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Sustainability in Telecoms


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Sustainability in Telecoms

  1. 1. Sustainability in Telecoms: Reaping the Benefits of Green Dividends Authored by: Sharifah Amirah and Sophie McKechnie “If 2007 was the year when climate change rose to the top of the global agenda, 2008 is the time we th must take concerted action.” - UN Secretary General, 11 February 2008. Preamble ‘Sustainability’: a word we are all familiar with, but one which is a struggle to define. According to the UK government, a widely-used and accepted international definition of sustainable development is: 'Development which meets the needs of the present without compromising the ability of future 1 generations to meet their own needs.' An explanation such as the above may be pithy, but it remains frustratingly vague. The scope of sustainable development is elastic, depending on where, and by whom, it is practiced. At its broadest, sustainable development spans social, economic and environmental spheres; it is these three interdependent pillars which the UN’s Division for Sustainable Development considers within its remit. For the purpose of this report, environmental - as opposed to social or economic sustainability - will be the primary focus. The context of the ensuing discussion is based on the UN’s Brundtland Commission definition, below, where the sustainability equation extends beyond resource consumption and is influenced by wider socio-political and economic agendas. “…sustainable development is … a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are made consistent with future as well as present needs.” Source: Report of the World Commission on Environment and Development, 1987 On this premise, the key thrusts of this study include an overview of stakeholder engagement, a detailed PESTLE analysis, a review of service provider initiatives and a discussion of possible prescriptions, highlighting industry best practices. 1 Sustainability in Telecoms (October 2008) Page 1
  2. 2. One would be hard pressed to deny that the momentum surrounding the climate change agenda has continued to gather pace over the last two years. In the public and private sector, within civil society as a whole, and on an individualistic level, the environment has become a considerable focal point for both debate and action. Of course, the environment (and climate change in particular) is by no means a virgin subject matter. Knowledge of global warming and its affects has been in the private and public domain for decades. One could say that it was in 1970 that the modern environmental movement was born, when the first Earth Day was held and around 20 million Americans took part in peaceful demonstrations across the country. However, the recent ‘rebranding’ of climate change as ‘mankind’s biggest challenge’ is a more novel concept. The suggestion that the hype surrounding eco-sustainability is a passing fad is not entirely unreasonable. (The vision of David Cameron pedalling away on his bike whilst his brogues were driven to work behind him springs to mind.) Indeed, the championing of all things green by A-list celebrities and politicians alike, coupled by a media fuelled frenzy and a not-so-subtle dose of green-washing, is enough to make any cynic question the sincerity of the green agenda. On both a national and international level, spiralling political and media attention have fuelled a heightened awareness of environmental issues. This elevated status, within both political and social spheres, has greatly raised the expectations and pressures placed upon the private sector. In 2007, Frost and Sullivan published a report entitled ‘Technology embracing the Green Religion’. Based on both primary and secondary research, the paper provided an insight into how key European telecommunications service providers were reacting to the environmental challenge. Over the last year, the visibility of telecom’s approach to sustainability has grown dramatically. The more pronounced eco- strategies, and increased availability of quantifiable information has allowed us to compile a more in- depth study on the basis of this new transparency. The rapid evolution of the industry’s approach to sustainability is testimony to the nascent nature of sustainability programmes in the private sector. This is an area which is still very much in the process of being moulded into an integral part of the private enterprise. This research study provides an insight into how far the telecommunications industry has integrated ‘being green’ into its ethos, business practices, and services. The first part of the study highlights the influence of stakeholders in sustainability initiatives. The imperative need for multi-stakeholder engagement is further demonstrated through an extensive PESTLE analysis that provides a holistic view of the multi-faceted eco-equation impacting the telecommunications industry. Given that the service Sustainability in Telecoms (October 2008) Page 2
  3. 3. provider is consistently the main touch point with consumers, an analysis of the sustainability strategies of nine European telecommunication operators will serve as the main body of the report. The selection of profiles serve as an update from last year’s study where several have shown marked progress. Additional operators have also been included in this review based on their commendable sustainability strategies. The service providers selected for review here are: Belgacom, British Telekom, Deutsche Telekom, France Telecom, Swisscom, Telecom Italia, Telenor, Telia Sonera and Vodafone. In conjunction with these profiles, extensive secondary research has been utilised to paint a comprehensive picture of the eco-direction in which the telecommunications sector is moving. Key facets of a sustainable value chain are discussed at the end of this study including a selection of industry best practices. Stakeholders As any CR team is aware, stakeholder engagement is an essential activity for any socially responsible business. In relation to sustainability, the list of drivers for a service provider, or indeed any other party, is long and wide-ranging. Chart 1.1 illustrates the sectors in which stakeholders can be found, and in turn, the key drivers behind a service provider’s sustainability strategy. Chart 1.1. Sustainability in Telecoms : Stakeholder Prioritisation Source: Frost & Sullivan, 2008 Sustainability in Telecoms (October 2008) Page 3
  4. 4. As the diagram reflects, the importance placed upon each stakeholder by the service provider is never equally spread. If one takes a step back from the nuances of individual organisations, a number of broader observations are worth making. In general, shareholders, employees, consumers and immediate suppliers are consistently valued as central stakeholders due to their direct investment in a company. Alongside these, legislative bodies on a national and international level hold considerable sway because of the regulated nature of the industry. As representative bodies, (often of wider societal issues which lack individual champions), NGO’s and lobby groups are an increasingly important point of call for open-dialogue discussions. Furthermore, as the prevalence of sustainability continues to grow, so too will the influence of internal regulatory bodies. The explosion of industry associations in the last few years, such as the Global e-Sustainability Initiative (GeSI) and the Carbon Trust, has also greatly contributed to the growing pressure for mutual accountability from within the industry. Of course, depending on the dynamics of the home environment, different factors are prioritised on different levels. A cross-country comparison between Germany and America serves as a telling example of such variation. Despite being the ultimate ‘green villain’ of the developed world, eco credentials in America are only just beginning to feature as important criteria for consumers and employees. In contrast, in Germany the level of public awareness is such that it is more or less embedded into business practice. In addition, stakeholders themselves are not one homogenous body with the same issues of concern. Engagement with stakeholders in such a multifaceted way brings with it a number of questions and conflicts of interests. The industry is influenced by the binary trajectories of broader objectives vs. specific goals, local interests vs. global implications, and enterprise vs. individual actions. Further, cultural and localised variables need to be taken into account as a wider social ‘revolution’ underpins behavioural change. A somewhat extreme, anti-capitalist yet valuable perspective of this is well captured by Serge Latouche’s concept of ‘decroissance’ or de-growth. While centralised commitments are necessary, the emphasis remains on local, self-sufficient sustainability initiatives. There is also a further issue of the ‘silent majority’ and ‘stakeholder fatigue’ which tends to be left un- addressed. If one takes a step back from the nuances of individual organisations, a number of broader observations are worth making. In general, investors, employees, consumers and suppliers are consistently valued as central stakeholders due to their direct investment in a company. Alongside these, legislative bodies on a national and cross-country level hold considerable sway because of the regulated nature of the industry. As representative bodies, (often of wider societal issues which lack Sustainability in Telecoms (October 2008) Page 4
  5. 5. individual champions), NGOs and lobby groups are an increasingly important point of call for open- dialogue discussions. Furthermore, as the prevalence of sustainability continues to grow so too will the influence of regulatory bodies. Best practices, in terms of industry engagement; supplier forums, industry events, internal campaigns, long term self-sufficiency as well greater transparency in CSR reporting are increasingly prevalent in sectors with consumer proximity, such as financial services and the entertainment industry. Such benchmarks, combined with greater industry pressure, are, over time, likely to widen the discrepancy between stakeholder expectations and organisational performance. Henceforth corporations are likely to be persuaded to implement measures in redressing the imbalance. The varied and, at times, conflicting levels of stakeholder interests demand a multi-pronged approach to pursue the ‘eco-challenge’ from all corners. The following PESTLE analysis will demonstrate the circle of external developments, held together by social and environmental concerns, which currently permeates the telecommunications sector in Europe. PESTLE Analysis As described earlier, a review of any sustainable framework calls for a holistic analysis of the wider forces that influence the individual, enterprise and state. The objective of the analysis below is to demonstrate the critical need for such analysis rather than to serve as an exhaustive discussion, which unfortunately is beyond the scope of this study. Political Over the last few years, sustainability has risen to new heights on the political agenda. Where concern for the environment was once accepted as the preserve of well-to-do ‘eco-warriors’, it has fast emerged into a prerequisite for any political party wishing to maintain momentum and grassroots support. ‘Ecological wisdom’, one of the foundational principles of Green politics, is no longer merely a principle laid claim to by Green Parties in the face of hostile opposition. Across the board, political parties of every calibre are hoisting the green flag – and then waving it madly. Whilst voters are beginning to rate parties based on their green policies, politicians are using climate change to identify potential new taxes and revenues. Green taxes, such as those on 4X4’s (fondly known as Gas Guzzlers), plastic bags and other consumer goods are gradually become standard practice in most European countries. The UK, for example, has introduced the Climate Change Levy (CCL), a tax on the use of energy in industry, commerce and the public domain, which also allows tax rebates to be granted (via the Climate Change Agreement Scheme (CCAS).) Alongside this, governments are issuing guidelines for businesses and Sustainability in Telecoms (October 2008) Page 5
