5.7 Emission reduction and environmental cooperation

In the operations of the Bank of Finland and the Financial Supervisory Authority, the largest environmental burden is caused by properties, cash supply and travelling. The Bank has successfully reduced emission levels by changing operating practices and introducing new technologies in the workplace. The Bank of Finland also entered into environmental cooperation with the other European central banks.

The most effective method for the Bank of Finland and the Financial Supervisory Authority to decrease the environmental burden is to improve energy efficiency by taking joint action. As a result, CO2 emissions have declined by 40% in the past ten years.

As in previous years, the largest source of emissions is the heating of properties, followed by electricity consumption. At the same time, the related emissions have declined the most, as there is less need for properties and energy consumption by properties has consequently fallen.

In contrast, business travel is still considerable and the volume of CO2 emissions has remained unchanged; business travel is still the third largest source of CO2 emissions.

First steps in environmental cooperation between central banks

The Bank of Finland and the Financial Supervisory Authority monitor the environmental impact of their operations using an environmental performance indicator that is proportionate to operating expenses and takes into account the greenhouse gas emissions from energy consumption, passenger transport, procurement and waste. In 2018, the Bank created 59.37 kilograms of CO2 emissions for every EUR 1,000 of operating expenses. At the end of 2017, the corresponding figure was 61.17 kilograms of CO2. The Bank has not offset its emissions by purchasing emission reduction units.

The Bank of Finland continued to cooperate with the other European central banks in environmental issues. In total, eleven central banks took part in a programme coordinated by the ECB, where two meetings were held to discuss the environmental challenges faced by central banks and to assess best practices. The first central banks are considering carbon offsetting via the purchase of emission reduction units.

Lower environmental impact in currency supply

The Bank of Finland has streamlined the logistics of cash supply since the introduction of the euro, by centralising banknote sorting and increasing banknote recycling at the regional level, with the help of cash processing companies. The increasing popularity of electronic payment has in turn reduced the need to transport and process cash.

Currency supply is operationally physical activity, and therefore changes in practices and habits are reflected as lower environmental impact.

In 2018, the Bank of Finland renewed its banknote storing practices, resulting in a decrease in cash transport to the central bank.

The storing of ‘bank packages’ has reduced double sorting: we do not sort the packages, we simply return them to the customer the following day.

Decrease in the euro banknote elimination rate

The increasing use of ‘bank packages’ has reduced the volume of fit banknotes returned to the Bank of Finland and hence also sorting. The phasing out of the first series of euro banknotes in recent years has gradually pushed up the unfit rate, but the overall elimination rate has decreased slightly.

The lower unfit rate is due to the new sorting machines, which were introduced in 2018. They provide greater accuracy in detecting fit banknotes, and consequently, the number of banknotes incorrectly sorted to unfit has decreased (Chart 19).

The parallel circulation of old and new banknotes has cut the cost of banknote procurement, as fit banknotes remain in circulation for a longer period. The quality of banknotes in circulation in Finland is still excellent.