Market Wisdom

Sustainability in Telecoms. Mission (im)possible?

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One of the most important lessons society has learned from being stranded at home and unable to travel during a pandemic, is that once carbon emissions fall, the benefits materialize remarkably quickly. What have telecommunications providers learned during this time? That due to the staggering demand for digital communications at this time, the global telecom infrastructure has been forced to consume more energy than ever before, increasing the carbon footprint.

 

In addition, as consumers become more conscious of their impact on the global environment, the demand for more sustainable goods and services is stronger than ever. With this in mind, telecommunications companies are rolling up their sleeves and getting to work in order to reduce their environmental impact. But is achieving sustainability in telecoms a realistic mission?

Negative environmental impact of telecoms

Although the telecommunications industry is not the first to come to mind when discussing emissions or greater sustainability, this sector does account for a substantial portion of global carbon emissions. According to the European Telecommunications Network Operators (ETNO) Association, the telecommunications industry produced 2.6% of the total world carbon dioxide (CO2) emissions in 2020. In comparison, the global civil aviation industry accounts for around 2% of all human-caused CO2 emissions.

 

Personal devices account for the majority of the carbon footprint of the telecommunications business. About half of device-related emissions are related to direct energy consumption, whereas the other half are associated with device life cycle. The second highest emission contributors in the telecom industry are networks and data centers.

 

Furthermore, electronic waste is a massive global problem. According to the United Nations, 40 million tons of electronic garbage are created each year, with up to 80% of that material ending up in landfills. Many telecommunications gadgets end up as electronic garbage – mobile and desk phones, SIM cards, cables, batteries, and other equipment are frequently in use for only a few years.

What can telcos do to address environmental issues?

In terms of emissions, the objective should be a carbon-neutral economy. In terms of waste, the goal is a “circular economy”, which is founded on the ideas of reducing waste and pollution, reusing products and resources, and renewing natural systems.

 

Emission reduction may be accomplished by combining renewable energy with energy efficiency that outpaces corporate development. Renewable energy is an important technique for reducing emissions, even if it is not a perfect answer in all markets, having disadvantages in terms of market availability and service fluctuations.

 

Other possible activities include technological innovation and product development, material, packaging, and waste management, establishing metrics, standardization, renewable energy promotion, product recycling and contributing to the circular economy.

 

To become more eco-aware, a telecom company must match its organizational goals with those of a low-carbon economy and adopt a sustainability strategy capable of meeting those goals. For that purpose, telecom operators should explore the five actions outlined below.

  • Step 1: Consider sustainability in terms of value creation and investment, which can result in cost savings and new income through energy efficiency, greater market valuation, and other unique business prospects evolving due to  sustainability.
  • Step 2: Assess their present emissions and circularity to provide a reliable baseline, and evaluate their complete product range, estimating the pollution abatement impact of each solution in the portfolio.
  • Step 3: Comprehend the real processes that contribute to that baseline and identify leverage points. There are 4 main emission strategic actions and priority interventions (levers) and around 150 levers in total that are considered to be relevant for telecommunications.
  • Step 4: After identifying the value case, existing baseline and improvement levers, a telecom company should create clear actionable objectives for each stage in the value chain.
  • Step 5: After completing the preceding phases, telcos must implement the strategy and establish governance, which entails translating targets into specific business unit objectives and assigning functional tasks and accountability.

Telecom initiatives to reduce carbon footprint

Telecom companies already use more renewable energy than other businesses on average, and several have already stated their intentions to become carbon neutral or have pledged to use 100% renewable energy. The goal of carbon neutrality is based on a strategy that varies by operator, but follows a similar pattern: reducing carbon emissions by increasing energy efficiency and using renewable energy, and creating a circular economy by recycling, refurbishing, remanufacturing, or reusing equipment, as well as carbon offsetting practices.

 

Furthermore, the scope of telecoms’ sustainability extends well beyond that of other businesses. Since 2019, the GSMA has acknowledged the telecoms sector as a significant facilitator in solving climate change concerns. This organization also established emission reduction goals to enable the wireless sector to achieve net-zero emissions by 2050.

 

In Europe, the telecoms industry unveiled a science-based plan to reduce carbon emissions. This program comprises emissions reductions for mobile, landline and data center operations that are aligned with the Paris Climate agreements, the main goal of which is to keep average world temperature increases below 1.5°C. This restriction is designed to lessen the likelihood of catastrophic climate change effects.

Conclusion

As the need for environmental sustainability grows, the telecoms industry must begin to incorporate sustainability considerations into their daily business choices in a systematic and thorough manner. Given the upside potential of these far-reaching proposals, telecom operators should embrace climate change mitigation initiatives wholeheartedly. Aside from the environmental benefits, we believe that such positive initiatives will have a direct and meaningful impact on consumers, staff and company shareholders.