  6. 6. citizens alike, showing an increased attempt to drive material and behavioural change. The UK government’s Energy Efficiency Best Practice Programme (EEBPP), for example, provides information on energy efficient technologies and techniques and has developed product standards labelling. Other regulatory regimes being explored include taxes on goods produced in high carbon emission countries as well as penalties on excessive carbon emissions, based on pre-defined quotas. The latter tends to be in relation to the Kyoto Protocol, which in itself is an endemic source of political quagmire. Financial speculators and environmentalists alike await with bated breath the outcome of the post-Kyoto meeting in Copenhagen next year. It is almost unavoidable that critique and scepticism from the media and some sectors of the public will rise as the impacts of ‘green’ measures continue to be felt. For example, a research study conducted in April of this year found that two-thirds of Britons think the entire green agenda has been hijacked as a 2 ploy to increase taxes. Consequently, as governments assume an increasingly interventionist position, the necessity for their internal bodies to ‘walk the talk’ will grow concurrently. Amid general calls for transparency within the public and private domain, it is internal operations that will be increasingly subject to scrutiny. With the green agenda positioned to become a permanent fixture rather than a passing fad, governmental bodies are aware that they can not afford to be subject to charges of hypocrisy; they must practice what they preach. Within the public sector, changes are already occurring, and the telecoms sector has the opportunity to capitalize upon these changes. Economic The economic climate holds a decisive influence over the import attached to sustainability. Crudely put, richer countries are able to afford the time and money needed to develop a comprehensive sustainability strategy. The investment of the private sector, in combination with a weighty governmental budget, provides the basis upon which government can reform its own practice and push issues surrounding sustainability into the public psyche. This dependence on financial investment begs an important question: does a downturn in the economy bring with it a green recession? The argument that green issues will be overlooked in the face of economic crisis is somewhat negated by the nature of green investment itself. Of course, it will not be immune to economic downturn, but it is here to stay in the long term. The financial community recognises that ‘green’ represents a substantial 2 The research was conducted online amongst 2,002 adults by Opinium Research LLP between 11 and 14 April Sustainability in Telecoms (October 2008) Page 6
  7. 7. investment opportunity, not just an ethical choice. The anxieties surrounding energy sources most obviously exemplify this. From a more capitalist perspective, the concerns over energy prices, trade deficits, and energy shortages caused by peak oil, clearly enhance the enduring value attributed to sustainable resources. In all, economics remains at the heart of the financial sectors’ engagement with green initiatives and it is this that will ensure that the attention paid to sustainability is not just a transient privilege enjoyed when national economies are feeling secure. The financial sector’s part in the pricing of carbon is the most overt indication of its long-term role in the climate change challenge. Like anything else, carbon reduction is only able to be given the same level of importance if it is subject to a cost-benefit analysis. The UKs ‘Shadow price of carbon scheme’ is a most recent example of a government’s attempt to implement a uniform way of measuring its internal carbon emissions and (eco) opportunity cost of public sector projects. The direction in which the financial sector is moving with respect to carbon credits, indices, and auctions will be discussed in more detail towards the end of this paper. Furthermore, the market for “green” products and goods, ranging from eco-fashion to eco-finance, is rapidly expanding. Indeed, last year a total of clost to €100 billion was invested worldwide in clean 3 energy alone, and shares in solar companies on the NEX index rose by a staggering 163%. The assessment in the Stern Report, that the market for environmental products and services would reach $500 billion a year by 2050, provides some indication of this trend. And the financial sector is not exempt from this; a range of “green” financial services, such as socially responsible banks, investment funds, mortgages and ISAs are emerging -perhaps the latest extension of the fair-trade, organic niche? Our current analysis of share prices across leading European telecommunications service providers reveals little sensitivity and minimal co-relation to the company’s environmental performance. We do however expect this to change, particularly as indices such as the Dow Jones Sustainability Index and the FTSE4Good begin to take centre stage. Social With respect to goods and services, the relatively new value attached to ethically (as opposed to just environmentally) sound products shows no sign of diminishing. One can buy solar powered shavers, bio-degradable flip-flops and even eco-friendly coffins -the list is endless. In the UK alone sales of 4 organic food, cosmetics and clothes reached 2 billion pounds sterling in 2007. Whilst those fuelling this 3 4 Ibid Sustainability in Telecoms (October 2008) Page 7
  8. 8. eco-friendly consumerism could be accused of buying into the hype, their interest in eco credentials is symptomatic of a shift in mindset, a change that holds much more longevity. It is not only the purchasing of products, but their use which is being paid more attention by the ‘movers and shakers’ within society. In other words, behavioural change, as well as material consumption, is being targeted. Washing at 30°, flushing the toilet when you really need to, abstaining from filling the kettle to the brim; minimising the impact of human activity is the take-home message of the day. Currently, it seems that everyone is jumping on the sustainibility band-wagon and, in the process,raising the public’s awareness of the issues at hand. It was only a couple of months ago (July) that Gordon Brown was calling on Britons to stop wasting food after a government report suggested that they were 5 throwing away groceries worth more than £1 billion a year, an average of £420 a year per family. At the other end of the scale, one social networking site (Facebook) has created ‘greenbook’, a novel way of raising the profile of humanity’s carbon footprint, although the actual effects remain to be measured. The application encourages users to share green ideas and doles out individual amounts of ‘CO2 removal’ credits to members on a daily basis. In this way, the site uses the company’s carbon reduction credits it has previously generated through sponsorship to engage with their members.) In general, environmental and social responsibility on the part of enterprise, government and the wider community is becoming an expectation rather than an asset. Over the last decade Coroporate Social Responsibility (CSR) has grown into an integral part of most companies’ infrastructue. For instance, every operator profiled in this study had a link to an extensive CSR section on the homepage of their websites, a scenario which would not have existed previously. Moreover, the demand for eco- professionals is growing; the number of climate change specific jobs has grown by nearly 200% in the 6 last 12 months. It has become a prerequisite for telecommunication companies to have a comprehensive strategy relating to their social obligations, a development which is already beginning to be emulated where eco-sustainibility is concerned. From a social psychology perspective, behavioral change will need to take place en masse before we see a shift in consumer patterns towards more sustainable products and services. Several social scientists have fallen back on Maslow’s hierarchy to argue that individuals who are closer to the top of the pyramid, i.e. achieving self actualisation, will have a greater tendency to be more environmentally conscious – as one becomes less obsessed with material wealth and takes a more altruisic approach to life. Based on the general notion that self-actualisation is a function of wealth, patterns in Scandinavia 5 6 Acre Resources, 2008 Sustainability in Telecoms (October 2008) Page 8
