ESG: Green energy and digital inclusion lead in Omdia’s telco ESG Index

LONDON (January 8 2021) — Omdia’s first research into service providers’ ESG initiatives finds that green energy was accountable for the highest number of individual measures over the research period, equivalent to 25.3% of the total, followed by digital inclusion (16.7%) and social welfare (16.7%).

Omdia’s “ESG Service Provider Index”, which provides a view on telecoms operating groups and sector ESG initiatives announced from 2019 to November 2020, covers 192 announcements from the largest 15 service providers by revenues.

The research reveals that all fifteen service providers announced at least one green energy initiative, while 73.3% announced at least one measure in social welfare, and 60% announced measures to improve the recycling capabilities of their operations. 

However, diversity and digital ethics are two ESG areas that saw less activity over the research period, with 53.3% of operators announcing no diversity measures, and 73.3% making no announcements around digital ethics.

Governance-focused environmental ESG initiatives such as green bonds enable companies to fund plans to reduce their carbon footprint and source energy from renewable sources. While Vodafone, Orange, Verizon and Telefonica each launched green bonds over the research period, Omdia expects the relatively low levels of industry-wide activity in this area will grow over the coming years as telcos look finance their network modernization plans and other ESG initiatives.

Among the fifteen companies covered in the tracker, Vodafone, BT, Orange, Deutsche Telekom, Telefonica, Verizon, Comcast, and KDDI pledged a date by which they will reduce their carbon emissions to net zero, a major milestone an increasing number of companies are planning for.

Paul Lambert, Principal Analyst at Omdia, commented: “In formulating ESG strategies, service providers have followed a broad range of measures to improve their near-term ethical standing, and, over the mid and long term, reduce their impact on both the environment and their costs by using sustainable energy. 

“Service providers covered in the research have also been active in putting in place inclusion, social welfare, and digital initiatives in ways that enable them to apply their strengths and capabilities in new ways to bring tangible benefits to diverse communities. Looking forwards, an industry that thrives from connecting people can be expected to accelerate its efforts to forge better connections between us, our society and the environment.”  

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