The UK government should let companies use blockchain technology to send out documents to shareholders instead of forcing them to send out hard copies, a UK tech expert has said.
The comments come after investment company Abrdn was forced to delay plans for its £1.5bn takeover of Interactive Investor, due to worldwide paper shortages.
UK takeover rules, which require companies to send out hard copies of documents to shareholders, mean Abrdn will have to send out 120m sheets of A4 paper to its more than 1m shareholders, if it is to push forwards with its £1.5bn acquisition of the online investment platform.
In sending out 120 pages of documents to each of its shareholders, Abrdn will be responsible for emitting an additional 500,000kg of CO2e into the atmosphere .
It is estimated the entire process will also cost Abrdn around £2m, and that 7,500 trees will have to be cut down to produce enough sheets of papers.
Meanwhile, the financial services industry sends out around 5.2bn pieces of paper each year.
However, Chris Ansara, CEO of blockchain company Alt/Ave has said companies should be allowed to send out using distributed ledger technology.
Chris Ansara said: “This is a farcical situation when financial services companies like Abrdn must cut down a small forest so that their shareholders can have a paper version of a document which can be safely and securely transmitted at a fraction of the monetary and environmental cost.”
“If the UK government is truly dedicated to digital transformation and also to reaching carbon net zero by 2050 then this sort of burden to business must be removed immediately.”
“The paper and the postage for this deal alone will release more CO2 into the atmosphere than flying a loaded jumbo jet around the world 100 times.”