  9. 9. support the hypothesis that sustainable consumption bears a strong correlation to self-actualisation. However, this argument is defeated when one looks across the pond to the United States of America; being one of the richest nations in the world and also one of the biggest polluters. In both instances, one thing is consistent: adopting a more sustainable lifestyle can be costly as eco-products and eco- services tend to bear a higher price tag. Technological There is growing awareness that technology can act as a powerful enabler of greener living. Evidently, the carbon footprint from the ICT industry cannot be mitigated completely. However, ICT has the opportunity to engage with ‘sustainability’ in a much more positive way than any other business community. Recent Industry research has estimated that the potential saving enabled by ICT-lead initiatives could be as much as 15% of total global emissions by 2020, delivering energy efficiency 7 savings to global businesses of over 500 billion euros. The idea that technology can aid companies and consumers alike to ‘go green’ has already been harnessed by a number of vendors and operators (as detailed in profiles below). IBM, for example, is heavily involved in supporting nuclear systems design and implementation, solar technology innovation, and water management. For instance, in the latter field, the use of real-time monitoring technology, data analytics, and next generation content delivery provides innovative access to environmental information. As a whole, the ICT industry is well placed to facilitate carbon emission reduction, and contribute to the introduction of clean technology. Nonetheless, the room for growth within the ‘sustainability’ sector has to be exploited with caution. In order to capitalise upon the opportunities presented by the desire to be green, growth has to be reconciled with impact. The rolling out of existing services in emerging markets, and the development of new ones, has to be counterbalanced by a visible and long-standing commitment to sustainability. It is only via this strategy that ICT will be perceived as a valuable enabler of sustainable development. Legislation One of the most consistently important drivers for greener behaviour is legislation. On a national, European, and global level, a plethora of voluntary and mandatory agreements provide coherence and direction for sustainability efforts. Today, the ICT sector accounts for approximately 2% of the worldwide 7 McKinsey Report, ‘SMART 2020: enabling the low carbon economy in the information age’, sponsored by GeSI and The Climate Group. Sustainability in Telecoms (October 2008) Page 9
  10. 10. 8 energy consumption and related CO2 emissions, a figure estimated to grow to 3% by 2020. As a regulated industry, and a substantial contributor to most countries’ carbon footprint and energy usage, ICT and telecoms are unavoidably implicated by any country or cross-country goals set. In 2007, EU members entered into a binding target stipulating that 20% of the EU’s energy consumption will come from renewable sources by 2020. Moreover, the ‘Lisbon Agenda’ stipulated that telecommunications would be required to play a role in reaching the targets set. These goals are not mere gestures but ambitious in their aims; the European Commission suggested that the UK for example should increase their renewable resources from 1.5% to 15% by 2020, an objective requiring a concerted effort from all sectors. Perhaps more effective catalysts of change than longer-standing treaties like the Kyoto protocol, these new specific targets are pushing governments (and, by extension, enterprise) to actively respond to wider environmental and social concerns. Environmental Global warming, climate change, the greenhouse effect - whatever you want to call it, and whatever the cause, it is happening. Chart 1.2. The Reality of Global Warming Source: UN HDR 2007, CDIAC 2007; IPCC 2007 . 8 Ibid Sustainability in Telecoms (October 2008) Page 10
  11. 11. As Lord Stern stated: “The balance of scientific evidence points clearly to the need for all countries to plan credible emissions reduction policies now, if mankind is to avoid substantial risks to future 9 generations.” In light of this, the question still remains: how far should ICT shoulder the blame for mankind’s environmental faux-pas’? According to the Stern report, within the ICT sector C02 reduction 10 of ~ 10% p.a. until 2050 is required to keep us in a ‘sustainable state’ . This estimate is not without reason; whilst the industry’s contribution may be as low as 2%, the impact on daily lives, particularly in increasingly digital societies, is as high as 50% (ITU, 2007) Chart 1.3 Global Annual CO2 Emissions – Past, Present and Future Source : Adapted from the Garnaut Climate Change Review, 2008 It is clear from the above diagram that annual global emissions under a ‘‘business as usual’’ model are not an option. As the following profiles display, across the board the European telecommunications sector is becoming evermore aware of this, and responding positively, albeit driven by varying ulterior motives. Eco-Drivers in Europe – Telecommunication Service Provider Profiles The following section profiles the sustainability strategies of a number of leading European operators. These are based on primary interviews and information made available in CSR reports and company 9 Nicholas Stern ‘Key elements of a Global Deal on Climate Change’, May 2008. 10 Ibid Sustainability in Telecoms (October 2008) Page 11
  12. 12. websites. The profiles demonstrate the degree to which telecoms has already adopted the mantle of sustainable development, and provide an indication of the direction in which the industry is moving. All nine service providers profiled demonstrated a fairly extensive, albeit still evolving eco-strategy, largely premised on CSR. In terms of motivation, the companies profiled shared a number of commonalities. Most notably, it is clear that European service providers value cost savings – through operational efficiency (alongside legislative compliance) as a key driver behind eco-sustainable strategies. Whilst the pressures employed by stakeholders are important, potential OPEX savings and commercial opportunities are consistently acknowledged as fundamental eco-drivers. As Vodafone states within the first paragraph of 11 its “Environment” section: “there is a clear business case for good environmental management.” Chart 1.4. Key Eco-Sustainability Drivers for European Telecommunication Service Providers Operational Efficiency (€€) Legislation Prioritisation and Scope Brand/Reputation End User Demand Source: Frost & Sullivan, 2008 Of the nine service providers profiled, seven had rated operational efficiency and/or cost savings as their primary eco-driver. The financial community and other enterprises alike share this commercial attitude to eco-sustainability. Given the highly competitive environment within telecommunications, cost savings have driven European operators to seek operational efficiencies through the adoption of more sustainable business processes. Rising energy prices and resource scarcity in general see eco- initiatives helping bottom line, whilst new or re-branded eco-solutions can help drive top line. More implicitly, as the wider economy becomes more eco-astute, service providers are finding themselves 11 D=PAV_0038&wt_oss=environment Sustainability in Telecoms (October 2008) Page 12
  13. 13. having to embrace the ‘green religion’ in order to fulfil the increasingly green needs of their customer base, particularly larger corporations and consumers in certain geographic regions. Environmental Sustainability Benchmarks In the main, the criteria discussed in these profiles echo those identified as key benchmarks in Frost & Sullivan’s study last year (see the Green Religion’s “five commandments”). However, for the purposes of this more quantitative exercise, “Structural Landscape” does not form part of our assessment criteria. Instead, the comparative benchmarks are based on the following six parameters: Operational efficiency – Reducing the environmental impact of operational activities through • more efficient processes and technology and alternative energy sourcing. Supplier Management – The extent to which suppliers are encouraged/ required to have eco • credentials; efforts towards a zero waste supply loop. Internal Initiatives – Reducing the environmental impact of the business as an enterprise • through more sustainable business practices, e.g. carbon management and waste management. Employee campaigns - Establishing an eco-corporate culture amongst employees; • encouraging behavioural change. External public campaigns – Creating greater public awareness and promoting sustainability • practices through eco-programmes and targeted campaigns. Products and Services – Offering products and services that are either more environmentally • friendly and/or providing solutions that translate to eco-efficiency - for both consumers and enterprises. Industry Initiatives/benchmarks – industry collaborations, involvement in voluntary bodies, • association with government agencies, and recognition by related regulatory units. In addition, we have identified three parameters to provide a quantifiable point of comparison in terms of recent performance and outstanding commitments. These are: carbon emissions, renewable energy, and recycling. The variances in reporting formats for each of these quantitative parameters exemplify the lack of industry standards, preventing an objective comparison. The absence of standards is discussed further later in this study as a ‘burning issue’ as progress remains difficult to measure. The underlying objective of the benchmarking exercise is not only to highlight the commendable milestones of each operator but also to encourage further initiatives and catalyse change across the value chain. As key industry players, service providers carry a significant burden of social responsibility. Sustainability in Telecoms (October 2008) Page 13
  14. 14. Belgacom is engaged in efforts to remodel its operations to realize greater energy efficiency and control OPEX. Its efforts could be considered to be careful and modest compared to other, larger European operators. Its eco-sustainability focus is toward its internal operational efficiency, at present. The strategy for making Belgacom “green” has been designed by a small group in the CSR team, with input from the CEO and other executives. The policies are orchestrated and implemented by Belgacom business units. All employees are strongly encouraged to participate in the company’s sustainability measures. Belgacom intends to be a model of eco-sustainability before expanding external initiatives to promote itself as “green”. Quantifiable parameters Emissions: • 2006/7: 166,774 including vehicles (39,188), buildings (38,499), networks (89,087) Recycling: • 2006/7: 17,651- 14,507 tonnes Renewable energy: • 2006/7: 100% of electricity from renewable sources Operational Efficiency Network technology: 80% of energy consumed supports network and data centres. Free air • cooling systems support most mobile and fixed line base stations. Belgacom is currently exploring the possibility of developing free air cooling systems for its data centres, through collaboration with hardware providers. It is also investigating methods of making ICT and network equipment more efficient through the use of standby and power off devices, as well as “smart” equipment. Such technologies allow scaled down power consumption during low use periods. Renewable Energy: 100% of Belgacom’s electricity currently comes from renewable energy • suppliers and it has ambitions to produce much of its own electricity in the future. It claims that 25% of its premises are presently powered by solar, and it is in the process of installing solar panels on its other buildings. • Supplier Management Environmental standards for vendors: It is mandatory that all contracts and purchase orders • are in compliance