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BCG Telco Sustainability Index Slide 1 BCG Telco Sustainability Index Slide 2 BCG Telco Sustainability Index Slide 3 BCG Telco Sustainability Index Slide 4 BCG Telco Sustainability Index Slide 5 BCG Telco Sustainability Index Slide 6 BCG Telco Sustainability Index Slide 7 BCG Telco Sustainability Index Slide 8 BCG Telco Sustainability Index Slide 9 BCG Telco Sustainability Index Slide 10 BCG Telco Sustainability Index Slide 11 BCG Telco Sustainability Index Slide 12 BCG Telco Sustainability Index Slide 13
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BCG Telco Sustainability Index

BCG has launched its Telco Sustainability Index, designed to capture the four dimensions most relevant to a telco’s environmental strategy. The index tracks the company’s commitment to sustainability, its emissions intensity and that of its upstream and downstream partners, its elimination of waste, and its customer enablement.

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BCG Telco Sustainability Index

  1. 1. JUNE 2021 BCG Telco sustainability index 2020
  2. 2. 1 Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Telco Sustainability Index: Key insights Overall Observations • Over the last years the TMT sector in general and the telco and tech industry in particular have increased their sustainability ambitions: net zero targets have been pulled forward from often 2050 to even 2035 • The motivation for telco operators is clear: their carbon footprint has exceeded the footprint of the airline industry and will continue to grow with the increased data transportation in fixed and mobile networks if not managed proactively • The historical focus of telco operators has been on scope 1 and scope 2 emissions - now scope 3 is very often focused (i.e. covering the entire supply chain) – two third of all emissions of a telco operator are typically scope 3 emissions • In addition, “scope 4”, i.e. offering digital sustainability services which enable other industry sectors to become more sustainable, are becoming more important • Hence, embracing sustainability is much more of an opportunity for telco operators than a burden – the business potential is enormous! • Even some consumer segments show an increased interest to buy green telco services/products and even paying more for it! • While the business opportunity is obvious, telco operators also need to watch out for liabilities in their balance sheets, i.e. (old) assets that consume a lot of energy – cost of capital will increase and share price will suffer if not managed proactively Findings of this year's telco sustainability index • In 2020, performance of top scorer improved further, while bottom scorer had no overall improvement • European telcos maintain sustainability index leadership • However, significant improvements can be observed in North America as well • Main driver for 2020 sustainability improvement were the announcement of new targets – execution is still open • While the best telco operator has reached two thirds of the best possible score, on average the telco industry has not even reached the 50% mark! • Enabling other industries to become more sustainable is still the most neglected dimension
  3. 3. 2 Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Sustainability in Telco Index: 4 dimensions Commitment to sustainability CO2 intensity Customer enablement Circular economy
  4. 4. 3 Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG Telco Sustainability Index covers 20+ telcos across regions Europe Europe & Other (if international units 20%+ revenue) North America Asia & Middle East
  5. 5. 4 Copyright © 2021 by Boston Consulting Group. All rights reserved. BCG SiT grades based on comprehensive set of indicators • Targets • Culture • Transparency & Reporting • Sustainable sourcing Commitment to sustainability • CO2e intensity – scope 1 & 2 emissions • Energy intensity • Energy sourcing • CO2e intensity – scope 3 emissions CO2e & energy intensity • Waste intensity • Recycling • Collection of end-user devices Circular econo- my and waste • Carbon abatement factor / Enablement factor • Green initiatives • Green R&D expenditures Customer enablement Dimension Indicators
  6. 6. 5 Copyright © 2021 by Boston Consulting Group. All rights reserved. 0 16 70 0 In 2020, performance of top scorer improved further, while bottom scorer had no overall improvement Source: BCG Sustainability in Telco Index 2020, N=21 Overall score Commitment to sustainability CO2 & energy intensity Circular economy & waste Customer enablement 67 17 13 17 62 58 33 53 64 30 10 61 95 25 32 24 45 51 75 0 94 0 49 43 38 100 0 Median Top scorer 2019 Other companies Top scorer (Overall score) Bottom scorer (Overall score) Bottom scorer 2019 Copyright © 2021 by Boston Consulting Group. All rights reserved.
  7. 7. 6 Copyright © 2021 by Boston Consulting Group. All rights reserved. - - - - - European telcos maintain sustainability index leadership 14 30 24 33 40 34 35 33 55 50 42 62 23 30 32 34 43 44 49 60 21 34 36 41 43 51 51 51 60 63 66 10 20 30 40 50 60 70 36 29 Total score 38 17 67 17 29 18 47 29 36 32 36 26 30 37 34 47 57 53 55 57 47 58 59 58 62 2020 2018 2019 Asia & ME North America Europe Europe & other Source: BCG Sustainability in Telco Index 2020, N=21
  8. 8. 7 Copyright © 2021 by Boston Consulting Group. All rights reserved. Largest improvement in total score came from European and North American telcos in 2020 10 20 30 40 50 60 70 Total score 2018 2019 2020 2020 with new category Asia & ME North America Europe Europe & other Source: BCG Sustainability in Telco Index 2020, N=21 In 2020, "Commitment to sustainability" dimension was changed to incorporate more detailed view on culture & governance
