Omdia view
Summary
Individual company action isn’t by itself enough to achieve the level of change that’s needed to address the many environmental, social, and governance (ESG) challenges. Rather, to have maximum impact, ESG strategies require joint effort and collective action. Meanwhile, if service providers can develop innovative products through an ESG lens, they can offer new capabilities that will help to protect the natural environment.
The joint-effort ESG opportunity
Individual service providers can gain a level of competitive advantage through their own ESG initiatives. Lowering carbon emissions, recycling devices and equipment, and addressing digital inclusion each offer service providers a clear opportunity to improve their market position relative to their peers. But service providers also have the opportunity to come together to bring about the kinds of remedial measures that are increasingly needed in many areas of ESG. Whether that’s taking environmental action to lower carbon emissions, monitoring at-risk natural habitats, or bridging the digital divide, the scale of these problems and a myriad of others is immense. As such, they necessitate nothing short of the kind of joint action the telecoms industry excels at when it devises a new technology standard and covers most of the globe with it.
Opportunities for collaboration exist in many areas. Among the ones that have the most potential and here-and-now feasibility are device recycling, infrastructure equipment recycling, and the development and launch of new technology that monitors the environment. Because many telcos and their suppliers are already active in each of these areas, those that aren’t have a ready-made template for how to approach these opportunities.
On device recycling, Orange, Deutsche Telekom, Vodafone, and Tele2 to name just a few companies already offer a clear how-to guide on how to implement such a strategy. As does the GSMA’s recent (June 2023) recycling initiative that just 12 operators globally signed up to at launch. On equipment recycling, Orange (with Nokia) and BT (with Cisco) are just a few examples of companies that are showing how telcos can set up internal marketplaces to reuse or recycle equipment.
And in Omdia’s latest research into service providers’ ESG strategies, we identify how some service providers are innovating with mobile technology to help protect the natural environment by bringing to the table new ways to monitor its health. Last year saw, for example, Vodafone develop technology that helps protect forests from the ravages of wildfires, and also to monitor the quality of important water resources so that action can be swiftly taken if and when needed to protect it. Similarly, T-Mobile USA is using drones connected to its 5G network for early detection of wildfires in rural areas. Programs such as these are truly inspiring because they show both that technology innovation is improving the quality of our natural environment and how it can be done.
Initiatives like these will become drops in the ocean unless a majority of individual companies form a critical industry-wide mass in identifying both the easy wins (device and equipment recycling) and the more challenging, but very doable, goals of using technology to help protect the environment. The size of the ESG challenge means service providers can’t do enough by themselves to have the kind of impact that’s needed. If companies invest to act in these areas individually, they can achieve something meaningful. But if they act together, they can achieve much more.
ESG activity in 2022 almost doubles on 2019’s
The impactful and innovative individual company ESG initiatives we saw in 2022 formed part of broader trend of increasing year-on-year activity. Service providers were more active in 2022 in launching ESG programs than they were in 2021, with 35% more initiatives compared to 2021. There was an increase of 84% between 2022 and 2019, when Omdia started tracking service provider ESG activity. Service providers including Verizon, Vodafone, and China Unicom have been particularly active in launching ESG initiatives over the period tracked by the research.
The overall increase in activity we’ve identified shows both the extent to which service providers are responding to the growing need for measures to reduce their impact on the environment and how they are striving to improve their contributions to the societies they operate in. Indeed, social initiatives increased by 73% year-on-year in 2022, further underlining how service providers are increasingly active in the communities they operate in.
Looking at the whole ESG spectrum, specific areas that saw strong growth in activity in 2022 include green energy, digital inclusion, disaster relief, diversity, green bonds, and health (see Figure 1).
Figure 1: ESG activity by area, 2019–22
Source: Omdia
Appendix
Further reading
Environmental, Social, and Governance Service Provider Index – 2022 (June 2023)
Author
Paul Lambert, Principal analyst, Service Provider Strategies & Regulation