Leading CSPS outline their approaches to ensuring a sustainable supply chain
Leading CSPS outline their approaches to ensuring a sustainable supply chain
Executives at BT, Deutsche Telekom and Telefónica underlined the importance of looking at the entire supply chain in a holistic way if sustainability targets are to be met, including reducing Scope 3 or indirect emissions that occur throughout a company’s value chain.
Speaking during The Green Network Summit organised by TelecomTV, Cyril Pourrat, Chief Procurement Officer at BT, observed that a large proportion of the group’s emissions come from Scope 3.
“The supply chain is key because the services that we are providing to our customers are mainly built on products which are provided to us from our supply-chain suppliers,” Pourrat said. He also noted that people are even more sensitive about sustainability issues following the COVID-19 pandemic. “It’s at the top of BT’s agenda,” he said.
Pourrat added that operators are already making huge efforts to embed “circularity” into the design of products, ensuring that all manner of devices can be recycled, refurbished, and brought back into the market.
Fernando Valero, Global Supply Chain Director at Telefónica, agreed that operators are no longer operating in isolation and must pay attention to the overall ecosystem of vendors and suppliers when constructing sustainability agendas. He noted that the supply chain “has more than a 50% impact on Scope 3”.
Operators should focus more on what he described as ecosystem resource planning, rather than enterprise resource planning alone. “It’s more reliant on the collaboration that we have with all of our partners, both upstream and downstream,” Valero added.
Saima Ansari, Senior Partner Manager at Deutsche Telekom and Lead of Green Future Networks project at NGMN Alliance, agreed that CSPs should insist that their suppliers have goals that align with their own agendas. “We are all part of the same journey, and we will be able to achieve the goals that we have set for ourselves only if our suppliers also have set them up,” she commented.
Strengthening the weakest links
Tony Darcy, Head, ESG Enablement and Communications at Nokia, added that companies are only as strong as their weakest link. “It’s not called the supply chain for no reason,” he pointed out.
Although Darcy noted that the bigger suppliers like Nokia have been working closely with operators on environmental matters for a number of years, he described how a perfect storm of political unrest, the pandemic and the increased focus by investors on sustainable development have made sustainability throughout the supply chain even more urgent than before.
CSPs around the world have committed to end-to-end sustainability goals and net zero, yet it can take years to achieve these objectives because of the huge number of companies involved in supply chains. Darcy observed that in 2021, Nokia counted around 11,000 companies in its global supply chain.
One of the most cumbersome tasks is tracing all the different suppliers and ensuring that they are implementing best practices when it comes to reducing emissions. Pourrat noted that BT and other operators are already using blockchain technology to onboard vendors and are able to ask questions about ESG risk from the outset.
By using such tools in a collaborative way, Pourrat suggested that operators will be able to reduce the time it will take to achieve the longer term goals.
He also noted that tools and applications are increasingly available that would enable even smaller enterprises to collect information in an affordable way, “which is needed to help the world’s supply chain to work well together.”
In terms of other practical steps that operators can take to ensure a green supply chain, Ansari said CSPs can encourage suppliers to disclose their carbon emissions using the carbon disclosure project (CDP). The second element, she said, would be to have the same level of data granularity at suppliers, “because without that you are not able to really compare and also identify the action that you need to take”.
For its part, Deutsche Telekom is taking sustainability into account as a key criterion in its procurement decisions. This means that sustainability is evaluated along with technical and commercial aspects. Ansari said this sends a strong message to suppliers that the operator is making business decisions based on this information.
Given the size of the task facing operators, Pourrat said it is also a good approach to focus on efforts that are already working well. Here he cited the Joint Audit Cooperation (JAC), an association of telecom operators that aims to verify, assess and develop sustainability implementation at key ICT suppliers. Founded in 2010 by Deutsche Telekom, Orange and Telecom Italia, JAC now has 26 telco members, including BT and Telefónica.
Ansari also pointed to a document recently published by the NGMN on telco supply chain sustainability. Describing it as a blueprint for the industry, she said the report outlines the details and challenges in the industry, and provides guidance on the steps that can be taken.
Getting to net zero
Meanwhile, a second panel at The Green Network Summit tackled the thorny problem of what steps telcos need to take to achieve the status of “net zero” — or bringing down greenhouse emissions to a point where they are essentially close to zero.
Francesca Serravalle, Head of Infrastructure and Energy at Vodafone UK, reiterated Vodafone Group’s goal to be fully net zero for Scope 1, 2, and 3 by 2040. As an interim step, it aims to be net zero in terms of Scope 1 and 2 by 2030.
In the UK, “we even have a more ambitious timeline, as we plan to be net zero for Scope 1 and 2 by 2027,” she added. She also stressed that sustainability has become a key driver in decision-making processes throughout the group.
Philip Laidler, Partner & MD Consulting at STL Partners, said his company’s research shows that the telco industry is, overall, very committed to achieving net zero.
“People want to make this happen. They want to drive towards net zero, but they’re just at different stages in their journey,” he said. “European operators typically are further in their journey, they started sooner, they put more in place. North American, Asia, and Middle East and maybe Africa are further behind. But that isn’t down to commitment, it’s down to where they started, and how far they’ve got is more a function of how long they’ve been doing it.”
In terms of the more tangible measures that telcos can take, Pedro Torres, CTO of Wireless Outdoor Networks for Europe at Commscope, said the decommissioning of legacy copper and 2G/3G networks may take time but brings significant benefits.
“The other thing that you can do is to right size your network,” Torres said. “So instead of deploying the same solution everywhere for your LTE updates or 5G deployments, make sure that you deploy the right solution for each and every site. So it doesn’t make sense to deploy … a large massive MIMO radio” at every site.
Jacek Hutyra, Climate Officer at Orange Poland, ended with an encouraging message for the ICT sector.
“It is challenging. This journey cannot happen overnight, we need time, we need resources, we need efforts, we need commitment … but we can get there. And our situation as the digital industry, in a wide sense, is way, way better than some other industries, take aviation or steel or cement … at least we have solutions. We just need to commit, and to act and to deliver on them … and our solutions can also help other industries to reduce their emissions.”