  9. 9. Copyright © 2021 by Boston Consulting Group. All rights reserved. 8 On average, telcos in North America improved the most in 2020 46 44 29 27 50 51 31 28 55 55 37 31 Europe North America Europe & other Asia 2020 2018 2019 4 7 2 1 5 4 6 4 Asia Europe Europe & other North America 2020-19 2019-18 Overall score Overall score Δ Source: BCG Sustainability in Telco Index 2020, N=21 In 2020, "Commitment to sustainability" dimension was changed to incorporate more detailed view on culture & governance. For comparison purposes, 2020 score here using old methodology
  10. 10. 9 Copyright © 2021 by Boston Consulting Group. All rights reserved. 4 7 -1 2 4 3 2 8 5 6 8 3 6 1 6 6 9 8 3 -1 4 4 7 -3 4 3 3 6 0 Targets Transparency & Reporting Overall score Culture Sustainable sourcing CO2 & energy intensity Circular economy & waste Customer enablement 22 0 0 North American telcos improved the most on average Average score Δ 2020-2019 Asian telcos still have improvement opportunities in customer enablement, while North American group could improve focus on circular economy & waste Europe Europe & other Asia North America Source: BCG Sustainability in Telco Index 2020, N=21 In 2020, "Commitment to sustainability" dimension was changed to incorporate more detailed view on culture & governance. For comparison purposes, 2020 score here using old methodology
  11. 11. 10 Copyright © 2021 by Boston Consulting Group. All rights reserved. 4 9 3 4 4 2 5 Overall score Targets Culture 1 CO2 & energy intensity Sustainable sourcing Transparency & Reporting Circular economy & waste Customer enablement 2020 score improvement main driver was new targets Average score Δ 2020-2019 ~50% operators introduced new targets for emission reduction (primarily scope 1&2) or for waste reduction CDP rating decreased/ increased for ~25% of telcos each. Detailing of env. data and external assurance has improved for some telcos Integration of sustainability in supplier selection improved for ~30% of telcos Energy use / emissions over IP traffic criteria has improved for 80% of telcos due to increasing traffic, while emissions / energy over customers only improved for 30-60% Waste over IP traffic indicator increased for 65% of telcos, while waste over customers only for 35%. Mobile phone collection indicator decreased for 30% of telcos, improved only for 20% Green initiatives & R&D expenditure improved for ~25% of telcos, 10% of telcos improved cust. enablement reporting In 2020, "Commitment to sustainability" dimension was changed to incorporate more detailed view on culture & governance. For comparison purposes, 2020 score here using old methodology Source: BCG Sustainability in Telco Index 2020, N=21
  12. 12. 11 The services and materials provided by Boston Consulting Group (BCG) are subject to BCG's Standard Terms (a copy of which is available upon request) or such other agreement as may have been previously executed by BCG. BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerning these matters. This advice may affect the guidance given by BCG. Further, BCG has made no undertaking to update these materials after the date hereof, notwithstanding that such information may become outdated or inaccurate. The materials contained in this presentation are designed for the sole use by the board of directors or senior management of the Client and solely for the limited purposes described in the presentation. The materials shall not be copied or given to any person or entity other than the Client (“Third Party”) without the prior written consent of BCG. These materials serve only as the focus for discussion; they are incomplete without the accompanying oral commentary and may not be relied on as a stand-alone document. Further, Third Parties may not, and it is unreasonable for any Third Party to, rely on these materials for any purpose whatsoever. To the fullest extent permitted by law (and except to the extent otherwise agreed in a signed writing by BCG), BCG shall have no liability whatsoever to any Third Party, and any Third Party hereby waives any rights and claims it may have at any time against BCG with regard to the services, this presentation, or other materials, including the accuracy or completeness thereof. Receipt and review of this document shall be deemed agreement with and consideration for the foregoing. BCG does not provide fairness opinions or valuations of market transactions, and these materials should not be relied on or construed as such. Further, the financial evaluations, projected market and financial information, and conclusions contained in these materials are based upon standard valuation methodologies, are not definitive forecasts, and are not guaranteed by BCG. BCG has used public and/or confidential data and assumptions provided to BCG by the Client. BCG has not independently verified the data and assumptions used in these analyses. Changes in the underlying data or operating assumptions will clearly impact the analyses and conclusions. Copyright © 2021 by Boston Consulting Group. All rights reserved.
  13. 13. bcg.com
  • YusukeTone

    Oct. 3, 2021

BCG has launched its Telco Sustainability Index, designed to capture the four dimensions most relevant to a telco’s environmental strategy. The index tracks the company’s commitment to sustainability, its emissions intensity and that of its upstream and downstream partners, its elimination of waste, and its customer enablement.

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