Business owners everywhere are looking to push energy-efficient operations forward. We are steadily reaching a stage where natural resources are increasingly limited. Ultimately, the onus is on the business world to find ways to sustainably source materials. Not only that, embracing energy-efficient operations and increasing sustainability in general provides opportunities for revenue growth and increased competitiveness.
There are several reasons behind this, the top of which is its attractiveness to new eco-conscious consumers. As this article will make clear, though, there are other benefits to operations to be found in pursuing more eco-friendly practices, namely securing investor confidence through robust Environmental, Sustainability and Governance (ESG) policies.
As a high-growth industry and vital service provider, these issues are particularly relevant to telecoms. Here, we’ll outline an overview of telecoms’ position regarding its environmental impact, the key features of an energy-efficient operations strategy, and how a solid ESG strategy can ensure the business is sustainable environmentally and financially.
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How does telecom affect the environment?
As with many industries, telecoms’ relationship with sustainability is complex; it has a positive and negative effect on the environment. While telecoms have been a vital industry for decades – particularly since the dawn of the smartphone – the pandemic drove enormous increases in usage and bandwidth demands. With 90% of American consumers saying that the Internet has been essential for them since the COVID-19 crisis, it’s clear to see how the growth in connectivity has driven demand. The star of the show, Zoom, showed an increase from 10 million to 300 million users in April 2020. All of those people connecting, conducting meetings online and collaborating in new ways required infrastructure. Generative AI developments and usage are helping fuel that growth further.
One of the biggest growth areas for telcos was the increase in the capacity of data centres. It also helped drive a focus towards cloud computing, increasing flexibility and diversifying storage options. However, this increased use came at a cost. Data centres currently consume around 1-1.5% of electricity worldwide. But, if we hope to achieve net zero targets by 2030, this number needs to come down by half whilst consumption is expected to quadruple. Tackling this issue is especially urgent considering that processing power, storage requirements and connection speeds are on the rise as people demand more and more from their devices.
Meanwhile, the constant cycle of new mobile phones on the market increases the growth of e-waste. Driven by developments being just as related to fashion as to the tech itself, people are still buying new devices in their droves. This manufacturing boom leads to further increases in emissions through resource extraction, particularly of precious minerals which can lead to habitat destruction, and environmental degradation and raises questions about labour conditions in the countries where they are mined.
However, the increased usage of telecom services has enabled more energy-efficient operations regarding the movement of people. For example, there is now less need to travel to work every day, reducing vehicle emissions. Furthermore, there is no longer a need to fly across countries and continents to meet with colleagues or clients. Now, we can connect just as easily through video conferencing apps and collaboration tools, completing work of the same quality, often more efficiently.
As improvements in telecommunications networks are made, they become more efficient. Telcos understand the need to make their network more sustainable and manage demand at a scalable level. This is because, ultimately, it makes business sense. As demand increases, so does the need for the network to support that demand. To reiterate, what’s environmentally sustainable is financially sustainable. This goes hand-in-hand with telecom companies’ need to maintain emissions under a certain level, in keeping with ESG sustainability guidelines.
The growth in smart cities also holds promise for telcos. Linking people and infrastructure requires constant connectivity that only telecommunications companies have the expertise and network to provide. In comparison to 4G, 5G networks offer a much higher bandwidth and lower latency with greater energy efficiency. Furthermore, connected, smart cities optimise energy use, transportation and resource allocation. Arguably, they are a classic example of energy-efficient operations. A telecoms company that shows interest in expanding 5G infrastructure is in a greater position to receive funding according to ESG guidelines.
That said, within cities where the tech is deployed, infrastructure that requires manufacturing involves further emissions considerations. This can include transportation, construction and maintenance of the network. Another area of consideration is the impact of cell towers, data centres, changes to land use and habitat disruption.
What is energy efficiency in operations?
So all these things considered, how can telecoms cope with growing demand while ensuring their operations are sustainable? Organisations of all sizes need to use resources more effectively and responsibly while ensuring that the same outcomes and results are achieved. This, naturally, is a delicate balancing act that requires careful analysis and thorough planning.
