Postcomm, the independent regulator for postal services in the UK, has in principle given Royal Mail permission to offer a discount for distributing 'green' mail-outs.

Royal Mail's Sustainable Mail service offers bulk mailers a reduced price for mail-shots that are compliant with the recently introduced PAS 2020 standard for bulk mail. Because offering such a discount would potentially be unfair competition, Royal Mail had asked Postcomm to clarify whether or not the company could offer a reduced rate for 'green' bulk mail under its current license.

In its 'decision document', Postcomm acknowledges that a lower rate for 'green' bulk mail potentially creates a 'competitive distortion' in the postal market. However, it also agrees with Royal Mail that the introduction of Sustainable Mail will help ensuring the provision of a universal postal service.

Postcomm did object to Royal Mail's requirement that in order to qualify for a discount bulk mailers should present mail-outs in trays. Sustainable Mail will receive Postcomm's 'go-ahead' once this requirement has been removed.

Self-regulation and PAS 2020

Bulk mailers argue that they may not be able to reduce the industry's environmental impact if they are not given financial incentives to do so. Royal Mail is concerned about this because the Government has indicated that it may impose strict regulations on the bulk mail industry if it does not clean up its act. One of the alternatives for self-regulation by the industry suggested by ministers is the introduction of a central opt-in scheme for unsolicited mail. Royal Mail argues that such a measure would make it impossible for the company to offer a 'one-price-goes-anywhere' service.

Rather than reducing bulk mail volumes, the industry is aiming to make junk mail greener. The voluntary PAS 2020 standard, which was introduced in January this year, requires mail houses to use more environmentally friendly paper, to improve the targeting of addressed junk mail and to encourage consumers to recycle their junk mail.

The Direct Marketing Association, which commissioned the PAS 2020 code, is concerned that many bulk mailers will ignore the voluntary standard and continue to do business as usual. In its response to Postcomm's consultation on Sustainable Mail, the Direct Marketing Association wrote:

"Although some organisations will still comply with PAS 2020 because of corporate commitments or because they believe that it is the right thing to do many will either delay or decide not to comply unless there is something – like Sustainable Mail – that will mitigate the additional cost.

"Without the financial incentive of Sustainable Mail fewer organisations will take up PAS 2020 and even those that do will take longer to comply without a 'carrot'. This, as outlined above, could result in further regulation of direct mail (and, of course, regulation that is imposed is often more demanding than voluntary regulation)."

The Mail Competition Forum, which represents Royal Mail's commercial competitors, objected to the discount for Sustainable Mail. In its response to the consultation it argued that Royal Mail should not be allowed to offer a discount for Sustainable Mail because it is essentially the same products as what can now be called 'unsustainable' mail. Instead, the Mail Competition Forum would like to see that existing ISO standards concerning the environment are promoted within the industry.