While there have been countless, ground-breaking developments in digital banking in recent years, cash remains the most used legal tender on the planet. Therefore, we need to consider how can we make cash as green as possible.
To find out, Finextra spoke to the head sustainability engineer at G+D Currency Technology, Alexandra Geiger, on the Green Banknote Initiative being spearheaded by her company.
In March 2022, G+D founded the Green Banknote Initiative to encourage central banks and currency issuers to improve the process of developing sustainable banknotes and reduce carbon emissions. Geiger details that G+D felt a responsibility to provide sustainable banknotes as a cash producer and that they have received positive feedback and interest in the programme since its establishment.
The Initiative, described as an “open-dialogue platform addressed to all cash issuers,” works to make banknotes greener on all fronts, from the cultivation of fibres, banknote design, production, , printing process, to cash circulation, with the aim of reducing the carbon footprint and use less resources in the production and circulation of banknotes.
Geiger explains that the lifecycle of banknotes creates a huge amount of a central bank`s carbon footprint, quoting the Bank of England which reported that 67% of their carbon emissions arise from the supply of banknotes. . Conversely, the calculated footprint of the Green Banknote amounts to just 7.8 grams of carbon dioxide per banknote, which includes the cultivation of fibres, transportation of materials, paper manufacturing, production of security features, and the entire printing process.
Geiger points out that the company saw potential for improvement in the fibres of the banknote paper, inks used for printing, and plastic components used to make current banknotes.
The Green Banknote developed by G+D has a core of 100% natural renewable fibres, consisting of 50% organic cotton and 50% regional grown and FSC certified wood pulp, which is coated in a thin layer of polymer for durability. The cotton used in the notes are ethically grown in mainly Turkey and Greece, , all of which are cultivated sustainably with limited fertilisers and pesticides which saves 63% of carbon emissions. There is also the possibility to substitute the fibre core by other fibres such as sustainable cotton from Africa. There is little to no price difference between the conventional fibre content and the fibre mix of organic cotton and wood pulp, making the Green Banknote as affordable as less sustainable tender to currency issuers.
“Besides the fibres, we wanted to tackle the plastic components of banknotes,” Geiger explains. “The Green Banknote is covered with an even thinner polymer layer than the standard hybrid banknote, which means 30% less plastic per banknote. Additionally, it’s 5% lighter, which amounts to saving around five tonnes of plastics per 100 tonnes of hybrid substrate. When thinking of transportation issues, it also saves fuels. It has a positive impact not only of the banknote, but also across the supply chain.”
G+D’s sustainable cash also uses the first ever mineral-oil-free inks in the printing of banknotes. For plastic components, the Green Banknote integrates security features found on other cash such as watermarks and patches, which are applied using carrier foil made out of 70% recycled polyethylene (PET). Geiger emphasises the advantage of the natural fibre core having the ability to incorporate a variety of security features within the banknotes in order for central banks to offer the public banknotes that are as safe and reliable as possible.
Continuing on the features of the Green Banknote Geiger explains: “We know from analysis that carbon emissions increase by lifetime or lowered durability, so durability is really a key driver for sustainability. We had to figure out how to make our banknotes even more durable, and that’s how the hybrid substrate was developed, still keeping in mind to use as little plastic as possible and to prioritise natural, renewable fibres.”
Outlining the action being taken in the Green Banknote Initiative, Geiger underscores the need for collaboration to successfully implement the programme. She details the importance of working with central banks and cash issuers to work on developing cash in a greener way, as well as forming solutions towards the end of the banknotes’ lifecycles. Geiger also mentions the importance of learning how to repurpose and recycle discarded banknotes and shreds of banknotes – as while they cannot be reused to create new notes, it is important to find a way to repurpose them in a sustainable way.
Geiger emphasises her belief in the increasing demand of sustainable cash in the future, not only due to the growing interest in sustainability coming from more and more financial service providers, but in the shift in how central banks are examining their tender and making decisions to include sustainability as a requirement.
“Regarding banknotes in circulation, an advantage is that the green banknote can be processed by existing systems. We didn’t want central banks to invest in new processing machines as that would undermine the point of the sustainability journey. It was very important for us that the new notes can be processed using the existing processing equipment.”
Addressing the increased global interest in digital payments, Geiger argues that both cashless and cash payment options could make moves to be more sustainable in practice and development, stating that there are advantages and disadvantages to both.
“Cash will remain important because it is the most inclusive means of payment. Cashless payment options will coexist and grow. We need to look at every product to make it more sustainable, not only banknotes. Though they are not physical products, we also have to take into account the energy and thus resource consumption of digital means of payment or crypto assets such as energy-heavy Bitcoin.
“I think every contribution counts to support the global fight against climate change and with the Green Banknote Initiative we can tackle this problem together with other suppliers and cash issuers. It’s a collaboration between different stakeholders.”
Finextra recently announced its fifth Sustainable Finance Live conference and hackathon, scheduled to take place on 29 November. For more information and to register for this event, please visit the event page here.