This article is written by Jonas Edlund, Pagero, and was originally published in “The state of Green Economy Report 2016”.
Why recycle, when you can eliminate?
The UAE has one of the world’s highest levels of paper consumption per capita, estimated at 175-200 kg per year, close to 3 times the global average (Gulf news 19/09/2011, 17/11/2012). A significant contributor is the sheer volume of A4 paper still used to pass business ‘messages’ such as orders and invoices. Whilst paper recycling is growing, eliminating the need for paper in the first place is clearly superior.
Innovative technologies, enabling secure and efficient electronic transactions, are now available to organisations of any size.
Green Business Transactions
While green initiatives are gaining momentum in the UAE, many require lengthy projects and large investment. One initiative that can quickly benefit the environment and deliver positive operational results, has yet to be fully captured and is accessible by organisations of any size. This is the avoidance of all paper in business-to-business (B2B) transactions.
In the average sales and purchase transaction, several documents are passed between customer and vendor. Each may have multiple pages and be printed several times. Quickly, one transaction can consume a large quantity of paper. Multiply this by hundreds of transactions and thousands of businesses and you can get an idea of the opportunity for green savings.
Earlier this year, the Dubai Electricity & Water Authority announced that 85% of its customers would not receive a hard copy of their bills. This move alone helped DEWA reduce their carbon footprint by over 330 tonnes and attain significant savings in paper, printing and postage costs.
Can the same be achieved from making business-to-business transactions electronic? The answer is a resounding YES!
Figure 1: Paper flows vs Electronic flows.
Pagero, a Scandinavian company, has connected over 12,000 companies across 42 countries to its Pagero Online network and has a reach of over 500,000 organisations through extended partner network. Pagero’s clients range from the largest global companies, such as Hewlett Packard, through to sole traders. Pagero is also active in the Middle East and has established a partnership with Dubai Carbon to share its expertise and support a wider knowledge exchange programme.
Figure 2: e-Transaction Network – companies of any size.
Organisations may connect to the Pagero Online network using one of a variety of simple methods, with different levels of automation, depending on the nature and volume of transactions. Most connections can be completed in a matter of hours.
Once connected the organisation can conduct transactions with everyone within the network.
Business Benefits of e-Transaction
It’s not often that the ‘greening’ of a business can also deliver many operational and economic benefits. In this case, using ‘touch-less’ electronic transactions processes, deliver efficiencies in many areas including:
- Labour efficiency
- Transactional Efficiency
- Consumable efficiency
- Transportation efficiency
- Cash cycle efficiency
- Storage space efficiency
Pagero serving Hewlett Packard across EMEA
Hewlett Packard is an example of a leading organisation for whom Pagero have improved sustainability and efficiency by eliminating paper from transactions with their partners. HP relies on Pagero to send e-documents in 23 EMEA countries. Implementing Pagero’s services has, for HP, contributed to extensive time-savings, a strong increase in cash flow and has helped HP gain high flexibility in a diverse market.
“The environmental aspect of e-invoicing is extremely important to HP and we have our own organization devoted to reducing our environmental impact in any way we can,” says Mr. Thomas Bonwetsch, Program Manager, EMEA e-Invoicing Program Direct Accounts, HP. “With Pagero the invoice turnaround has been reduced. We know if an invoice has been successfully submitted or rejected. In the paper world, this process would take 7 days or more in comparison.”
In addition successful results for HP have included:
- Increased control and security of all outbound invoices
- All legal requirements fulfilled in all countries
- Strong and positive increase in cash flow
- Strengthens HP’s offerings to the market
Electronic Transaction Legislation
In many global markets, electronic transactions are defined by government legislation. The level of legislation varies, from the simple mandate that government organisations themselves support electronic trade, through to laws that all transactions over a certain value or within certain industries must be transacted electronically. Interestingly, developing countries such as those in Latin America are among the nations that have the highest level of adoption. This is heavily influenced by the more stringent legislation in those markets. Among world leader are Brazil, Chile, and Mexico who have similar adoption levels to the Nordic countries who have been pioneers of the technology.
Supporting Dubai’s Sustainable Development Initiative
In 2012 HH Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai launched the Green Economy for Sustainable Development Initiative. The fifth track of the initiative is the green life track, which involves a set of policies and programs aimed at rationalising the use of natural resources as well as projects to recycle waste generated by commercial or individual uses. It also includes awareness-raising initiatives and environmental education. The avoidance of paper use sits squarely within this track, and over the coming years, business in the UAE is likely to see continued steps, whether by initiative or legislation, to encourage business and governmental departments to eradicate paper from as many processes as possible. The Dubai Plan 2021 also emphasises the need to reduce both CO2 consumption and solid waste levels.
The State of Green Economy Report 2016 is a review and critical reflection of the findings of the World Green Economy Summit, held annually in October in Dubai. The publication indexes green economic development, meanwhile, offering a platform for national and international experts, and thought leaders to share findings of research and development, solutions, tools, as well as replicable initiatives and case studies. The State of Green Economy Report is published by Dubai Carbon. Read more about their work at http://dcce.ae/