2021 saw a flurry of activity from telecoms operators to promote greater sustainability. Of nearly 100 initiatives we’ve tracked, most relate to reducing the sector’s own carbon footprint, but there are also actions to foster the circular economy and to increase the wider adoption of renewable energy.
Operators are meaningfully embracing the race to net-zero, and are striving to reach this goal far sooner than the global deadline of 2050. Their objectives for scope 1 and 2 emissions appear easier to reach than scope 3, given their control over these types of emissions. Scope 3 continues to be hard to eliminate, and could yet require some form of regulatory intervention.
In total, the operators we’ve tracked emitted nearly 43m tonnes of CO2e in 2020. Of these, scope 3 emissions accounted for 29m tonnes of CO2e. Once operators reach their net-zero targets, they will have avoided these emissions almost in their entirety. Most are planning to achieve their plans by 2040 at the latest.
With the exception of France, regulators and policymakers could do more to facilitate the sector by sharing best practice and monitoring their progress. At a European level, the EC will make proposals for a right to repair in 2022, but has otherwise so far been relatively silent. The incoming French presidency could change things.
Initiatives promoting greater sustainability are coming thick and fast
Telecoms operators have meaningfully started embracing sustainability as part of their business models. In the year of COP26, the conversation about climate change became a top priority in the public discourse, and goes beyond the targets set by world leaders for the next decades. As citizens become increasingly mindful of climate change, businesses too have recognised the importance of playing their role in reducing carbon emissions, partly because consumers are keen to reward virtuous behaviour.
Since we launched our Sustainability Tracker earlier this year, we’ve seen a flurry of activity, and so far, have identified almost 100 initiatives. The majority come from telecoms operators (76), followed by network vendors (5) and tech companies (4). Most of the initiatives relate to the reduction of an organisation’s carbon footprint (58). There are also an increasing number related to fostering the circular economy (17) and increasing the use of renewable energy (11). We’ve also tracked regulators’ initiatives to monitor the industry and facilitate best practices in the sector (a total of 7 initiatives).
Scope 3 emissions are the most significant obstacle on the path to net-zero
Perhaps the most striking thing that has emerged so far is that telecoms operators are striving to reach net-zero ahead of the global 2050 deadline. So far, we’ve tracked more than 50 initiatives from operators aiming to reduce their respective carbon footprint. All the operators we’ve tracked have set net-zero targets for their scope 1 and 2 emissions to be reached by 2040 at the latest. 5 out of 14 operators or groups have set their scope 1 and 2 targets for 2030, Another 5 operators are being even more ambitious and will get there as early as 2025. In several cases, operators have revised these targets and brought them forward (BT, Deutsche Telekom, and Vodafone have all recently made announcements to that effect). European groups are the most active, but they are not alone in this. In South Africa, MTN is committing to net-zero by 2040, and set an interim target to reduce emission by an average 47% across scope 1, 2, and 3 by 2030. In the US, AT&T set a target for 2035 to reach net-zero across its scope 1 and 2 emissions.
Scope 3 emissions continue to be the hardest problem for operators to solve. These are the emissions for which operators are not directly responsible, since they originate from operators’ supply chain. They also tend to make up a significantly higher total than operators’ scope 1 and 2 emissions (e.g. almost five times as much in the case of Vodafone, or 11 times as much for BT). This is reflected in the fact that operators’ net-zero targets for scope 3 emissions are often set for later dates – this is the case for 8 out of 14 operators. BT and Vodafone both aim to reach their target in 2040 – 10 years later than their scope 1 and 2 net-zero target. Telefonica set the same date, which will be 15 years after reaching net-zero for scope 1 and 2 emissions. If these targets are met, many of the largest operators in the telecoms sector will reach net-zero across their entire value chain ahead of schedule. However, not all the operators will be able to get there much earlier than 2050. For example, Iliad in France is expecting to reach the scope 3 target just in time for the global net-zero deadline. Some operators have recently suggested that regulation might be needed to speed things up and put pressure on suppliers. It will be important to create ‘network effects’ and encourage businesses to take swift action.
By reaching net-zero, operators are on track to save more than 40m tonnes of CO2e
In total, scope 1 and scope 2 emissions of 12 operators we’ve tracked were 13.9m tonnes of CO2e in 2020. Scope 3 emissions were significantly higher – about 29m tonnes of CO2e. This means that, by the time these operators achieve their net-zero targets, they can save up to 42.9m tonnes of CO2e compared to 2020 levels. Some of these emissions will not be avoidable and will have to be compensated through carbon offset initiatives. However, in the net-zero commitments this is inherently considered as a last-resort option, which should account for only a small percentage of these emissions.
Operators are encouraging the repair and recycling of devices
There is a growing attention in the sector towards the so-called ‘circular economy’. In particular, operators and tech companies are increasingly helping customers in repairing and reusing their devices when possible, rather than pushing them to replace them immediately. Of the 17 circular economy initiatives we’ve tracked, 9 relate to repairing or reusing devices. Orange is rolling out a repair service, aiming to cover all European countries where it operates by 2025. Vodafone recently launched a Repair Lab in Ireland, and Apple is now making it easier for customers to obtain parts and tools to complete their own repairs. There has also been noteworthy collaboration between some large operators (Deutsche Telekom, Orange, Telefonica, Telia, and Vodafone). The five operators launched a labelling scheme which assigns a score out of 100 to the sustainability of each device, focusing on durability, repairability, recyclability, climate efficiency and resource efficiency. The scheme initially launched in 24 European countries, and during 2021 has already extended to South Africa and Brazil. It includes 150 models of phones – more than twice as much as those rated at launch. Some operators are also setting objectives to reuse materials in their networks and reduce or eliminate waste (KPN, Telia, Vodafone).
Increasing the use of renewable energy is another area in which businesses are committing to improve. Of the 11 initiatives we’ve tracked, 8 come from operators who pledge to achieve a partial or full switch to renewables in the coming years. Some operators have already achieved a full switch (Deutsche Telekom, Virgin Media, Vodafone) whereas others will get there more gradually. For example, Orange will achieve a 50% share of renewable energy across the entire group in 2025.
Regulators could do more to help the sector achieve its objectives
While regulators are paying increasing attention to sustainability, only in France have there been significant steps taken to monitor and assist the steps industry is taking. The regulator Arcep launched a working platform ‘for a sustainable digital sector’, which issued 11 recommendations to reduce networks’ carbon footprint at the end of 2020. During 2021, the platform continued its work to define objectives and indicators for Arcep’s future Green Barometer. This will enable it to collect environmental data from the companies it regulates, and to quantify the environmental footprint of networks and devices. All this work puts them ahead of regulators elsewhere, which are yet to have really scratched the surface. Ofcom in the UK included a report in its 2021/22 plan of work, in which it will consider the role it could play in addressing sustainability within communication sectors. The report has not yet been published at the time of writing.
France is also leading in facilitating the circular economy, with legislation to reduce device waste and introduce a ‘repairability index’ introduced earlier this year. From 2022, telecoms operators in the country will also have to inform consumers of the carbon cost of their digital consumption (e.g. the equivalent in greenhouse emissions of 20GB of data per month). The EU will also take action on this front next year, although the EC’s initiative on the ‘right to repair’ will only be introduced in Q3 2022, and it could take at least a year before it is adopted. Regulators around the world will need to do more to engage on sustainability issues, and should urgently start their work to identify the action they can take to help the telecoms and tech sectors achieve their objectives.
