Telco Sector Can Be Game-Changer on Sustainability, Shrinking Its Own, Other Industries' Carbon Footprints

Skyrocketing Global Data Usage, Propelled by the COVID Pandemic, Is Drawing Attention to the ICT Industry's CO² Emissions, Which Are Currently Twice Those of the Aviation Industry

News provided by

Boston Consulting Group (BCG)

Jun 24, 2021, 00:01 ET

BOSTON, June 24, 2021 /PRNewswire/ -- As global attention turns to the telco sector ahead of the Mobile World Congress, which starts June 28 in Barcelona, new research from Boston Consulting Group (BCG) predicts that the sector will face increased scrutiny for its environmental impact.

A BCG report released today, "Putting Sustainability at the Top of the Telco Agenda," details how the unprecedented global demand for digital communications, accelerated by remote work during the COVID-19 pandemic, has caused the information and communication technology industry to consume more energy than ever before.

The ICT sector is now responsible for 3 to 4% of global CO₂ emissions, about twice the level of the much more heavily scrutinized aviation sector. And with global data use estimated to grow 60% this year, the industry could be responsible for up to 14% of global CO₂ emissions by 2040 unless significant steps are taken to lower the environmental impact of telco and communication technology companies, according to the BCG report.

Within the ICT sector, telcos are responsible for 1.6% of total global CO₂ emissions. Up to 90% of emissions from telco companies come from upstream and downstream activities, such as the energy consumption of their suppliers. To date telco companies have lacked common standards and policies for tracking these environmental impacts.

BCG has today launched its Telco Sustainability Index, designed to capture the four dimensions most relevant to a telco's environmental strategy. The index tracks the company's commitment to sustainability, its emissions intensity and that of its upstream and downstream partners, its elimination of waste, and its customer enablement.

The growth of energy use by data centers is a clear signal of the growing environmental impact of the ICT sector, with BCG predicting that data centers alone will use 8% of global electricity by 2030.

There are strong signals that the industry is increasingly serious about reducing its direct and indirect carbon footprint, the BCG report notes. Most major telcos have signed up to reduce the energy needed per unit of traffic by about 70% by the end of this decade. BCG estimates that action by the ICT industry could eliminate up to 15% of all global emissions by 2030, more than a third of the total emissions reductions needed to meet global sustainability targets. In total 12.1 gigatons of CO₂ could be saved, which would equate to $6.5 trillion.

Roman Friedrich, a BCG managing director and partner, predicted growing consumer interest and pressure will drive ICT companies to prioritize their sustainability strategies.

"Up to this point in time, the telco sector hasn't been subjected to the same level of scrutiny and criticism as other high-emitting sectors of the economy," Friedrich said. "We believe that situation will quickly change. Those telcos that anticipate this shift and put in place meaningful and actionable strategies will reduce their environmental impacts, save costs and win customers."

Franck Luisada, a BCG managing director and partner, anticipates that customers are prepared to pay a premium for a greener telco provider.

"BCG's research has shown that younger consumers are willing to pay a 10% premium for green telco products," Luisada said.

A copy of the report can be downloaded here.

To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or [email protected].

About Boston Consulting Group
Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities. BCG was the pioneer in business strategy when it was founded in 1963. Today, we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholders—empowering organizations to grow, build sustainable competitive advantage, and drive positive societal impact.

Our diverse, global teams bring deep industry and functional expertise and a range of perspectives that question the status quo and spark change. BCG delivers solutions through leading-edge management consulting, technology and design, and corporate and digital ventures. We work in a uniquely collaborative model across the firm and throughout all levels of the client organization, fueled by the goal of helping our clients thrive and enabling them to make the world a better place.

SOURCE Boston Consulting Group (BCG)