with Belgacom’s Code of Ethical Purchasing. The enforcement of this is fairly lenient, at present, however, and the company is still in the early stages of defining eco-criteria for its suppliers. Eco credentials: Ideally, the company expects its suppliers to maintain eco-sustainable • policies, however it has yet to refuse to do business with any supplier due to conflicts in sustainability ethics. Internal Initiatives Carbon footprint management: Belgacom actively monitors the energy efficiency of its • operations. It currently practices a green car policy, and is investigating the practicality of using electric cars in the future. The power infrastructure is not presently capable of large scale electric car battery recharging; however the company hopes to achieve that ability once the utility network is in place. Waste: Policies include recycling and reduction of office waste, e.g. reduction of paper usage • and faxes. In 2007, 84% of purchase orders were sent out electronically, an increase of 29% over 2006. Internal employee campaigns Programmes for responsible energy use CSR and sustainability awareness-raising • initiatives have been implemented, targeted at the company’s personnel. A six week road show focused on the company’s green policies and included dialogues with employees regarding ways to improve their environmental impact in the office. Transport: Belgacom has instituted an eco-driving initiative that includes a 1-year training • programme for employees. It is also encouraging the use of public transportation by its personnel. It has partnered with a Flanders public transport company to facilitate this campaign. Sustainability in Telecoms (October 2008) Page 14
  15. 15. Recycling: An organized recycling programme has been initiated in the company’s offices, • which includes paper, plastic and metal waste. It has also initiated a study to identify ways to reduce packaging waste. External public campaigns The company reported in 2007 that 280,000 fixed line customers and 30,000 mobile customers • no longer receive bills through the mail. Handset recycling: Belgacom has launched a handset recycling programme called RELOOP. • Environmentally friendly products and services Existing services: Belgacom is currently looking into ways to transform its business solutions • (video conferencing, hosting and tele-working) to meet eco-sustainable criteria. Future services: Belgacom has partnered with a Belgian utility company in a trial of 150 • households (as well as its own offices), using GPRS technology that allows customers to view their gas and electricity usage on a near real time basis. This improves energy awareness and will allow customers to modify their consumption patterns. The company is also involved in the e-health services market and is developing integrated e-prescriptions, remote patient monitoring and mobile data cards used by ambulances. It is also involved in a study with a hospital in Brussels that allows follow up appointments to be made online. ‘Green’ products The company is collaborating with suppliers who are developing • environmentally sound products. Industry initiatives and benchmarks Initiatives: Belgacom is in compliance with national and EU environmental standards. It is an • active member of ETNO and the Polar Foundation which is involved with climate change issues. BT is actively involved in promoting its image of being an environmentally friendly company and a sustainability leader. Its strategy is largely focused on reducing its carbon footprint and improving energy efficiency. The company has an external CSR panel of advisory experts, which provides guidance and feedback on the company’s policies. It also has an internal CSR committee made up of personnel from several of its divisions and business lines. Quantifiable parameters Emissions: • 2007-08: 58% below 1996 level ie. 0.68 million tonnes – UK only Target: 80% below 1996 level by 2016 – UK only Recycling: • 2007-08: 46% of waste recycled, (79759 tonnes of waste, of which 36937 tonnes recycled.) – UK only Target 2008-09: 50% of waste recycled. (excluding waste from the 21CN network programme) – UK only. Renewable energy: • 2007-08 1129730 MWh (43%) worldwide Target: Windmill farm plans to generate up to 25% (250 mW) of BT’s UK electricity requirements by 2016. Operational Efficiency Network technology: A focus of the BT strategy is its data centres. It is using “ fresh air • cooling” technology to improve energy efficiency in its use of electricity. BT has categorized its network components as Red, Amber or Green depending on their energy efficiency. It plans to purchase low carbon electricity and has contracts with companies in the UK, Belgium, Germany and Italy. Renewable Energy: Renewable energy is another major focus of the BT sustainability • strategy. It has purchased its own wind farm and plans to use renewable energy exclusively for its operations in the future. The current project has a target of producing 25% of the company’s UK electricity needs by 2016. Sustainability in Telecoms (October 2008) Page 15
  16. 16. Supplier Management Environmental standards for vendors: BT provides its suppliers with a list of eco- • sustainability standards and strongly encourages compliance in companies with whom it does business. It has not refused to engage in contractual relationships with suppliers who do not meet its standards, however its procurement process offers incentives that encourage companies to provide energy efficient and environmentally friendly solutions. Eco credentials: Suppliers are rated on a scale of 1-3, with 3 representing the best eco • credentials. While BT intends to limit its contracts to companies who have a rating of 3, pragmatic concerns figure into its business relationships and choice of suppliers. Internal initiatives Carbon footprint management BT has significantly reduced its office space, as part of its • strategy to reduce its CO2 impact and to promote employee productivity. It has explored reducing the number of trucks in its fleet by engaging in van sharing programmes, and it is purchasing hybrid vehicles as it replaces older vehicles. Waste: BT monitors waste production and recycling, with the intention of reducing non- • recyclable waste by 6% in 2008-09. In 2007-08, non-recyclable waste was 54% of its total waste production, with 46% being recyclable. Standardization: BT is ISO 14001Certified in the UK Ireland, Spain, Italy and Belgium. • Internal employee campaigns Programmes for responsible energy use: The company has devised two internal • programmes to strongly encourage employees to be environmentally mindful. “Small Steps” promotes energy efficiency at work and at home. “Ease the Squeeze” focuses attention on green driving principles. Transport: In 2008, BT has over 11,000 employees working remotely from home. Home- • based working and virtual meetings are strongly encouraged for their carbon emission reducing aspects. Recycling: BT has a well organized internal recycling programme and resource use reduction • campaign. External public campaigns Bigger Thinking : BT offers a website that features sustainability subjects and is designed to • stimulate public awareness of environmental issues. Collaborative campaigns: BT has partnered with eco-related agencies and foundations to • help create a greater impact in the sustainability arena. An example is an e-billing programme where the company gave the amount of funds saved through paperless billing to the Woodlands Trust in England. The trust used the donation to support their tree planting operations. Environmentally friendly products and services: Existing services: The company is featuring its e-billing and video conferencing services as • eco-aware solutions to enterprise. It is also offering sustainability consultancy services to enterprise and public organizations, based on its experience in energy and resource optimization. It has been successful in promoting this aspect of its expertise and has gained important clients, particularly in the US. Future services: Several tele-medicine solutions are under trial. • ‘Green’ products’. BT is offering a line of energy efficient home telephones, and had set a • target of energy efficient phones in 90% of its consumer product range by July 2008. Industry initiatives and benchmarks Initiatives BT is a member of the Global Compact and Green Grid, as well as numerous other • environmentally concerned organizations. Sustainability Indices: The company has enjoyed a top position in the Dow Jones • Sustainability Index for eight years. Sustainability in Telecoms (October 2008) Page 16
  17. 17. DT has been successful in implementing one of the most well organized and comprehensive eco- sustainability programs in its internal operations. From that position of credibility, it has engaged its customers in environmental awareness campaigns, encouraging them to adjust their behaviors to be more energy efficient and eco-aware. Quantifiable parameters Emissions: • 2006/7: from power consumption: 2,607,140 from heating consumption: 278,178 (metric tonnes C02 eq) Recycling: • 2006/7: DT group in Germany recycles 98% of its waste Renewable energy: • 2008: The Group‘s entire electricity requirements in Germany are served by renewable energy Operational efficiency Network technology: DT has a subsidiary, Power and Air Condition Solution Management • GmbH & Co (PASM), which has the mandate to investigate ways for the company to operate in more energy efficient ways, as well as increase the use of renewable energy. PASM is developing more efficient air conditioning systems for DT’s data centres, utilizing new HVAC technology. DT is replacing old network equipment with energy efficient versions and increasing server virtualization. Renewable energy: PASM and DT have the goal of 100% renewable energy usage in the • future. PASM is exploring the use of fuel cells and biogas, as well as geothermal. Supplier Management Environmental standards for vendors: DT provides its suppliers with stringent sustainability • standards and expects them to meet those standards. Suppliers who do not yet comply are mentored by DT to improve their environmental and social standards. As of June 2007, 52% of DT’s procurement (40 suppliers) met the company’s sustainability criteria. Eco credentials of its suppliers are important but do not necessarily take precedence over • energy efficiency and cost efficiency. Internal operations Carbon footprint management: To facilitate reduction of the company’s operational carbon • footprint, DT conducts annual building energy audits, replacing inefficient equipment, as well as evaluating space utilization. It uses electronic document management as much as possible. DT’s vehicle fleet is fuelled by natural gas or alternative bio fuels. Waste: Recycling is a backbone of the company’s operational sustainability policy. • Internal employee campaigns Programmes for responsible energy use. DT has regular internal campaigns to focus • employee attention on eco-sustainability principles, and encourage awareness and behavioural changes in both the office and at home. Transport: Employees are encouraged to travel less and use public transportation. Remote • working from home, virtual meetings, car pooling and paper reduction are all platforms of the internal campaigns. There is also a training program for energy efficient driving. DT is reducing its fleet of vehicles. Recycling: DT has a well organized recycling programme and specific criteria for office waste • and paper use. An internal handset recycling system is in place. External public campaigns Campaign to enhance e-billing: DT has designed an electronic workflow and archival • process for incoming bills and records. One-off credits are offered to its customers as an incentive to switch to online billing. Handset recycling programme: This is usually a standard feature of T-Mobile’s operations in • Germany. Sustainability in Telecoms (October 2008) Page 17
