Environmental, social and governance (ESG) initiatives have become one of the core focuses for large companies around the world with banks, manufacturers, retailers, and every industry in between developing new ESG departments, initiatives and telecoms are no different.
For telecoms, there is a large focus on the environmental component of ESG and a push for the overall ICT industry to reduce overall emissions. It can be helpful to view this push from the context of the “Greenhouse Gas Protocol” (GHP), a method for accounting for a company’s green house gas (GHG) emissions, developed by the World Resource Institute, in the context of 3 Scopes.
Go deeper with GlobalData
Telecoms companies and the three scopes of emission
Scope 1 is direct emissions from operations, e.g. the burning of fossil fuels to power vehicles. Scope 2 includes indirect emissions related to the purchases of electricity and other forms of energy, e.g. using electricity generated from a coal plant and the Scope 3 is also indirect emissions, but emission from upstream operations of suppliers, and downstream emissions generated by customers using a given companies products or services .
The primary focus here is Scope 2 and what it means for telecoms and how the industry is looking to tackle reducing emissions through partnerships and new technologies like 5G.
ESG – scope 2 and Power Purchase Agreements
Scope 2 relates to the indirect GHG emissions that result from the purchase of electricity, heating or cooling. Telecom companies spend heavily on electricity, with mobile operators spending even larger percentages of OPEX than telcos in general, making scope 2 emissions very relevant for the industry.
One action that many operators are taking to reduce scope 2 emissions, are commitments to sourcing electricity from renewable suppliers, with some even targeting 100% renewable within a short to medium term. One method that is being employed to meet these targets is Power-Purchase Agreements (PPA) with renewable energy providers. These agreements allow a telco to secure affordable pricing for renewable sources of electricity with contract terms typically around ten years.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData5G offers new ESG opportunities
Further, others are looking to build more efficient infrastructure by adopting innovative technology. For example, the power supply to cell sites typically represents the largest contribution to energy consumption for many operators. 5G is offering new opportunities in this space as equipment vendors are investing in new architectures and technologies like free-air cooling or liquid cooling systems to reduce the reliance on power hungry air conditioning.
5G equipment is also getting smarter, with cell sites now able to enter sleep mode automatically when signals are not being transmitted, cutting down on power consumption.
Beyond cooling systems and automated sleep modes, the power stations that run 5G base stations are getting smarter than previous generations, allowing for more energy efficiency. Technologies like modular power stations, with energy scheduling algorithms built in, that can better manage the use of stored power in batteries and drawing power from the grid, depending on the power demands of the base station.
For example China Tower Company, the mobile tower company jointly owned by the three major Chinese operators and Huawei partnered to develop “5G Power” a solution deployed in Hangzhou at new 5G sites that incorporates technologies like modular design, peak shaving, voltage boosting and smart energy storage.
Fiber is replacing copper
Operators are also improving their environmental impact by ditching legacy copper lines for fiber. The copper mining process is very emissions intensive. Beyond emissions generated from the copper industry, copper lines in the ground can leach harmful metals into the environment as they age. Further, the use of all optical switching in fiber networks, sometimes called photonic switching, has further benefits.
Fiber networks using optical switches, rather than electronic ones that require multiplexers and demultiplexers, are more energy efficient. A peer reviewed paper from the 11th International Conference on Transparent Optical Networks, indicated that all optical cross connects could be 40-70% more energy efficient than electrical.
5G, which often relies of fiber for backhaul, is offering an opportunity for telcos to upgrade their networks using more energy efficient optical procuts like Huawei’s OXC +OTN (Optical Cross Connect and Optical Transport Network). These optical platforms, like Hauwei’s, reduce power consumption and enable high bandwidth, low latency connections between mobile sites, cloud data centers and content providers, and will be critical in supporting both consumer and enterprise 5G services.
Related Company Profiles
China Tower Corp Ltd