Introduction Social awareness
In 2008, estimates placed the Telecommunications To date the Telecommunications industry has been
industry’s revenue at $1.9 trillion (USD).
1
The central largely perceived as environmentally friendly by
role of telecommunications in the global economy also consumers, in spite of the significant energy footprint
represents a significant environmental challenge; associated with running the networks. In the UK, British
in April 2009, OFCOM suggested that the total global Telecom (BT) accounts for 0.7% of all electricity usage,
carbon footprint of the ICT industry as a whole is in the and represents 1.7% of all business consumption.
5
order of 800 MtCO
2
e or approximately 2% of global Yet a recent survey found that most respondents
emissions. Of this, the contribution from global underestimated the electricity consumption associated
telecommunication systems – mobile, fixed and with mobile phone use, and are not aware of the wider
communications devices – currently approaches 230 environmental impact of the mobile communications
MtCO
2
e or approximately 0.7% of global emissions.
2
industry.
6
And these numbers are expected to more than double
by 2020.
3
However, the emerging social awareness of
environmental issues is illustrated by the Greenpeace-
The global economic downturn combined with an led ‘Green my Apple’ campaign. Consumers demanded
increasing awareness of the challenges of climate Apple remove the worst toxic chemicals from all their
change has led governments and businesses to products, and promote free “take-back”. Due at least in
conclude that this is the right time to begin the real part to this campaign, Apple have adopted a number of
transition to a low carbon economy. At the UN Forum green initiatives and marketing campaigns to promote
on Climate Change in New York in September 2009, their green credentials. As such, we believe that the
the Airline industry became the first sector to announce current lack of awareness and/or indifference will be
a global plan to cut net carbon emissions by 50% from relatively short-lived.
2005 levels by 2050. Japan has thrown down the
gauntlet to other industrialised nations by pledging to So with growing public awareness and an emerging
cut emissions by 25% from 1990 levels by 2020, readiness to address climate change, there is strong
subject to a global deal at Copenhagen. likelihood of a change in consumer behaviour towards
companies that do not make a credible contribution to
So in view of the current economic conditions, addressing environmental issues. As such, Telcos should
environmental policies have become mainstream not only accelerate activities to reduce emissions but
primarily as an opportunity to reduce cost. Furthermore, also ensure that effort is dedicated to evidencing these
rising energy prices and the rising cost of carbon have reductions in order to build trust and capitalise on the
significantly enhanced the benefits of ‘going green’. opportunity for brand differentiation.
Estimates even suggest that Telcos can achieve a 1-2%
1 Gartner – Dataquest
reduction in global carbon emissions by implementing Indeed some operators have realised that it is critical to
Insight: Global
green initiatives within their operations.
4
Yet while cost understand the needs of specific stakeholders in order
Telecommunications
Market Take (June 2009)
reduction lies at the heart of the green agenda, this is to manage long term risks that could limit future
only part of the opportunity offered to Telcos by growth; as environmental concerns increase, Corporate
2 Eftec and Plextek –
environmental policies. Social Responsibility (CSR) teams need to work closely
OFCOM: Understanding
the Environmental Impact
with communities to find mutually beneficial solutions
of Communication
In fact Deloitte believes that there are four key drivers to these environmental concerns. For example,
Systems, Final Report
that make environmental policies critical to Telcos – Vodafone has reduced the average time taken for the
(April 2009)
social awareness, legislation, cost and revenue. rollout of new base stations as a consequence of its
3 The Climate Group on
This suggests that going forward Telcos should target proactive and sensitive approach to the consultation
behalf of the Global
emission reduction in order to deliver more traditional period, particularly with regard to environmental
eSustainability Initiative
(GeSI) – SMART 2020:
transformation objectives, such as cost reduction, concerns. This illustrates the potential for environmental
Enabling the low carbon
increasing revenue and enhancing brand equity. policies to be a source of competitive advantage.
economy in the information
Some good progress has already been made in this
age (June 2008)
space but more is needed. Key initiatives to date include According to a recent Verdantix report,
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a third of their
4 Ovum, Sally Banks – Green
the development of collaborative working technologies, business customer panel stated that the sustainability
Telecoms: strategies and
use of solar panels and wind turbines to power mobile credentials of Telco suppliers were a “significant
implications for operators
(December 2008)
base stations, development of increasingly energy influence” on spending. Although price and
efficient network equipment and voluntary certification performance are still the main influencers of purchase
5 Interview with BT
of progress made against key sustainability metrics. decisions, there is clearly a shift towards customers
Innovate, 14/09/09
Yet while these are critical tools in addressing the issues wanting to do business with green suppliers.
6 A.T. Kearney in
of climate change, the objective of this paper is to
collaboration with
highlight those challenges that are likely to dictate
Professor Werner Kunz of
the University of
market performance in the next 3-5 years and to
Massachusetts – Why Go
stimulate discussion around how Telcos should respond.
Green? (2009)
7 Verdantix – Green
Quadrant: Sustainable
Telecoms Europe (May
2009)
© 2009 Deloitte LLP
2
. All rights reserved. ii
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