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Discover how e-invoices not only protect the environment, but also make your business processes more efficient. A sustainable future starts here!
The so-called ESG criteria, i.e. the promotion of environmental environmental protection,sustainability and ethical corporate management (governance), are increasingly becoming an integral part of corporate culture. More and more companies are recognising that e-invoicing is a simple step towards reducing digital waste and their environmental footprint. The well-known main culprit is of course the paper invoice, but e-invoices sent by email are not entirely innocent either.
The ecological footprint of paper invoices
The environmental impact of invoicing is largely determined by carbon dioxide (CO2) emissions. To assess the carbon footprint of a paper invoice, a thorough analysis must be conducted of its entire lifecycle, from paper production and printing to processing, administration, delivery and disposal.
Numerous studies have already been conducted to determine the precise carbon footprint of paper invoices. The latest billentis market study, "The Global E-Invoicing and Tax Compliance Report: Watch the Tornado!", provides an innovative analysis of the e-invoicing landscape, demonstrating how technological advancements and regulatory requirements are transforming digital commerce. The report also presents key figures that illustrate the environmental impact of paper-based invoicing. CO2 emissions associated with producing one kilogram of paper can vary significantly depending on factors such as the type of paper, the source of the raw materials, the manufacturing process and the energy used. Paper production typically involves felling trees, transporting wood, an energy-intensive pulp-making process, and manufacturing the paper itself. In some cases, there is also a recycling phase. Each phase contributes to the overall CO2 emissions.
According to the latest billentis study, taking into account different production methods, the carbon footprint of paper is generally estimated at between 1.45 kg and 3.6 kg of CO2 per kilogram of paper. With a conservative estimate of 2 kg CO2 per kilogram of paper, the CO2 footprint of a single 20-gram paper invoice (including transport, printing, and archiving) would be around 40 grams. These figures clearly demonstrate the contribution of paper-based invoicing to CO2 emissions and its environmental impact.
One tree can produce around 7,500 A4 sheets, which equates to 3,000 invoices at an average of 2.5 pages per invoice. Producing these 3,000 invoices – or one tree – generates roughly 120 kg of CO2.
According to estimates by the United States Department of Agriculture (USDA), a mature tree can absorb around 22 kg of CO2 per year. Assuming a lifespan of around 10 years before being harvested, a single tree could absorb roughly 220 kg of carbon dioxide over its lifetime – or around 80 grams per invoice – which is then no longer offset once the tree is felled.
With around 560 billion invoices issued worldwide every year, and only around 125 billion currently sent electronically, this leaves approximately 435 billion – over 75% – still in paper format. Based on an average CO2 emission of 40 grams per paper invoice, and an additional 80 grams that is no longer absorbed due to deforestation, paper invoices generate an estimated 52 megatonnes of CO2 annually.
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The PDF trap: Why e-mail invoices alone are not enough
Although replacing paper invoices with emails helps preserve trees, it still generates significant levels of digital “waste” from emails and PDF files – which are now considered one of the biggest environmental pollutants on the planet. This digital waste arises from the energy and resources consumed in the creation, transmission, and storage of electronic documents. Even so, true e-invoices (i.e. not PDFs) are demonstrably more environmentally friendly than their paper counterparts. A fully structured e-invoice, while still a file, is 30–50% smaller in size compared to a PDF because it contains no graphics. This means less processing power is required – reducing the need for energy-hungry data centres! E-invoicing is therefore a simple step that can make a significant difference – especially as overall email volumes continue to decline.
Research backs this up. A study by Maija Tenhunen and Esko Penttinen ("Assessing the Carbon Footprint of Paper vs. Electronic Invoicing", Aalto University School of Economics, 2010) found that switching from paper to electronic invoices cuts the carbon footprint of an invoice lifecycle by an impressive 63%. This is largely thanks to reduced manual effort, material use, and transport. Structured e-invoices also enable greater automation and efficiency than either paper or unstructured formats like PDFs. These findings underscore the importance of e-invoicing as a more environmentally friendly alternative and illustrate how technological innovations can contribute to a more sustainable business environment.
It is indeed time to consider the effects of digitalisation on energy and resource consumption. A topic that is only slowly entering the public consciousness!
Nevertheless, one challenge remains: The growing number of digital documents leads to an excessive accumulation of data that can be considered digital waste. Our tip: Nowadays, there is no reason to store invoices twice. All these invoices stored in different places, including outdated ones, increase the volume of your digital waste to unrealistic levels. With the Banqup Premium - or Optimum - package, you can delete all duplicates and store your invoices in Banqup's digital archive, where they are neatly organised, easy to find, and archived for the legally required duration.
E-invoices - advantageous in every respect
Replacing manual tasks with digital solutions significantly reduces the time required and eliminates the need for paper-based processes and transportation. This creates more time for profitable activities. As we have seen, this substantially reduces CO2 emissions.
While the environmental benefits are the most obvious, e-invoicing also contributes significantly to social and governance improvements. Therefore, companies can use the switch to e-invoicing as a strategic measure to improve their ESG performance and reporting.
The transition also brings a number of social benefits, especially for small and medium-sized enterprises (SMEs), including better accessibility, even in remote areas, greater transparency of transactions, and significant financial benefits, e.g. through faster invoice payment and new invoice financing solutions. In addition, governance aspects will be improved by simplifying tax compliance, strengthening internal controls, optimising invoicing processes, and introducing and spreading accountability.
Sending and receiving e-invoices is particularly easy - anyone with a Banqup account can send and process e-invoices with ease, without any complex set-up or development work.
Conclusion
E-invoicing is not only environmentally friendly, it also offers businesses a variety of practical advantages. From reducing CO2 emissions and digital waste to lowering costs and boosting efficiency, machine-readable e-invoices have the power to transform your business processes. They represent a step towards a more efficient, economically sustainable, and environmentally friendly future.
It's time to pay attention to the details and do the right things in the area of digitalisation too!
Our all-in-one solution, Banqup, simplifies the e-billing process. What's more, Banqup requires no development or implementation effort. Designed specifically for small and medium-sized businesses, Banqup offers a fast and automated way to convert documents and data into any desired format. Sign up for our free Banqup trial today and discover how easy the transition to e-invoicing can be.
Be one of the pioneers! The environment will thank you!