This process involves asking questions about how operations can be streamlined and how the supply chain can be more sustainable, both in support of business and the environment. It also involves asking questions about how operations will continue into the future and how they will remain viable.
Some of the key aspects of energy-efficient operations are:
- Reducing energy consumption
Top of the list is one of the most crucial concerns: finding ways to reduce energy consumption throughout the business. This can be achieved by upgrading and renewing equipment, implementing new technologies such as IoT and instilling a sustainability-oriented mindset in operations departments.
This is particularly important for data centre sustainability, where large amounts of energy are required to keep the facilities running efficiently. Added to this pressure on energy consumption is the large amount of cooling equipment they require.
- Optimising office space and equipment
Within the office, managers can focus on where to make improvements with lighting, HVAC systems and other machinery to find inefficiencies. Outside of the office, efficiencies in energy usage can be made all across the supply chain, from procurement and production to delivery. Businesses can work with supply chain companies that prioritise sustainability.
- Smart energy management systems
Building energy management systems (BEMS) are available for companies who want to monitor the energy usage of the office. They can use these systems to find ways to cut costs as well as save energy. They work by collecting data on heat, lighting, moisture etc to create the ideal conditions for office workers.
The data can then be used to offer suggestions on how to maximise sustainability while cutting energy costs at the same time. The metrics can also be used to monitor energy use over time which provides helpful data for ESG sustainability measures.
How does an Environmental, Social and Governance (ECG) strategy help?
These tools are best implemented as part of an ESG strategy, which is the cornerstone of a plan for energy-efficient operations. ESG is the set of guidelines investors follow to ensure that the company they are planning on investing in is a safe bet. There can be many facets to these guidelines, but broadly, they operate within these three main pillars. The first pillar, Environmental, focuses on how the company is performing on their environmental aims and how they are mitigating their effect on the climate crisis.
The second pillar focuses on their social responsibility. This refers to subjects such as diversity, human rights, consumer protection and others. It manages the way a company deals with its people and protects the rights of its workers.
The third pillar looks at the governance of organisations. It asks whether a company’s management structure is set up in such a way that the previous two pillars are supported, plus it looks at labour relations including employee and executive compensation.
Embracing ESG compliance can be a way for companies to position themselves as eco-friendly. Being upfront with clients about your energy-efficient operations implies an openness that consumers trust. Authenticity is also key: the 2015 Volkswagen emissions scandal cost them billions of dollars in fines. It took the car manufacturer years to build back consumer trust and the value of their stock plummeted by up to 30%. The lesson here was that consumers value energy-efficient operations but they also appreciate honesty.
The telecoms industry can benefit from looking at the way data centre sustainability has made advancements in energy efficiency and attracted funding by flaunting its ESG readiness. Innovative solutions in cooling technologies and the way equipment is powered have led to great improvements and made them an attractive prospect. The lesson to be learned, however, is in the way the technology and its capability have been scaled sustainably, inspiring investor confidence. That investor confidence can be transferred into more spending on marketing and attracting more clientele.
Embracing sustainability invites business, investment and trust
In short, following ESG guidelines is recommended precisely because it gives a framework for companies to follow to be more attractive for investment. This does not only apply to telecoms companies but to most industries, anywhere. Spending time looking at the way the company produces its value, from the production of goods to the supply chain means building a more comprehensive approach to sustainability. Having detailed plans in place is attractive for investors because it makes sustainability targets more predictable and therefore a company becomes a surer bet.
Perhaps most importantly, being openly and visibly attentive to sustainability measures means that customers will place greater trust in a company and be more willing to continue investing in it. Hiring a freelance consultant to ensure that the company is on the path to compliance takes the guesswork out of organisational governance and frees up staff to be able to take decisions elsewhere. Take a look at the experts in the Outvise network to see who could help you build a strategy with impact.
Seasoned Data Centre Expert with over two decades of experience in engineering, consulting, and leadership.
Daniel is a driving force for sustainable growth in the technology sector. From reshaping product roadmaps to transforming eco-friendly practices in data centre and hybrid cloud operations, he's committed to making a positive impact on sustainability.