  18. 18. Environmentally friendly products and services: Existing services: The company offers a diverse range of products which meet and support • sustainable criteria. For example: Audio and video conferencing solutions • Sinus series terminals (low energy consumption and climate neutral) • Route optimization applications for service technicians • Remote meter-reading applications • Telematics based solutions for logistics and fleet management • Telemedicine solutions for fitness and patient monitoring • ‘Green’ products: One of the most innovative new products is DT’s solar powered handset. • Industry initiatives and benchmarks Initiatives: DT is proactively involved with government, NGOs and other private organizations • to help set eco-sustainability standards e.g.: - Global-e-Sustainability Initiative (GeSI) - Global Round Table on Climate Change - Promotion on SMART2020 Study ( - ETNO Sustainability Working Group - EU-CLG on climate Change Sustainability Indices: Zurich-based rating agency Sustainable Asset Management (SAM) • has singled out Deutsche Telekom AG’s commitment to sustainability with a SAM Gold Class (one of 5 out of 42 providers.) DT is also listed in the UK FTSE4Good Index. France Telecom (FT)’s strategy is driven top-down and is carried out at multiple levels of the organization, internationally. Carbon reduction and renewable energy sources are important elements of FT’s eco-sustainability strategy. The company invests heavily in R&D and product innovation. Quantifiable parameters Emissions: • Target: Reduce greenhouse emissions per customer by 20% between 2006 and 2020 Renewable energy: • 2006/7: 7% of the total energy from renewable sources Operational efficiency Network technology: FT’s eco-sustainability strategy has targeted its networks and data • centres. Its operational networks account for 69% of its total energy consumption, and the company is replacing inefficient equipment with new energy efficient components; the plan is to replace all inefficient equipment over a 4-5 year period. FT has patented a technology which uses cool night air to cool equipment during the day, thereby reducing air conditioning usage. It is involved in server virtualization with the goal of reducing the number of physical servers in France by 40% by 2010. FT is also collaborating with the WWF to develop more efficient devices. Renewable Energy: FT has invested heavily in renewable energy sources, especially in solar • installations in off-grid, isolated locations. Its Oryx project was launched in 2007 in Senegal, with 35 sites. The project will likely be expanded to include 500 new sites in the Ivory Coast, Guinea, Madagascar and Mali by the end of 2009. FT’s mobile operations in the UK are driven by 100% renewable energy sources. Supplier Management Environmental standards for vendors: FT has produced environmental and ethical • standards for its suppliers and collaborates with them to help them achieve those standards. The company conducts assessments of its vendors and has a programme to formally evaluate Sustainability in Telecoms (October 2008) Page 18
  19. 19. the performance of its supply chain in terms of eco-sustainability. Suppliers who do not comply are asked to commit to a formal improvement plan. Eco credentials: Although a strong emphasis is placed on a supplier’s eco credentials, FT • balances the requirements with the need for pragmatism. Internal initiatives Carbon footprint management: Employee travel has been minimized through adoption of • increased video conferencing. FT closely monitors its vehicle energy consumption and has been investing in hybrid vehicles for its fleet. Waste: FT has organized a “waste management workgroup” whose task is to specify • standards for the management of waste, in the absence of local regulations. The company encourages employees to adhere to standards of low waste production and low resource use. Standardisation: Implemented ISO14001 Environmental Management Systems as part of the Group Environmental guidelines. A corporate framework has been developed to help country businesses meet ISO 14001 requirements. It includes key indicators and processes, and is backed by a sound implementation method. FT measures its ISO14001 rate of certification (13% of Group activities in December 2007) and ISO14001 rate of implementation for non certified activities (45% of Group activities in december 2007). Spain is fully ISO14001 certified as well as Slovakia and Egypt. Poland is certified for its mobile activities. Other programs are on going (Romania, Poland, Belgium etc) Internal employee campaigns Programmes for responsible energy use: FT has instituted numerous internal campaigns to • raise awareness of environmental issues and encourage changes in behaviour amongst its personnel. Some examples of its campaigns and operational practices toward furtherance of eco-sustainable principles are: Since 2006, several campains focusing on “Green Gestures” were launched to create • greater employee awareness Created an extranet group for allowing access to documentation on waste • Introduced a video conferencing service, “CoopNet”. This equipment has allowed the • company to reduce CO2 emissions by 34,000 tons. Replacing older vehicles with low emission “clean” vehicles • Transport: Public transportation is encouraged in its employees and transport allowances are • offered. The company has initiated car pooling clubs and provides bicycles on site at several locations. Recycling: Initiatives range from general office waste to computer recycling campaigns. In • 2007, 2993 tons of paper was recycled in the Group, compared to 746 tons in 2006. External public campaigns Handset recycling programme: FT has an ambitious handset collecting and recycling • programme. In 2007, the company collected nearly 912,000 mobile handsets (695 189 in 2006). 80-95% of handsets can be recycled. Campaign to enhance e-billing: Paperless, online billing is strongly encouraged by FT. • Media campaigns: FT has expanded its message reach by using additional media resources • beyond traditional marketing communications channels. Its goal is to create greater public awareness and promote its image as an eco-conscious company. Additional resources include celebrity endorsements as well as alliances with environmental regulatory agencies and both private and public groups, such as the WWF. The latter alliance produced an initiative that not only involved enhancing efficient energy consumption in network devices but also created an e- billing campaign which led to almost 3 million customers switching to e-billing. Sustainability Website: FT’s website features the company’s eco-sustainability vision and its • th policies to support that vision. FT hosted an online screening of the film 11 Hour (La 11ème heure), starring Leonardo di Caprio, to promote its environmental web site and increase public eco-awareness. Other initiatives: The company offers an “intelligent universal charger” which stops charging • when the battery is full. It has also lauched a campaign called “second life for the mobile phone” where the company collects used mobile phones which are then refurbished and resold to customers at affordable prices. Environmentally friendly products and services: Existing services: In addition to enterprise solutions such as tele-conferencing and e-billing • which help reduce a company’s carbon footprint, FT has actively partnered with the French local authorities to introduce a range of socially and environmentally responsible programmes. Special focus has been placed on the Healthcare sector, e.g. remote patient monitoring solutions, M2M applications, reliable and secure data networks, etc. Sustainability in Telecoms (October 2008) Page 19
  20. 20. Future services: FT plans to continue to develop more sustainable products, for example • eco-friendly/climate neutral set top boxes. ‘Green’ products: The company’s alliance with the WWF is aimed at developing more energy • efficient products. One example is the first solar powered blue tooth head set. Industry initiatives and benchmarks Initiatives: FT is closely aligned with organisations such as ETSI to influence European • standards and ETNO to establish best practices. It is also engaged with several international organisations and NGOs for the purpose of supporting its eco-sustainability strategy, and commercial goals. Sustainability Indices: Since 2002, FT has been listed on the FTSE4Good Index. In February • 2008, FT was included in Sustainable Asset Management’s Silver Class and 2008 Sustainability Yearbook. France Telecom is also included in the ASPI eurozone as well as the the Ethibel Indexes. Telenor has had internal eco-sustainability policies in place for a long while. The company’s goals have centred on enhancing cost efficiency in networks and ensuring affordable energy supplies through use of renewable energy sources. Customer pressure and satisfaction play a significant role in shaping Telenor’s policies, as consumers in Norway are particularly eco-conscious. The company has a goal of being “Climate champions” within each of its markets. It is currently developing an environmental advisory team, with members in each country, whose mandate is to identify local conditions of environmental risk and opportunity. Presently, green products and services appear to be the least developed aspects of its strategy. Quantifiable parameters Emissions: • 2006: 68,967 C02 tonnes globally Recycling: • 2006: 1,239 tonnes of waste in Norway Renewable energy: • 2008: 97% of energy from sustainable sources in home market (Norway), and approximately 35% at group level. Operational efficiency Network technology: The company’s main focus is on improving the energy efficiency of its • networks, which comprise approximately 70% of its total energy consumption. It is involved in replacing old equipment and improving its data centres. Telenor is currently partnering with Nokia Siemens Networks toward furtherance of these goals. Renewable Energy: The company is substantially invested in a wide range of renewable • energy sources; wind, solar, fuel cells, water and geothermal energy. It is currently conducting trials in several countries, testing hydrogen, wind and solar energy as power sources for base stations. In January 2008, a solar-electric hybrid system was installed in Pakistan to power a repeater. Supplier Management Environmental standards for vendors: At present, Telenor does not have an environmental • aspect to its RFQs. The Environmental team is currently working with the procurement department to develop mandatory criteria to be enforced next year. Eco credentials: Despite the lack of formal criteria, the company has suggested that suppliers • are expected to deliver energy efficiency benefits. Internal operations Carbon footprint management: Telenor Norway closely monitors energy consumption in its • buildings. The company launched a pilot project which used a web-based system to measure the energy consumption of the 50 largest Telenor buildings in Norway. Data is collected from metres which measure the consumption of electricity, oil, gas and district heating. Office space optimisation is also a key initiative, with the headquarters of the company in Oslo designed as Sustainability in Telecoms (October 2008) Page 20
