How does the summary prospectus rule impact the environment?

The Summary Prospectus rule offers a significant opportunity for financial firms to commit to environmental sustainability and to appeal to today’s environmentally conscious investor.

According to Aite Consulting’s April 2008 report “Green in More Ways Than One: The Economic and Client Impact of Going Paperless,” the summary prospectus will save more than 128 acres of forest per year.

The summary prospectus also reduces the carbon footprint of the entire print process, especially if firms are more aggressive about implementing electronic delivery. That means fewer pages and documents need to be printed, shipped, stored in warehouses and then mailed to investors.

VIDEO: What is the environmental impact of the Summary Prospectus rule? See what Paul Haaga of Capital Research & Management says about the fate of 161,000 trees, as well as the wasted resources involved in producing 70 million shareholder reports.

How to calculate the environmental impact of the summary prospectus rule

According to Aite Group (and UC Berkeley), the average tree makes 80,500 sheets of paper and the US Forestry Service calculates that the average acre of forest contains roughly 300 trees.

For every mutual fund that delivers a summary prospectus:
• compare summary prospectus page count with statutory prospectus page count
• take the number of pages saved per prospectus and multiply by the number of shareholders
• divide that figure by 80,500 (pages per tree) to figure number of trees saved
• divide number of trees saved by 300 (trees per acre) to figure forested acres saved

For example, if the summary prospectus saves one fund from printing 60 pages, and there are 140,000 shareholders, that’s 8,400,000 pages saved. So the environmental impact is over 104 trees and one third of an acre of forest saved on this prospectus print run.