Banco de México Serious About Sustainability

At the High Security Printing Latin America™ conference in March, Linda Rodríguez Casarrubias, Manager of Process Re-engineering and Development, presented the work being done by the Banco de México (BdM) on sustainability.

At the highest level the BdM has a code of ethics, institutional guidance and objectives which reference sustainability. The Directorate General of Currency Issuance has been working to reduce their environmental impact for some time and is working on a sustainability policy which will have observable results and indicators to measure the impact of cash and cash circulation.

Linda’s paper gave a comprehensive overview of the work being done and the plan to create a policy, agreed indicators and to meet the ethics, guidance and objectives of the BdM.

She covered four cash cycle sustainability actions.

Certification of the BdM as a clean industry

The government has introduced a federal programme which certifies organisations as being a ‘clean industry’. The programme complies with environmental regulations covering good operational and engineering practices.

The Mexico City print works at Complejo Legaria first engaged with this certification programme in 2012 with an action plan developed from 2008:

2012 Complejo Legaria level 1 certification
2014 Complejo Legaria level 2 certification
2016, 2018 and 2020 Complejo Legaria level 2 recertification.

As of 2021, an action plan (with a 24 month programme to completion) has been developed to certify Complejo Jalisco in Guadalajara, where the second print works is located, as a clean industry in 2023.

Examples of work undertaken to achieve the certification given included;

Safe management and final disposal of hazardous waste from banknote production
Reuse of cooking oils as biofuel
Separation and collection of recoverable waste for recycling
Wastewater from sanitation sources and production processes used to irrigate gardens
Maintenance of electrical lighting substations and installations throughout the Mexico City print works complex to use energy efficient technology.

Banknote and organisational LCA

BdM has conducted a two-phase Life Cycle Assessment (LCA) of its operations. The first phase was a banknote LCA, and the second an LCA of the production, distribution, administration and auxiliary and support services at the Mexico City print works and cash centre.

The LCAs have been carried out in accordance with ISO 14040/44, supported by the life cycle initiative from the UN environmental programme. They used the performance of the 200 peso banknote (worth approximately $10) as a reference. In 2013 1.44 billion P200 banknotes were produced. The work included a sensitivity analysis of the use of ATMs.

The work found that the production of the paper substrate created a high level of greenhouse gas (GHG) emissions, mainly from growing cotton, and banknote distribution involved burning a high level of fossil fuels. ATMs are run continuously, consuming significant electricity. In reality though, they are only active for two hours per day. ATM electricity consumption has the single biggest environmental impact in the cash cycle.

The presentation suggests that using a polymer substrate had two positive benefits. Its longer lifespan means fewer new banknotes need to be produced and the polymer can be recycled at the end of life.

Actions to address the findings of the LCA

The LCA led to the development of five areas of activity to reduce the environmental impact.

a) Changes to increase durability

In 2017 BdM trialled four different versions of cotton-based banknotes using the P100 denomination to assess which lasted longest. The four variations were:

Standard varnish on a high durability cotton substrate
An alternative varnish on a high durability cotton substrate
Standard varnish on a cotton substrate with synthetic fibres in it
An alternative varnish on a cotton substrate with synthetic fibres in it.

At the end of the study, BdM certified and chose the alternative varnish as suitable for use using the high durability cotton substrate.

BdM put in circulation its first polymer banknote in 2002 (P20), increasing the note life from 8.3 (cotton substrate) to 28.8 months, a 246% increase. The expected durability of the polymer P100 is an increase in note life of 46%, from 41 to 60 months, which should reduce production volumes by 36.5%. BdM also decided to use a polymer substrate for the P100 on its latest series.

b) Generate alternatives for the disposal of banknote waste

Until 2020 70% of polymer was recycled, and 240 tonnes of waste generated each year. In Mexico City BdM increased the reference price and the recycling company then went out of business. At the Jalisco site BdM had a problem with mixed rubber bands and package paper straps. A waste separation solution has been found.

The annual paper waste, 840 tonnes, currently goes to landfill. BdM has asked six companies to do trials to incorporate the waste. It is also surveyed 33 central banks and 13 private suppliers to find out what they do with their banknote waste.

Finally, BdM has commissioned a project with research centres over 2022-23. This project looks at the physical and chemical characterisation of the waste and seeks to develop sustainable alternatives for disposing of banknote waste.

Public awareness of the G series of banknotes

Banknotes are widely used to represent the nation and to unite it behind key themes.

In the case of the latest G series, the design includes six Mexican ecosystems and their flora and fauna, represented by UNESCO world heritage sites. These are there to tell the story that there is the responsibility to conserve and preserve these ecosystems because it will be the legacy for future generations.

Develop a sustainability policy

BdM sees its role as an active executor and promotor of sustainability in the cash cycle. In this context it will be working not only with the main cash cycle stakeholders in Mexico, but is also trying to establish a sustainability policy with other central banks. The starting point is exchanging information between central banks about what each is doing and the challenges they are facing.

Within Mexico, BdM aims to establish common environmental indicators and goals for the cash cycle by providing incentives to stakeholders to reduce their environmental impact and that of the cash cycle, from production through to services.

Within its own direct area of responsibility, it is looking at raw materials and security features that are more ecological, durable and efficient, through the development of joint projects, along with research centres and suppliers. The goal is to produce fewer banknotes because they last longer and to reuse/recycle of materials, saving energy and water.

All of this work aims to create a wide-ranging sustainability policy that guides actions related to processes and products in the whole cycle.

Specific Actions Taken by the BdM to Reduce its Environmental Impact

Electric power consumption

LED lighting technology creates less heat and uses less electricity, saving up to 80% of electricity needed for lighting
Energy collection systems using solar panels
Sun protection filters in offices that increase the efficiency of temperature conditioning systems and reduce electricity consumption used for lighting.

Water consumption

Dry urinals and showers, flushometers, sinks and other water saving sanitary accessories
Water treatment plants to recycle residual water to irrigate green areas
Project to implement rainwater recovery, seeking a saving of at least 30% in water consumption.

Paper consumption

Promoting the use of electronic means of communication
Using paper with 50% recycled fibres.

Hybrid vehicles and recycling

As of 2016, all BdM car replacements have been hybrid or electric vehicles
Motorcycles replaced with units of smaller cylinder capacity
Reduction of the use of vehicles by workers by granting benefits to people who use bicycles, motorcycles, shared cars and hybrid vehicles
Initiative to gradually reduce the use of non-recyclable disposable products and replace them with biodegradable disposable products.