In the three months leading up to 9 December, NatWest, a UK bank, brought together 36 organisations to establish cross industry working groups to improve the environmental performance of the UK’s cash cycle. Three working groups were set up looking at energy, plastics and CO2 to establish best practice and to drive change.
NatWest’s initiative takes place in the context of the 2015 Conference of the Parties, known as COP, which adopted the target of achieving net zero carbon emissions by 2050 as laid out in the Paris Agreement and which, in 2019, became part of UK law. Global emissions must fall by 7.6% each year between 2020 and 2030 if the global temperature rise is to be limited to 1.5°C and to achieve net zero. The UK projections suggest that it will fall behind where it needs to be.
The response of the industry was impressive, with parties from the entire cash cycle involved:
The ‘owners’ of the UK’s cash (the Bank of England and the Treasury)
Banknote and coin production (De La Rue and the Royal Mint)
Commercial banks (13 organisations)
Retailers (two organisations)
Machine suppliers (five organisations)
ATMs (Link and CMS Analytics)
Cash in Transit (two organisations)
Other suppliers (four organisations)
Associations (UK Finance and British Retail Consortium (BRC))
Press (Reconnaissance and Chartered Banker)
This group looked at how to minimise energy use whilst maintaining operations. Energy efficiency in buildings was excluded, since in most organisations this is an ‘estates’ issue rather than a day to day operational responsibility.
A number of challenges were identified:
Equipment turnover is low and, therefore, the focus needs to be to work with suppliers on reducing energy usage on existing equipment.
Environmental requirements often conflict with cost and reliability priorities.
Security is always the number one priority.
When setting targets, 2019 is a better year to use as the baseline since 2020 has been unusually low.
Current energy consumption is not known.
Clearly, future equipment needs to be designed with energy efficiency, including low power modes, at its heart. Behaviour and equipment usage play a significant role in how much energy is used and needs focus. A knowledge sharing portal needs to be set up, including for energy usage, so that best practice is shared.
The plan agreed is that in 2021 companies will move to using 100% renewable energy for their own operations and work with procurement to encourage their supply chain partners to do the same. By 2024 this should be a requirement on suppliers. In 2021 data should be gathered so that in 2022 energy efficiency standards can be set.
It was recognised that plastics are needed but that single use plastics, in particular, are wasteful. The obstacles to making progress were identified as:
Customers send in large volumes of unnecessary waste.
Plastics are used for storage, particularly for coins, and it will take time to be circulated out.
There is significant variance in the processes used across the industry.
Bag and till limits restrict the volumes carried. In addition, the size of alternative materials needs to be considered relative to the room in the vans.
The BRC agreed to help with customer outreach and engagement about the use of plastics. A review of standards to see if the value of coins in bags can be increased was needed. A plastic bag levy was discussed, and this will need work to understand how this might be calculated and charged.
Loomis and Virgin Money (formerly Clydesdale Bank) will trial using cardboard cartons rather than plastic and investigation is needed to see if cardboard can be used in NotaTracc trays. Glory explained that six countries in Europe use TCR fitness sorting to allow local recycling and a number of organisations will now investigate this.
Finally, increasing bulk till limits was proposed, although the insurance implications need investigating.
The plan agreed was to eliminate single-use non-recyclable plastic in note centres in a series of steps by 2030 (25% less by 2023, 50% less by 2025). Similarly, for coins, to reduce this, by weight, to less than 45% by 2030 (less than 70% by 2023, less than 60% by 2025). UK legislation has already set a requirement of less than 55% by 2030. The base line is 2019’s figures.
The obstacles identified included:
The availability of data.
An infrastructure challenge due to electric vehicles and rural locations.
Engagement, particularly in the supply chain.
The development of policies that have not considered the environment.
That Scope 3 does not allow off-setting. Even if it did, publicly funded organisations must use UK based offsets, and these may not be available.
Reducing carbon cuts across all that the organisations do. As a result, the TCR fitness sorting was mentioned again. The need for the environmental impact of policies to be part of policy development was highlighted, including the need for procurement to be used to include suppliers and partners. A trial is needed for keyless access. Knowledge sharing needs to be embedded and become normal. There is a need to collect good quality data and to share it. There was also discussion about the benefits of developing standards looking outside of the industry.
The agreed plan was to achieve net zero carbon for each organisation’s own operations and for business travel by 2030 (based on a 2019 base line).
There was also agreement on a voluntary commitment to a charter proposed as one of the outcomes of the work done (see below).
The charter created as part of this work includes both commitments and targets. All were asked to sign up to this by 29 January 2021.
As part of this work, it was agreed that UK Finance would work to unite the industry and to continue to drive collaboration. This role is particularly important given some of the actions identified by the working groups, such as the need to establish base line data against which to be measured, for a review of industry standards, to co-ordinate collaboration and information sharing etc.
The main aim of the UK Cash Industry Charter is to provide a cash industry ambition and a course of action to tackle climate change in the three key areas identified (plastic, renewable electricity and CO2).
In recent years, recognition of the issue of climate change has increased. In 2018, the Intergovernmental Panel on Climate Change published a special report on the impacts which would be seen if we fail to limit warming to a 1.5° rise above pre-industrial levels. In 2019, the UK government declared a climate emergency in the UK and passed legislation mandating that all greenhouse gas emissions in the UK be brought to net zero by 2050.
We recognise the urgency of this situation, while also recognising that businesses must find ways to continue to operate in this changing world.
This Charter shows our ambition by working towards a set of targets, our commitment to working collaboratively across the industry and the roadmap of initiatives identified as the key areas of focus that will help towards driving significant change in the cash industry.
We, the signatories to this Cash Industry Charter on Climate Action, affirm our commitment on behalf of our companies/organisations to work across the industry to achieve:
The Charter Commitments
The Charter Targets
The Charter Roadmap
1. Champion climate action within the cash industry through an enhanced and trust-building dialogue with relevant stakeholders.
2. Take significant climate action across the cash industry by working collaboratively with stakeholders and environmental advocates to develop and implement a shared strategy including targets and plans.
3. Quantify, track and report our greenhouse gas emissions and plastic usage consistent with standards and best practices of measurement and transparency.
4. Commit to prioritising materials with low-climate impact without negatively affecting other sustainability aspects.
5. Support the movement towards a circular economy and acknowledge the positive impact this will have towards reducing climate impacts within the cash industry.
6. Commit to continuously pursue energy efficiency measures and renewable electricity in our properties, products and services.
7. Reduce our emissions to as close to zero as possible before offsetting the remaining emissions. Where offsetting is adopted, the projects which are invested in are considered carefully and are accredited to a standard such as VCS and Gold Standard, which have clear frameworks for accounting, auditing and registering carbon credits.
