Is telco sustainability just an afterthought?

The biggest sustainability challenge telecom operators face is a philosophical one: persuading shareholders and stakeholders that environmental sustainability matters, according to MTN Consulting analyst Matt Walker.

“Most big telcos publish sustainability reports or include such data in annual reports. But it’s often an afterthought, and not typically a focus of the company,” Walker wrote in response to questions from SDxCentral.

Leading telecom operators in the sustainability arena prioritize transparency “in their use of energy and adhere to credible, science-based standards and definitions in presenting their data publicly,” Walker explained, citing Swisscom, KPN, and Proximus as leaders in western Europe.

But comparison among operators is challenging, because “every telco has a different starting point,” Walker added. “The operating climate in Switzerland, the Netherlands and Belgium is vastly different from what telcos such as America Movil, MTN Group, and China Mobile face.”

For telcos that are pursuing environmental initiatives, cost savings often remains the primary goal. “Even telcos who don’t care about the environment do care about costs,” Walker explained.

MTN Consulting estimates 5G will double or triple energy consumption for mobile operators once networks scale. Adopting renewable energy and other efficiency measures could help keep costs down, but operators often view positive environmental impacts as a side effect rather than the goal.

Enablers of sustainability
Although the telecom industry has a relatively small direct impact on climate change, its indirect impacts have the potential to make a measurable difference.

Telecom operators can be enablers of sustainability in two main ways, Walker wrote. First, telcos can stimulate the green energy market by investing in solar and wind farms that also sell sustainable energy to the grid.

For example, Verizon allocated nearly $2 billion in green bonds to fund projects that positively impact the environment. The carrier issued its first green bond for $1 billion in 2019. Those funds were fully allocated in 2020 for renewable energy, green buildings, biodiversity, and conservation efforts.

An additional $994 million in net proceeds from Verizon’s second green bond have been fully allocated toward virtual power purchase agreements for renewable energy projects.

In total, these projects can generate a gigawatt of renewable energy across seven U.S. states — Illinois, Indiana, Iowa, Maryland, North Carolina, Ohio, and Pennsylvania.

The allocation of these funds will help “support the transition to a greener grid” and move the operator toward its 2035 goal of net-zero operational emissions, Verizon’s EVP and CFO Matt Ellis said in a statement.

Monetizing sustainability
The second way telcos enable sustainability is by offering customers services that “monitor and help improve energy efficiency of devices, buildings, and the like,” Walker said. The World Economic Forum reports that buildings are responsible for 40% of global energy consumption and 33% of greenhouse gas emissions.

This presents an opportunity for telcos to monetize environmentalism and find revenue upside through things like energy audits or IoT services aimed at finding leakages, Walker explained.

According to the Carbon Trust, Vodafone’s IoT efforts — this includes smart metering, smart logistics, and smart-cities applications — helped its customers avoid around 5.9 million tons of carbon dioxide equivalent (CO2e) during the 2019 fiscal year and 7.1 million tons of CO2e during the 2021 fiscal year. SDxCentral