  21. 21. an open plan layout, reducing the need for office space by 40%. More than 50% of the energy required for heating comes from heat pumps that are powered by energy generated from the nearby sea. In the summer, the system is reversed, using the sea water as a source for cooling. An automatic light control system has also been installed. In 2003 and 2007, environmental considerations were key in the purchase of new vehicles for Telenor’s fleet. Employees are offered incentives to use public transport. Remote working and virtual meetings are also encouraged. Waste: Waste separation and residual waste management is carefully managed in • Norway.Telenor plans to launch group wide environmental KPIs in 2009 Internal employee campaigns Programmes for responsible energy use: In 2007, Telenor launched a “Climate Change • Programme” which encourages all of its employees and their families to participate in practical ways to tackle climate change. Another more recent programme is the ‘’Way of Work’’ campaign. Transport: Telenor has introduced bonus system for employees who choose to drive a more • environmentally efficient company car. Recycling: The company’s policy is to continuously increase the percentage of waste recycled • and reduce resource usage. External public campaigns Handset recycling programmes: Handset recycling programmes have been instituted in • Hungary, Serbia and Norway. Telenor is planning comprehensive, system-wide operations to collect used handsets. Locally, Telenor has engaged with the Norwegian humanitarian organisation FAIR to encourage computer recycling. Campaign to enhance e-billing: This is a standard feature of Telenor’s services. • Environmentally friendly products and services: Existing services: A range of conferencing and collaboration tools are currently offered but • not yet marketed as eco-sustainable. Future services: Telenor plans to launch telemedicine services, such as remote patient • monitoring, next year, as well as E-learning services for the education sector. ‘Green’ products’: None, presently. • Industry initiatives and benchmarks Initiatives: Telenor is a member of ETNO. • Sustainability Indices: The company was ranked no 1 in the Dow Jones Sustainable Index in • 2007. Italy’s domestic consumer market has relatively lower eco-sustainability expectations; therefore Telecom Italia (TI)’s strategy focuses primarily on cost efficiency, rather than in promoting an eco-conscious image. Energy efficient network equipment is a key element in its strategy, as is compliance with EU legislative mandates. Reflecting the company’s economic focus, TI’s sustainability advisory team is a division of the Finance Unit, and is responsible for designing and driving the sustainability agenda across the entire TI Group. Quantifiable parameters Emissions: • 2007: Total CO2 emissions (tonnes): 1 046 498, up 1.63% from 2006 for Telecom Italia S.p.A 2007: Total CO2 emissions (tonnes): 1 164 750 for the TI group Recycling: • 2007: Ratio between recycled waste and total waste 97.89% (Telecom Italia S.p.A) (up 3% from 2006) Data does not include removed telephone poles. Renewable energy: • 2007: 1,5% of electricity from renewable certified resources Sustainability in Telecoms (October 2008) Page 21
  22. 22. Operational Efficiency Network technology: A programme to replace old equipment across the network is expected • to take place over the next 2-3 years to increase energy efficiency. This will involve multiple operations and stages, including installation of energy efficient base stations and free cooling plants as well as the replacement, rationalisation and optimisation of conditioning plants. TIM Brasil, for example, is installing automatic lighting and presence sensors as well as introducing electrical circuit sectioning and replacing incandescent lamps with fluorescent ones. Data centres will also be made more energy efficient. Renewable Energy: TI is planning to increase the use of renewable energy sources to ensure • a more reliable and cost efficient energy supply. The company is investigating renewable energies such as solar, wind power, hydro electric and geothermic energy. Supplier Management Environmental standards for vendors: There are no mandatory environmental requirements • in TI’s current RFQs but vendors with strong eco credentials are likely to be in a stronger position. Eco credentials: The RFQ has a self assessment section for green vendor criteria. Meeting • the criteria is not currently a requirement, however it allows the supplier to gain points in an assessment system which allows a supplier’s bid to be further considered. Internal Inititatives Carbon footprint management: TI closely monitors CO2 emissions from its vehicle fleet and • this is reflected in its KPIs. The company is gradually replacing older, less efficient vehicles with energy efficient ones. Waste: The company currently monitors the amount of hazardous and other network waste • produced. Internal employee campaigns Programmes for responsible energy use: TI has initiated several internal campaigns aimed • at its employees to increase awareness of its sustainability programmes. These include a monthly newsletter and an internal TV channel which promotes sustainability issues and practices across the group. Recycling: Waste management is also reported as part of the company’s KPIs; campaigns • promoting office waste reduction and recycling are ongoing. External campaigns: Campaign to enhance e-billing: This is promoted as a convenience for the customer and as • a ‘green’ initiative. Environmentally friendly products and services Existing services: TI promotes remote/tele-working when applicable and convenient, however • these have not been branded as being specifically eco-sustainable. Future services: As part of the company’s mission towards greater sustainability, TI plans to • develop more carbon neutral products and services, such as telemedicine videoconference or infomobility, that minimise environmental impact through the reduced needs for transferring people and goods and related emissions ‘Green’ products: TI offers energy efficient consumer products, such as broadband modems, • routers and cordless telephones, however these have not yet been marketed as eco- sustainable. Industry initiatives and benchmarks Initiatives: TI is heavily involved in external legislative lobbying to influence eco-sustainability • standards. TI chairs the Sustainability working group and the Energy Efficiency working group within ETNO and is involved with GeSI and major academic insitutions. TI is committed to demonstrating how the telecommunications industry can help reduce carbon emissions and be part of the solution rather than the problem. Sustainability Indices: TI is a member the Ethical Sustainability Index (ESI) and is also listed • on FTSE4Good and Dow Jones Sustainability Indexes. Sustainability in Telecoms (October 2008) Page 22
  23. 23. Due to the large number of markets in which it operates, Vodafone has a somewhat different eco- sustainability strategy than most other major service providers. Its strategy is developed at the Group level but is implemented at the local level depending on the conditions in each of its country markets. For example, in Western Europe, environmental issues are most highlighted, whereas in Eastern Europe social concerns are more important. Vodafone’s CSR team creates initiatives and then turns the implementation of them over to the local operational teams. Generally, there is a focus on energy efficiency, using renewable energy sources, and operating costs reductions. A key focus is reducing operational costs in its base stations through the use of energy efficient technologies. Quantifiable parameters Emissions: • 2006/7 :CO2 emissions from network operations and offices (millions of tonnes) (direct and indirect) 1.23; global (excluding transport) 2007/8: CO2 emissions from network operations and offices (millions of tonnes) (direct and indirect) 1.45 Target: Cut emissions by 50% by 2020 – global; 40% reduction in network energy CO2 emissions per MB traffic by 2011 Reuse and Recycling: • 2006/7: Reused and recycled 96.6% of network waste – UK 2007/08: Collected 1.3 million handsets for reuse or recycling globally. Handsets reused as a percentage of handsets collected (%) 61.5 2007/2008: Reused or recycled 96% of network equipment waste, amounting to 2,611 tonnes of non-hazardous waste, and 9,027 tonnes of hazardous waste globally Target: Maintain reuse and recycling rates for network waste at or above 97% in the UK. Send for reuse and recycling 95% of network equipment waste during the year. (March 2009.) Collect a further 1.5 million handsets. (March 2009.) Renewable energy: • 2006/7: 17% of total energy were from renewable sources Operational efficiency Network Technology: Vodafone has a strong focus on reducing energy and environmental • costs of its network equipment, which account for 80% of its emissions. For example, Vodafone Spain halved the energy used by its base stations by upgrading power amplifiers and installing remote radio heads, which effectively doubled the previous power output. The innovative solution was applied across 655 sites in 2006-2007, and will be implemented in base stations across the entire Group. The company is exploring energy efficiency in its methods of cooling base stations, and is engaged in a trial project to install “free cooling” technology that uses fresh air to cool network equipment, as the default option in new base stations. Other Network Energy Saving Initiatives include deactivating unused rectifiers, categorising sites to optimise energy usage, remote monitoring and measurement of energy. Renewable energy: Vodafone is trialling ways to reduce diesel fuel consumption at sites in • Egypt and Albania. The increased use of renewable energy is an important part of the company’s long term eco-sustainability strategy, however that focus is not at the forefront at this time. The varied geo-political aspects of the countries which Vodafone serves add a complexity to the company’s situation that is unique to most major service providers. Supplier Management Environmental standards for vendors: Vodafone has standards which it expects its suppliers • to meet, including resource efficiency (e.g., water used in manufacturing), emission minimisation, environmental performance of products, etc. It works with vendors who do not initially meet the standards, to help them improve their environmental impact. Equipment: The company places emphasis on the emission levels of power amplifiers and • radio heads and strongly encourages such equipment manufacturers to improve the energy efficiency and eco-standards of those products. Eco credentials are assessed through the self-assessment questionnaire that Vodafone send • out with their RFQs. Sustainability in Telecoms (October 2008) Page 23
