Every time I look at the cabinet below the TV where we store old newspapers, magazines, old books, etc which we throw out or sell every month, I realize that a huge chunk of it is financial reports which companies send to their shareholders every quarter. Also most of them are still in their plastic bags or paper envelopes … yeah they go straight from the courier guy’s hands into the waste paper cabinet. Why would I bother to read a hard copy of an annual report when I can easily browse through one online (using control F) and even have all kinds of financial analysis on the various financial portals? Seriously how many of us still bother to read hard copies of annual reports?
So I really wonder why these companies still courier hard copies to all the shareholders every quarter. Surely at least 50% of all the shareholders are computer literate and can use a soft copy of the report which can be mailed to them or by going to the company’s website to look for information.
So I really wonder why these companies still courier hard copies to all the shareholders every quarter. Surely at least 50% of all the shareholders are computer literate and can use a soft copy of the report which can be mailed to them or by going to the company’s website to look for information.
Well the reason I’m writing about this is; imagine the amount of paper we waste over this and what this does to our ecology. As per the American Forest & Paper Association to print 1,200 copies of National Geographic we need to chop down one tree.
So I tried to do a small analysis to calculate roughly how many trees we can save if we stop the use of hard copies of financial reports. The company I’v chosen to do this small analysis is India’s biggest company – Reliance Industries.So even if companies stop sending physical copies of financial reports to half of their shareholders and instead email soft copies as attachments, we can save around two crore trees every year and yeah that too just in India!!! I know we have recycling of paper and all … but even then this is an issue to ponder on! Not to mention the cost of couriering and labour for the companies, which goes in packing the reports in envelopes and mailing them!
Companies should give the option to the shareholder’s to either receive a hard copy or a soft copy. Thus a large amount of cost can be saved for companies if they opt for emails rather than printing the documents and couriering them and in turn this will improve their bottom lines. This is an indirect incentive for shareholders as improved bottom lines mean bigger bonuses and also possible capital appreciation in the stock market.
Amazing! Good thought!
ReplyDeleteCompanies should start this practice as a part of their CSR initiatives. Vodafone has already started this practice by urging their subscribers to ask for e-bills rather than hard copy of bills. And it actually just requires an sms from the company for me to pay the bill, forget the hard copy that goes straight into a file and then to the waste paper stack.
Good thought Aniket... I appreciate the effort of the analysis done... YES I totally agree to Ankiet's point of view... I belive that companies should give an option to their shareholders if they want to receive a hard copy or a soft copy or "NO COPY"..as you said 50% are computer savy..the rest of 50% sharelhoders,I am sure out of that 50 20% are those who do not even read the first page of the report.... I have seen such egs and so writing it down here... Its the fact....
ReplyDeleteGreat analysis sir. Really intresting and insightful. If companies start using soft copies instead of hard copies it could really make a vast difference to the environment.
ReplyDelete- Jigar.
Aniket sir,
ReplyDeletei dont quite agree with you. Ya its good to have bills and bank statements in elec. form, but if you want to read something online,especially the financial reports, its quite cumbersome. One does not have luxury to fold the annual reports, do the markings. If we see, most of the annual reports are +100 pages. I don't think the normal investor is going to read so many pages online. Few pages on online newspapers one can read easily, but financial reports-its difficult.
Rathin
I totally appreciate your concern Rathin. But something to think about is how many out of RIL's subscriber base of 3 million shareholders actually do the analysis themselves? Also I'm not not asking the companies to totally do away with the print version. But give an option to the shareholders to get a soft copy if he is not going to use the print copy. Also I'v been a financial analyst all my life and I prefer to look at soft copies and copy/paste the stuff I need from the report than go through a hard copy of a financial statement and highlight portions.
ReplyDelete