Telecom Giants Dial Up The Heat On Suppliers: It's Not You, It's Your CO2

A telecoms industry body focused on corporate social responsibility (CSR) has called for all companies to take action to reduce carbon dioxide emissions - so-called Scope 3 emissions - across their entire value chain.

The Joint Alliance for CSR (JAC)* is made up of 26 telecoms operators, including founding members Deutsche Telekom, Orange and Telecom Italia, plus British Telecom, Vodafone, AT&T, Verizon, Swisscom, and more.

The group says it wants to see all companies and their supply chains implement new best practices for decarbonization and align their industries with the latest scientific climate evidence.

In a self-congratulatory detail, JAC reckons a survey it commissioned showed that 93 percent of JAC members had committed to net-zero or science-based actions to reduce their emissions, compared to just 43 percent of the Forbes 2000, a list of the top publicly traded companies in the world.

The organization held two webinars last month where members spoke on the importance of bringing down supply chain emissions and issued a call to action for companies and suppliers to get involved.

When it comes to measuring the carbon dioxide emissions from an organization or business, Scope 1 covers direct emissions from sources which it owns or controls as part of its operations. Scope 2 covers indirect emissions, such as from the generation of electricity purchased by the organization. Scope 3 covers other indirect emissions that are not under the organization's control, including those by its suppliers.

Scope 3 is nearly always the big one, according to consultants Deloitte, which has claimed this can account for more than 70 percent of the carbon footprint of many organizations.

For this reason, the webinars were intended to address concerns and opportunities in the industry and JAC members set out practical guidance to improve engagement between global organizations and their suppliers for the purposes of reducing the overall carbon footprint.

BT Group Head of Environmental Sustainability Gabrielle Ginér said that working with supply chains was a priority for JAC members.

"We are reaching out to our suppliers today and as highlighted in the JAC Climate Change report, asking for immediate action on climate and carbon reduction," she said.

Some of the things JAC members are working on include supplier engagement programmes, increasing sustainability criteria on supplier scorecards and adjudication, and developing and embedding sustainability contract clauses, Ginér added.

According to John Spear, boss at epi consulting - which undertook the survey for JAC - working with suppliers to bring down emissions can save companies money.

"If you work on energy efficiency, especially with the high cost of energy at the moment, you can have a 10 to 15 percent reduction in both cost and carbon," he said. It doesn't have to follow that sustainability is a cost, he added. "Actually, it can result in big savings as well."

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Amith Maharaj, CTO of South African telco MTN Group, said the company would "reward suppliers who have committed to the net zero campaign and demonstrated credible plans to get there."

A Telstra representative said it was now looking at all business activities "through a climate lens," and had introduced a shadow carbon price – a theoretical cost per unit of carbon emissions for financial purposes – along with a central budget to prioritize the funding of emissions reduction projects.

It isn't just telecoms companies that are concerned about Scope 3 emissions and how to control them. Earlier this year, Australian software house Atlassian shared its sustainability practices in a charmingly titled booklet.

Last year, Microsoft disclosed the difficulties it was having with tackling its Scope 3 emissions when it published its annual sustainability report, with president and vice chair Brad Smith complaining that "Scope 3 emissions are the most difficult to control and reduce." ®

Bootnote

*Interestingly, the Deutsche Telekom website appears to refer to it as the Joint Audit Cooperation (JAC) initiative.