  24. 24. Internal Initiatives Carbon footprint management: Vodafone encourages less travel and more video • conferencing in order to reduce costs and C02 emissions. In 2007-2008 the company conducted environmental audits in 10 operating companies. Waste: The company aims to maintain reuse and recycling rates of hazardous and network • waste at or above 97%. Standardization: Vodafone is ISO 4001 accredited in the UK.. • Internal employee campaigns Programmes for responsible energy use: Vodafone’s in-house strategy includes reducing • energy consumption through a campaign to encourage employees to be more aware of simple things they can do to cut electricity and gas usage in the workplace. However, there are few publicised examples of these initiatives taking place. Recycling: Goals have been set for general office waste. A programme has been introduced • to reduce office paper use at Newbury and Theale offices by 28% by March 2008 compared to 2005/6 levels. External public campaigns Handset recycling programme: Vodafone is planning to expand its Fonebak programme • (handset recycling programme) among its top 50 customers, with the goal of collecting 275,000 handsets by March 2008. Sixteen of its local operating companies already have handset reuse and recycling programmes in place. Vodafone Turkey is launching such a programme. The programmes include incentives such as handsets in exchange for airtime, or a donation to charity. Campaign to enhance e-billing: Online billing is a promoted service. • Within a series of papers entitled ‘Vodafone Corporate Responsibility Dialogues’, Vodafone • invites consumers to provide feedback in relation to its CSR approach. Environmentally friendly products and services Existing services: Vodafone has not yet branded any of its services as “green”. • Green products: The company recently launched a solar powered handset charger in Holland, • Portugal, and several other countries. In general it does encourage customers to be ‘green’ but thus far there are only limited examples of eco-services. Industry initiatives and benchmarks Initiatives: Vodafone is a member of the Global e-Sustainability Initiative (GeSI), the World • Business Council for Sustainable Development, the Corporate Leaders Group (climate change), as well as the Mobile Phone Partnership Initiative (handset recycling and e-waste.) Sustainability Indices: The company has been ranked among the top five companies in the • Accountability Rating for the last three years and is included in the FTSE4Good and Dow Jones Sustainability Indices Swisscom has operated a systematic environmental management system for over ten years. For the company, there are three main categories of resources of operational significance: infrastructure resources (construction materials, electronics and cabling), consumables (paper and water, etc.), energy resources (electricity, heating and vehicle fuels); the third being the most important. Green products and services are gradually becoming more of a focal point. A central environmental team draws up the projects and implements these together with the operational units. At the Group level, an Environment Committee operates in which all environmental managers of the certified Group companies and organisational units of the Group are represented. Quantifiable parameters Emissions: • 2007: 25,736 tonnes direct CO2 emissions Target: Swisscom has committed to cutting its CO2 emissions by 17 percent or 5,700 tonnes between 2002 and 2010. Sustainability in Telecoms (October 2008) Page 24
  25. 25. Reuse and Recycling: • 2006/7: total waste Renewable energy: • Target: 17% greater energy efficiency Operational efficiency Network Technology: Electricity makes up 80 percent of the energy used by Swisscom, • followed by heating fuels (heating oil, gas and district heating) and vehicle fuels (petrol and diesel) in second and third place, respectively. Swisscom aims to increase its energy efficiency by 17 percent between 2002 and 2010, a target agreement that Swisscom reached with the Energy Agency for the Economy (EnAW). Swisscom particularly sees room for improvement in its telecommunications networks and IT (low power modes for broadband and mobile networks, optimised cooling, use of waste heat). Its pioneering MISTRAL project uses fresh-air cooling as an alternative to air conditioning for telecommunications installations. Once implementation is complete (scheduled for the end of 2012), it is predicted that MISTRAL will save 10% on electricity. Swisscom was also Europe's first telecommunications company to sign a code of conduct governing the energy consumption of broadband equipment. Renewable energy: Swisscom purchases around 13 million kWh of naturemade star eco- • energy each year. This means wind power from Mont Crosin, solar power from a variety of solar plants and hydroelectricity from naturemade star-certified hydroelectric power stations. Swisscom also sits on the board of the label's supporting institution, the Association for Environmentally Sound Electricity (VUE). In addition, Swisscom apprentices are constructing solar installations on Swisscom buildings. Four of these installations have been constructed to date and more will be added in the next few years. Swisscom draws more green energy from wind and solar power than any other company in Switzerland. • Internal Initiatives Carbon footprint management: Swisscom makes eco-conscious investments in its vehicles • (types such as hybrids, natural gas-powered vehicles, etc.) and buildings (new heating concept). In 2007, Swisscom began operating eleven natural gas-fuelled cars and 35 hybrid vehicles. Hybrid vehicles have proven particularly efficient and the number of hybrid vehicles in the fleet is expected to grow in the coming years (to several hundred).The consumption of heating fuels dropped in 2007 (by 3% below the previous year level), totalling 213 terajoules. This decrease is mainly the result of the ESPACE project (optimisation of office building space). Swisscom is looking into utilizing waste heat from buildings (in particular data centres) for other purposes. The company is currently investigating whether the waste heat generated by the Zollikofen computing centre could be utilised to feed an interconnected heating network – this could meet the entire heating needs of several major companies and residential buildings. Four Swisscom sites (Gossau, Ostermundigen, Worblaufen and Zurich-Binz) have been awarded the label quot;nature parkquot; by the Nature & Business Foundation which recognises their contribution to the environmental sustainability of work locations. Waste: The volume of waste produced by Swisscom fell in 2007 to 1,265 tonnes. Swisscom • uses the Swiss Waste Exchange which is a platform for buyers and sellers of waste. Approximately two-thirds of its waste is recyclable– including metal (primarily from cables), paper, glass, PET etc. In terms of volume, hazardous waste is of ‘minor importance’ for Swisscom in terms of volume. In 2007, this comprised 12.8 tonnes, mainly comprised of batteries and fluorescent lighting tubes. Swisscom’s total consumption of paper decreased from the previous fiscal year, by 6.1% in 2007. In the same period, office paper usage decreased by 25%. Standardization: Swisscom was the world's first telecommunications company to be certified • to the environmental standard ISO 14001. Internal employee campaigns Programmes for responsible energy use: employees can now read about the company’s • environmental activities in regular newsletters as well as on the intranet and in the staff magazine. Swisscom’s environmental management group publishes an environmental blog which is accessible both internally and externally. Employees are encouraged to participate in WWF’s biodiversity conservation project SMARAGD. Swisscom pays 50% of the cost for time spent on such deployments, while the employees themselves pay the other half. Biking to work is also encouraged. External public campaigns Handset recycling programme: Customers can take their used devices back to Swisscom, • which recycles phones via the Solidarcomm project. This project aims to combine ecological and social benefits by sorting and reconditioning phones and giving part of the profits to Sustainability in Telecoms (October 2008) Page 25
