T+1 and the Environment: What a Shorter Settlement Cycle Does and Doesn't Change
Updated October 2026, with a correction. First published March 2024.
The first version of this post estimated that T+1 would save about 3,000 metric tons of carbon dioxide. The figure added up assumptions with no sources behind them: 10 million paper trades a year at five pages each, 500,000 miles of delivery trucks, a 10% efficiency gain in data centers, fewer commuting days, and less office food waste. We've removed those numbers. We couldn't find a study that measures any environmental effect of the move to T+1, and the SEC's adopting release doesn't analyze one.
What T+1 Changed
T+1 cut the time between trade and settlement from two business days to one. The SEC estimated that this would roughly halve the value of trades waiting to settle at NSCC, from nearly $88 billion to about $44 billion at mid-2022 volumes. After go-live, NSCC's clearing fund averaged $9.8 billion, $3.0 billion less than in the three months before, according to the T+1 After Action Report. Those are changes in risk and capital, covered in The Case for T+1. Nobody has shown that they change paper use or energy use.
What It Didn't Change
It didn't change paper confirmations. The SEC considered whether T+1 required changes to how trade confirmations are delivered and decided it didn't. Rule 10b-10 requires a broker-dealer to give or send a confirmation before settlement; it doesn't require the customer to receive it first. "In a T+1 environment, no Commission rule would require the delivery of paper documentation by mail on T+1," the Commission wrote. It also declined commenters' requests to make electronic delivery the default in this rulemaking. A customer who received paper confirmations before May 2024 can still receive them.
It didn't change the policy on certificates either. The SEC has long favored immobilizing or dematerializing securities, since physical certificates add cost and risk to clearing and settlement. The T+1 release restated that view without adding a requirement.
Where Paper Is Left
In the parts of settlement operations we work in, paper mostly survives as letters and forms sent by fax, mail, or email attachment: Letters of Free Funds, 17a-13 confirmations, and prime brokerage agreements. Moving those to structured electronic exchange uses less paper. The stronger reason to do it is operational, because every re-keyed letter is a chance for an error, and that's true with or without T+1.