Decarbonizing the Telco Sector – Game Changer for Climate Transformation

10/13/2022 | Reading time: 5 minutes

The Climate Performance of the telco sector is more relevant than ever. With the increased demand for digital communication, streaming and data storage the telco industry plays a relevant part in the digitalization – and its global climate impact. Telco companies must reduce their own emissions, and have on top the potential to become an decarbonization enabler for other industries.

CHOICE Event #45 set Light on Decarbonization in Telco Sector

In the CHOICE Event #45 Roman Friedrich, Managing Director and Partner at the Boston Consulting Group, shared his view on the upcoming climate risks and potentials of the industry. As well as how the Telco sector can lead climate transformation. Find the most important insights in the following.

CHOICE Event #45: Decarbonizing Telco, with Roman Friedrich.

Climate Impact of Telco Sector today – and in the future

Today, the telco industry accounts for 3-4% of global CO2 emissions, which is about twice that of civil aviation. With global data traffic expected to increase around 60% each year, the ICT industry could be responsible for up to 14% of global carbon emissions by 2040. This means that the telco industry is a huge lever for decarbonization and an opportunity for real change within economy.

Telco Companies can Become Enablers

Did you know that every regular email creates 4g CO2? it triggers energy consumption across interlinked ICT components.

GHG emissions by email send.
GHG emissions by email send.

To be clear: Climate Transformation always starts with reducing the own corporate emissions first. For telco companies – as well as many other industries – this foremost means using renewable energy. Data centres, cloud solutions and communication networks need to run on 100% renewable energy. Investments must also be made in the construction of new plants and more efficient infrastructure.

But it does not stop here. In addition, telcos have the opportunity to help other industries become more energy efficient. By offering smart climate solutions, telcos enable other industries to reduce emissions on a far greater scale than their own emissions. By factor 10 potentially. For example by replacing physical carbon heavy products and activities with virtual low carbon equivalents. The four dimensions: Costumer Enablement, Circularity, CO2 intensity and Sustainability Commitment are major factors for the telcos climate performances. Activating all four dimensions hold the potential to decrease costs and risk, while increasing business opportunities. In B2B and B2C – as the market shows an urgent request for positive climate impact. Consumers are willing to pay 10% more for sustainable products and shareholders are more likely to invest in companies driving climate transformation successfully .

Making Climate Performance a Strategic Priority

Many telco companies already act on this opportunity. Future-oriented businesses understand the potential behind climate-compatible operations. Telco operators, as relevant segment within ICT, have within the last five years constantly increased their commitments to reduce emissions along Scope 1-3. Thereby, most of their emissions are created in the supply chain. Mainly through “Use of sold Products” (Scope 3: Category 11) and “Purchased Goods and Services” (Scope 3: Category 1).

Climate-compatible operating therefore requires to aligning organizational goals with those of a low carbon economy. And especially to engage with suppliers to drive decarbonization. This implies a shift in mind set. Away from perceiving climate-compatible purchasing as a cost-driving factor, towards using it as enabling factor to drive innovation, risk reduction and climate impact.

Climate Pioneers set Examples for Supplier Engagement

Focusing on Supply Chain Decarbonization, THE CLIMATE CHOICE supports industry leaders and their suppliers to collaborate on the Scope 3 Challenge.

Learning together with Industry Leaders

To drive meaningful climate actions, a standardized data collection is necessary. In order to decarbonize their supply chain, companies need a comprehensive overview of the climate performance of their most relevant suppliers. Doing so, information along the five dimensions: Climate Governance, Strategy, Risks & Transparency, Metrics & Targets and Decarbonization Measures are essential. As part of a partner program together with O2 Telefónica, THE CLIMATE CHOICE was able to provide with its Climate Intelligence Platform a structured and scalable system to obtain, streamline and mange climate-related supplier data. Find more insights on this specific case study here.

Whats are the essential steps for supply chain engagement on decarbonization?

Data Analysis

1. Data Analysis 

Via a centralized software platform, THE CLIMATE CHOICE enables to gather climate-relevant data in high quality from numerous suppliers. This builds the data foundation to identify the relevant levers within a company’s own supply chain.

Supplier Engagement

2. Supplier Engagement

Decarbonization is no one-way street! It needs collaboration and full transparency. In the Climate Intelligence Platform suppliers receive individual reports in form of a Climate Scorecard, benchmarks on risks and opportunities as well as concrete suggestions for improvements. Sharing these results with suppliers is essential to share the advantages of a successful climate transformation with all stakeholders.

3. Decarbonization 

The collected primary supplier data serves as baseline for the ongoing decarbonization journey. It helps to translate ambitious climate targets into individual reduction roadmaps and climate actions. Moreover, it allows to track the effectiveness and success of different measures over time.

Conclusion: Telco companies anticipate change. They put in place meaningful strategies and work on increasing their climate performance across supply chains. Moreover, they can save costs and win new customers by truly focusing on sustainability. It’s time to lead the market as Climate Champion and strive towards a low carbon economy together.

You are interest in supplier engagement for decarbonization and want to know more about how to collect primary supplier data? We invite you to book right away a demo with us!