Collective action is needed to cut Scope 3 emissions in telecoms
As a major consumer of energy, the telecoms sector has long been pursuing initiatives to reduce its impact on the climate. Most operators have implemented measures to reduce their Scope 1 and Scope 2 (direct and indirect) emissions, but Scope 3 is often overlooked.
These emissions relate to operator supply chains, and while this of course makes them difficult to address, they are typically the largest contributor to an operator’s overall carbon emissions.
Individually it can be difficult for operators to address Scope 3, but organisations such as the Joint Alliance for Corporate Social Responsibility (JAC) enable operators of all sizes to share best practices and exert collective influence on suppliers to improve transparency and help reduce Scope 3 emissions in their supply chains. We spoke to John Spear (pictured), the General Manager of JAC and Managing Director of EPI Consulting, to learn about how the organisation helps drive collective impact on Scope 3 emissions.
Why are Scope 3 emissions so overlooked?
A telco is a massive user of electricity. The first step is for them to decarbonise their own operations - the electricity that is running their network. Depending where you are in the world, that can be easier or more difficult, but particularly in some of the developing world we are seeing quite a drive, and that's coming from the manufacturing sector. People want to put in place a power purchase agreement for decarbonisation in places like Vietnam, Indonesia etc, because they make a lot of stuff, and that's the only way they're going to get the carbon down.
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A typical telco will address Scopes 1 and 2, and when they've done that, they get left with between 70% and 90% of their carbon footprint in the supply chain. You're also seeing a whole raft of solutions now which come packaged with renewable energy - maybe not the core network, but base stations, etc. But if you want to roll out network rapidly, and you're doing it in challenging environments, that then leaves you with this rump of the carbon in the supply chain.
There’s the social aspect, but also consumers and populations are concerned about it, although less so in the developing world. The biggest factor is capital: if you want to roll out networks, you need a lot of money. I think the reductions in interest rates will only be relatively short term, and then they'll be back up again – they’ve gone from easy, free money to expensive money.
Telcos are tapping up green bonds and green investment, and that's a global market, so even in the developed world, you've got to get your capital from somewhere to roll it out. [Green bonds are] attractive investment options, and [telcos can] get half a base point off repayments, so they’ll go for that. That comes with a requirement to have in place and hit targets, because it's green money.
We all know about the benefits that you put a mobile signal in somewhere, people can set businesses up, work from home. It's one of the most important economic developments, and someone's got to fund that. Green funds in Sub Saharan Africa, or the Far East, are hitting social targets, bringing connectivity, healthcare, education, but [not] at the expense of a carbon footprint. It's all funding driven.