  26. 26. charities. Products are priced in such a way that customers pay an advance recycling fee when they purchase new equipment, which ensures that the used products are properly recycled. Campaign to enhance e-billing: Electronic billing has been introduced. • Swisscom has an environment website which is aimed at providing dialogue with residential • customers. Environmentally friendly products and services Existing services: Swisscom has labelled its eco-sustainable services as ‘Green services’. • The company is in the early stages of developing an extensive portfolio. It currently offers Teleworking, Conferencing services (teleconferencing and webconferencing), and Hosting (outsourcing IT infrastructure). Swisscom supports the Swiss National Park by providing technical solutions, such as an SMS service and the interactive Webpark walking guide. It is one of the main sponsors of the new national park centre in Zernez. Green products Swisscom has identified that demand in the home market is particularly high • for modems and set-top boxes with reduced standby power consumption. Swisscom signed a Code of Conduct governing set-top boxes at the Swiss Federal Office of Energy and has set its own goals higher than these. Swisscom, in collaboration with Swissvoice, has launched a service called ECOMODE – the designation for a line of low-radiation cordless telephones whose transmission signals are interrupted as soon as the handset is replaced on the base station. Low-emission DECT telephones are Swisscom's first marketable quot;green productquot;. Swisscom hopes to roll out additional products and use a leaf-shaped symbol to label its green products. Industry initiatives and benchmarks Initiatives: Swisscom is a member of ETNO, Sustainability Working Group and is signatory to • the Sustainability Charter. It also is a partner with ÖBU (Swiss Association for Environmentally Conscious Management), the Association for Environmentally Sound Electricity (VUE) and EnAW (Energy Agency for Industry) which has provided a universal target agreement for CO2 reduction and increased energy efficiency. Swisscom also supports the principles of the Swiss Code of Ethics and bases its reporting on the Global Reporting Initiative (GRI). It is a partner of the WWF and sponsors the GLOBE environmental school project. Only Swisscom and TDC have signed up to comply with the European standards for energy efficient equipment. TeliaSonera's own environmental work is mainly connected to its telecommunications networks. Energy issues in general and CO2 in particular are issues to which TeliaSonera wants to pay specific attention. Each profit centre defines its environmental programme with defined focus areas, objectives, specific goals, actions and indicators based on the environmental aspects and stakeholder demands specific to its own market. TeliaSonera introduced CSR reports in 2004, indicative of the fact that previously most Scandinavian countries didn’t place the same emphasis on reporting but comply with a much more extensive legislative system. Quantifiable parameters Emissions: • 2006: 155,906 metric tonnes CO2 equivalent (Sweden, Finland, Lithuania, Denmark and Norway) Renewable energy: • 2006: approximately 58% of the energy used was from renewable sources. Operational efficiency Network Technology: TeliaSonera has conducted life cycle assessments for many of its • telecommunications services Renewable energy: In Finland, about 10% of TeliaSonera’s total electricity consumption is • generated by wind power, and electricity from renewable sources (water, wind and biomass) accounted for 72% of total electricity consumption (2006). In Sweden, TeliaSonera has piloted fuel cells in telecom exchanges (2006). The electricity consumption of the operations in Norway are CO2 neutral, since the electricity in Norway is produced totally by water power. Sustainability in Telecoms (October 2008) Page 26
  27. 27. Internal Initiatives Carbon footprint management: Between 2001and 2006 TeliaSonera increased the use of • virtual meetings by 67% and reduced business travel by 30% in Sweden. There was also a 50% reduction in office space in the same year. In Denmark all light fittings were replaced in its facilities with energy-saving alternatives, reducing electricity consumption from lighting by 67% (2006). Standardization: TeliaSonera Sweden’s environmental management system (representing • 40% of the Group by turnover) is certified to meet the international standards ISO 9001 and ISO 14001. Further certification is underway. Internal employee campaigns Programmes for responsible energy use: The company promotes the use of tele-and web- • meetingstocut travelling costs, increase efficiency and reduce environmental impacts. Meeting organisers are obliged to consider the best meeting format by taking cost and environmental issues into account based on the geographical locations of participants. Recycling: In Denmark, all the printers are default set to print on both sides of paper, which • reduced office paper use by around 40% (2006). Environmentally friendly products and services Existing services: TeliaSonera sponsors R&D to facilitate the use of telecommunications • services for sustainable development. Industry initiatives and benchmarks. Initiatives: The company has been a member of ETNO since 1996. TeliaSonera is also one of • the partners in the centre of excellence established in Sweden in 2006. The Centre for Sustainable Communications, co-ordinated by The Royal Institute of Technology in Stockholm, aims to create and develop new, innovative tools and methods for communication. Sustainability Indices: In 2006 TeliaSonera was listed in the Dow Jones Sustainability Index. • The Future is Green It is clear from the profiles above that the telecoms sector is rapidly developing in terms of its eco- sustainability strategy. Over the past 12 months, operators have exhibited a more concerted effort to formalise an eco-sustainability strategy and framework. This is also evident through comparison of our findings in last year’s study. Indeed, some are now further ahead of others, but all operators profiled have demonstrated a strong commitment to addressing environmental issues. The various implicit and explicit drivers see some operators setting themselves apart from others in certain areas. In the case of renewable energy, for example, national socio-economic factors clearly play a strong role in the consumption of renewable energy, as illustrated in the diagram below. Sustainability in Telecoms (October 2008) Page 27
  28. 28. Chart 1.5 : The Renewable Race Only in Germany 0 20 40 60 80 100 % % % % % % Percentage (%) Source : Frost & Sullivan, 2008 As eco-strategies become ever more sophisticated, the bar will continue to be raised. For example, whereas a few years ago e-billing or handset recycling programmes would have singled out an operator as a leader in the field, these initiatives are fast becoming common practice. The industry must continue to research and implement innovative ways of improving eco-efficiency. Moreover, a move to share best practices is particularly important. Although a number of Scandinavian and German operators tend to shy away from blowing their green trumpets, highlighting best practices will help the industry move forward. This ‘modesty’ is perhaps largely due to the fact that sustainable growth is very much ingrained as part of the business DNA in those countries, a condition which will hopefully be true of other European operators in the near future. Prescriptions for an Eco-sustainable Industry This section of the study introduces a few concepts/business practices that lend greater environmental sustainability. This is followed by a non-exhaustive selection of industry best practices, which conclude the study. Supply Loops Expectations are rising for the ICT industry to ‘step up to the mark’. It is only through sustaining an ambitious outlook that telecoms will be viewed as an industry that engages with eco-sustainability in a Sustainability in Telecoms (October 2008) Page 28
  29. 29. dynamic way. As eco-sustainability continues to progress, the need to implement further measures which demonstrate a deeper commitment to the environment will grow simultaneously. One example of an initiative which could push eco-sustainability in industry forward is that of supply loops. In comparison to the traditional supply chain, where waste is an inevitable by-product of any process, supply loops put mechanisms in place which eliminate that by-product. In turn, companies are able to operate to their maximum eco-efficiency. One definition of a supply chain is as follows: […] a network of facilities that procure raw materials, transform them into intermediary goods and then 12 final products, and delivers the products to customers through a distribution system. In this process, the end product is largely irrelevant to supply-chain managers. However, supply loops ‘divert end-of-life products from landfill and reprocess these products, their components or their 13 materials into secondary resources which replace primary resources in forward supply chains.’ This is illustrated in Chart 1.6 below. Chart 1.6: Supply Loop Illustration Raw Primary Component Final Product materials materials product sale and mining production manufacture assembly delivery Materials Component Product Product re- re- re- demand & processing processing processing use Eol product End-of-life collection product & inspection disposal Source: Reuse and Recycling: GSCM, ‘From Supply Chains to Supply Loops’, Spring 2007 12 Lea & Billington, cited in GSCM ‘from Supply Chains to Supply Loops’ (Spring 2007.) 13 Ibid. Sustainability in Telecoms (October 2008) Page 29
  30. 30. A product within a supply chain would follow the blue path and terminate at the end of the black path, whilst a product within a supply loop would continue onto the green path, thereby forming a ‘circle’. As the red lines on the diagram indicate, the theoretical efficiency of a supply loop can be constrained in practice, when it is not able, for technical or economic reasons, to reprocess all targeted end-of-life products into secondary output that is marketable at above-cost price. Limitations could include: limited collection of end of life products, limited feasibility of reprocessing, limited market demand for the reprocessed secondary resources. However, regardless of these recognised ‘kinks in the loop’, with enough collaboration, this mechanism has the potential to transform current supply chains into more eco-efficient supply loops. Addressing the entire lifecycle It is within product lifecycle analysis that most lobby groups find room for critique. In their most recent report, Greenpeace noted the ‘lack of a comprehensive lifecycle approach’ within ICT, highlighting it’s centrality in the battle to further reduce environmental footprint upstream, and extend the lifespan of 14 products downstream. A point most effectively articulated by Greenpeace related to the limited lifespan of products themselves. Of course, the switch from products with a limited lifespan (planned obsolescence) towards long-living goods is not one which will come easily. It is, in fact, the consumer who has to take accountability for the high replacement rates of devices such as mobile phones, laptops and PCs. Hopefully, as the consumer demand for truly ecologically sound products increases, so to will the pressure for companies to provide upgradeable goods with extended warranty periods and long availability of component parts. Moreover, other issues, such as the need to standardise chargers and peripherals, will become linked to eco- efficiency, rather than just practicality. With respect to production, there is rising demand for an industry-wide standard that takes into account the use of energy and natural resources across the entire chain of production. Across the board, whether in relation to mining, manufacturing, distribution, or end-of-life, a transparent and truly holistic approach to eco-sustainability is being called for – and it is a call which will have to be answered. Commendable amongst the operators profiled is Vodafone’s life cycle perspective of the environmental impacts of the mobile industry, as depicted in Chart 1.7 below. 14 Greenpeace ‘Searching for Green Electronics’, March 2008. Sustainability in Telecoms (October 2008) Page 30