery, instead of three- to five-day print and mail cycles;
  • Quicker payment and reduced DSO (Days Sales Outstanding);
  • Customer behavior visibility through e-mail and online tracking;
  • Significantly reduced payment processing labor costs

Companies like HSBC are careful in presenting their case for the environmental benefits that your adoption of e-billing will result in. HSBC has partnered with the Arbor Day Foundation to plant at least 100,000 trees in national forests as part of paperless campaign, with HSBC pledging to donate $1 to plant a tree for every customer switching to paperless statements.

HSBC has also partnered with Trees for Cities to plant one real tree for every 20 accounts that no longer require paper statements. They have even created a virtual forest where consumers can keep track of the trees planted. Similarly, Orange & Rockland Utilities has an agreement with the National Arbor Day Foundation to plant trees in a fire-damaged national forest.

Recently, Fiserv, a provider of information technology services to the financial industry, and PSCU Financial Services, the nation’s largest credit union service organization (CUSO), announced that they would be co-sponsoring an e-mail marketing campaign targeting consumers of financial institutions served by PSCU Financial Services to become a part of their Go Paperless, Go Green Campaign. The two companies sponsored the planting of one tree for every bill paid online by a new bill-pay subscriber at the financial institution’s Web site from Jan. 19 through Feb. 28. This year, the two companies have set a goal of planting at least 7,000 trees in the John M. Bethea State Forest in Glen St. Mary, Fla.

“Our campaign taps into the growing influence of environmental concerns on American consumer behavior,” said Leslie Reistrup, director of eServices at PSCU Financial Services. “Our objective is to educate members of participating financial institutions about how they can make a difference by taking positive steps like signing up for e-bills and paying bills online.”

According to Martha Peters, senior vice president, Alternate Delivery Channels, DFCU Financial, “We believe many of our credit union members are motivated to make changes in their everyday habits out of a growing concern for the environment. By giving members a wonderful opportunity to contribute to a healthier environment and plant a tree on their behalf, we believe we can increase online bill payment adoption.”

While many companies appear to be engaging in responsible marketing practices, with so many cost reductions and benefits to billers on the line during these difficult economic times, it is possible that some companies might be tempted to take unfair advantage of the growing consumer interest in being green to advance their case for going paperless in ways that might run afoul of the Federal Trade Commission’s Green Marketing Guidelines.

“These guides apply to environmental claims included in labeling, advertising, promotional materials and all other forms of marketing, whether asserted directly or by implication, through words, symbols, emblems, logos, depictions, product brand names, or through any other means, including marketing through digital or electronic means, such as the Internet or electronic mail. An environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit, expressly or by implication. Marketers should avoid implications of significant environmental benefits if the benefit is in fact negligible. Environmental marketing claims that include a comparative statement should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid consumer deception. In addition, the advertiser should be able to substantiate the comparison.

“It is deceptive to misrepresent, directly or by implication, that a product, package or service offers a general environmental benefit. Unqualified general claims of environmental benefit are difficult to interpret, and depending on their context, may convey a wide range of meanings to consumers. In many cases, such claims may convey that the product, package or service has specific and far-reaching environmental benefits. As explained in the Commission’s Advertising Substantiation Statement, every express and material implied claim that the general assertion conveys to reasonable consumers about an objective quality, feature or attribute of a product or service must be substantiated. Unless this substantiation duty can be met, broad environmental claims should either be avoided or qualified, as necessary, to prevent deception about the specific nature of the environmental benefit being asserted.”

It’s one thing to make green marketing claims if they are specific and can be substantiated, but quite another when a reasonable consumer might be led to adopt e-billing based on the belief that it was saving trees, when it might not in fact be “saving trees” and may also be exacerbating deforestation.

If you come across green marketing claims for e-billing that you find are overly broad, misleading or unsubstantiated; or if you are interested in bringing positive stories about life cycle analysis or triple bottom line benefits of sustainable print billing or transpromo solutions to light, tweet me at or send me an e-mail at

It’s time to shine a light on the positive aspects of print media that sustain our forests and the trees.

Don Carli is a senior research fellow at The Institute for Sustainable Communication.