Price of energy motivates CFOs to embrace green alternatives at KPN and Orange Poland

Money talks – and that might just help the climate crisis, according to executives from KPN and Orange Poland who spoke at Digital Transformation World in Copenhagen on Thursday.

Netherlands-based KPN and Orange Poland, along with many other communications service providers (CSPs), have adopted targets of net-zero emissions by 2040. Pushing for a milestone like this is becoming a much easier sell with the top brass at CSP organizations than it was 10 years ago for one simple reason: The price of energy is sky high, especially in Europe.

KPN has been working to source solar and wind energy for several years, but Russia’s attack on Ukraine and the resulting energy crisis have made it easier to make the case for moving away from fossil fuels, according to Paul Slot, EVP of Network at KPN.

“Definitely this year, with the help of our CFO, all of a sudden it became a financial business case, and that did speed it up tremendously,” he said. “Energy did become more important just because of pricing. Because we’re talking really about numbers that impact the bottom line.”

Orange Poland’s experience has been similar, according to the company’s Chief Climate Officer Jacek Hutyra. (Orange Poland is the only one of Orange Group’s 30 operating companies with this role because the operating company is responsible for fully a third of the entire group’s energy consumption.)

Orange Poland recently has begun signing power purchase agreements (PPAs) with energy providers. PPAs are long-term contracts under which a company guarantees a green energy developer that it will purchase a specified amount of electricity or energy during the contract. This gives the developers the financial resources they need to build new sites.

“We are completely in line with what Paul said – that actually, finance and energy crisis and climate risks go hand in hand,” Hutyra said. “When we were starting our PPA two and a half years ago…the CFO thought it was a bit risky.”

A big concern from the CFO’s perspective was the length of the contact, which was 12 years, Hutyra said. His fear was that prices could increase dramatically over time. So, the first reaction was to wait and see.

“Today, the CFO is the number one champion for PPA,” Hutyra said. “Really, it’s sad that we have to learn the hard way that it’s important for climate, but … at the end of the day, the planet doesn’t care what the motivation was. If it’s to protect the bottom line and cost, perfect – as long as we reduce the overall total emissions.”

Read this interview on Inform to learn more about Hutyra’s role and goals.

Lear more here about how TM Forum supports its members in enabling sustainability impact across the telecoms industry.