As a reflection of this finding, we have seen the Legislation
emergence of sustainability indexes such as the Dow The increasing social and political awareness of
Jones Sustainability Index (DJSI), and the Carbon environmental issues has led to a stream of legislation
Disclosure Project. Furthermore, Wal-Mart recently and sustainability accreditation schemes; the UK has
announced their own Sustainability Index which will made good progress to date in pursuing a number of
require suppliers to provide information such as water legislative initiatives with programmes such as the
usage, greenhouse gas emissions, packaging and source Carbon Reduction Commitment (CRC) and
of raw materials. These indices and programmes are ‘Environmental Reporting Guidelines’. However, these
increasingly being used to guide ethical investment initiatives have perhaps not enjoyed the coordination
decisions and as such, the ability to evidence good that was originally intended and as such the current
environmental performance is likely to be rewarded by legislative framework is highly fragmented and
opening up new sources of funding. So it is critical that contradictory in some cases.
Telcos make rapid progress in improving their
environmental performance in order to best position To illustrate this, the CRC aims to catalyse
themselves for future growth. improvements in energy efficiency among the top
5,000 largest UK organisations through mandatory
From April 2010 the Carbon Reduction Commitment emissions trading, providing reputational and financial
(CRC) cap-and-trade scheme will not only provide incentives for firms to reduce emissions from 2008
financial incentives to organisations to perform better, levels. From 2010, participants will be ranked according
it will also create reputational incentives by publishing to their performance in a league table which will be
league tables of the best and worst performers. made available to the public. The financial incentives
This will further fuel public awareness and highlight take the form of a bonus or penalty payment based on
how well organisations are responding. The key point relative ranking, in addition to the potential cost savings
here is that an organisation’s performance will no from the implementation of emission reducing
longer be judged in absolute terms, but will be judged initiatives.
relative to their peers.
While directionally correct, the CRC legislation is
Telcos have responded in recent years by placing challenged in a number of ways:
increased emphasis on CSR initiatives, particularly in
relation to the environment. Activities include creation P )@>K
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However, in order to fully capitalise on the strategic direct emissions even if they are more efficient and
advantage that green credentials offer, Telcos will need reduce overall emissions.
to gain the confidence of their customers at a time
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will need to do two things; the first is to implement and Electronic Equipment (WEEE) directive which came
green policies in a consistent way across every area of into force in January 2007. The WEEE regulations
the business. This will require Telcos to set green impact Telcos by restricting the use of certain hazardous
objectives at the heart of their business and substances in electronic telecommunications equipment
transformation strategies and follow through with and by encouraging equipment which is cheaper to
targeted initiatives. This will in turn require a clear recycle.
understanding of what changes are required to drive
sustainability/environmental benefits into the business.
Secondly, Telcos will need to evidence the impact of
their sustainability initiatives through a number of
… there is an opportunity to take this
operational metrics that are aligned to both the
further by linking licence costs with an
operational changes and the key drivers of business
benefit. As some sustainability accreditation schemes operator’s green performance. This would
are relatively narrow in focus and based on self-
certification, Telcos will find it increasingly difficult to
mean that the stronger the operator’s
convince customers or investors of their credentials.
green credentials, the cheaper the licence
As such, they will need to broaden the assessment
criteria to accommodate a wider and more targeted set would be.
of operational metrics, in addition to pursuing more in-
depth independent verification than is the case today.
© 2009 Deloitte LLP. All rights reserved.
iii
The line goes green 3
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