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STL Partners develops sustainability scorecard for telecoms

STL Partners develops sustainability scorecard for telecoms

Telecom consultancy STL Partners released a sustainability scorecard to grade telecoms on the maturity of their progress on environmental goals against other companies to find areas of improvement, which appear sorely needed.

The scorecard measured a total of 45 telecom operators and adjacent market companies on their sustainability credentials across seven criteria:

  • Structured sustainability reporting.
  • Enablement of customers’ reduction in CO2 emissions.
  • Sustainability and diversity commitments and incentives.
  • Public reporting on emissions Scope 1, 2, and 3 with associated emission reduction targets.
  • Green finance.
  • External recognition of social initiatives.
  • Commitment to biodiversity.

By ranking the companies by a score of one to five, with five as the top score, STL Partners says it aims to help telecom operators understand how they stand against their peers and identify where they can improve to reach their net-zero greenhouse gas emissions goals.

The overall top five performers were in order: Telefónica, Verizon, Proximus, KPN, and SK Telecom.

The analysis by STL Partners found most companies fared poorly on the seven metrics, with none achieving the top score on sustainability and diversity commitments and incentives, commitment to biodiversity, and enablement of customers’ reduction in CO2 emissions. Only one company earned a score of five on emissions reporting and reduction targets and 27 percent received a score of one.

With support for green finance, 51 percent of companies achieved a score of one, making it the criteria where companies scored the lowest by frequency.

Despite external recognition of social initiatives having no company that registered as a five, STL Partners found that 40 percent scored a four, which demonstrates a relatively strong performance within this metric.

Structured sustainability reporting was the criteria where companies were the likeliest to score well, with 16 percent taking home a score of five.

The report also found that companies with a global market were likely to have a mature sustainability strategy, with 64 percent of the top 20 rated companies having worldwide reach, followed by Europe, the Middle East, and Africa region (54 percent). Conversely, the bottom 20 companies were predominantly located in the Asia-Pacific region with 67 percent hailing from the region, showing needed improvement.

STL Partners also showed the influence that a nation’s energy grid has on the emissions of a telecom. SK Telecom was the largest polluter by location-based emissions reporting under Scope 1 and 2 due to South Korea’s comparatively low use of renewables in the OECD, while Swisscom reports low carbon intensity because of Switzerland’s use of hydroelectric and nuclear power.

With greater attention placed on digital infrastructure as a major greenhouse gas emitter, the largest corporate forces in the industry, including Amazon Web Services, Google, Meta, and Microsoft joined an alliance of over 70 companies to make progress on reaching carbon neutrality.

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