Sharing is caring for the planet: Learn from Singtel’s sustainability approach

Sustainability is an area where collaboration is more important than competition. Recently, Singtel has shared its approach to embedding sustainability in the fabric of its organisation, ensuring it is taken into account in decision-making at all levels and operations. This article gives a glimpse of the findings of the case study developed by STL Partners.

Our common sustainability goal brings unique openness

Sustainability is a unique goal. In my almost two decades in the technology and telecom industry, I haven’t seen another example of an area where fierce competitors share their successes and best practices with their peers. The urgency of the climate change problem, and the realisation that we are all in this together, have led to openness, unusual to all other operational areas of the telecom business. Even the competition authorities recognise that companies need to collaborate to pursue our overall net-zero target.

We should acknowledge, of course, that there are other reasons why telecom operators might be open to sharing what they are doing for sustainability. Being proactive and pre-empting upcoming legislation gives a positive sign to investors, regulators, partners and customers. And being quite pragmatic: sustainability is not free – it is an investment and those that make it would naturally like to put pressure on their competitors to create a level playing field, so that “we are all in this together” financially, too.

In this spirit of industry collaboration, Singtel, a leading telecom group in Singapore and Australia, has recently shared its approach to sustainability with STL Partners, allowing us to share it further in our comprehensive report Embedding sustainability into the telco fabric: Learnings from Singtel.

Where is Singtel a leader in sustainability?

Different telcos and other technology companies focus on different elements of sustainability, mostly because only big groups can afford to cover all bases. STL tracks the progress of 73 companies in the area of sustainability through the Sustainability scorecard, which evaluates ambitions, efforts and achievements in eight areas.

There are two areas where Singtel is achieving top scores in STL’s scorecard.

1. Holistic sustainability reporting: Singtel has been providing detailed reporting, above and beyond what is mandated by the law or the stock exchange rules, for over a decade now. For example, it has adopted the IFRS S1 and S2 reporting standards, related to climate change, earlier than required from telecom operators in Singapore.

2. Creating sustainability-related incentives for the board and employees of the company: Singtel is among the 12% of companies in STL’s scorecard that have sustainability-based elements of both the short-term and long-term incentive plans. Importantly, these incentives are not limited to the members of the top management but trickle down into the organisation, stimulating employees to think and act with sustainability in mind. This is an excellent example of embedding sustainability in the fabric of the organisation.

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How Singtel gives greener projects a chance?

One of the most interesting things Singtel does is deploy an internal carbon price when evaluating some of the projects it considers for investment.

The logic of this approach is simple. When evaluating two alternative investment projects that render the same results (for example, two different designs of a data centre), it makes sense for the company to go for the one with a lower total cost of ownership and secure a higher return on the investment. However, this might lead to the deployment of a less sustainable design, as the more sustainable products and components might carry a higher cost, for instance, due to local manufacturing, stringent supplier checks, or greener logistics. In addition, a more energy-efficient project might not save enough energy by the current (or expected future) price to offset the higher upfront cost of the equipment.

However, adding a carbon price, an internal equivalent of a carbon tax, to both projects might tip the scales towards the greener project. In the example below, selecting the greener project leads to a sizeable reduction in utility consumption across 20 years of the data centre’s lifespan.

Illustration of the impact of adding carbon price to a project

Source: STL Partners

In the future, Singtel might consider using a ‘purist carbon budget’, in which all projects are taxed with a carbon tax: the higher the total emissions associated with a project, the more tax it has to “pay” in the budget fund. The carbon budget can then be used to subsidise green initiatives, which may not on their own show enough return on investment to compete successfully for funding.

Sharing best practices for the thorny road ahead

At STL we commend companies that share their best practices and initiatives when it comes to sustainability. The road to keeping global warming to a minimum is difficult. Learning from peers in the industry is a great way for telecom operators to avoid the mistakes of others and to take shortcuts to sustainable operations.

Marina Koytcheva

Marina Koytcheva

Director, Research

Marina works across STL Partners’ research portfolio, with a specific focus on the Executive Briefing Service, consumer services and sustainability. She joined STL Partners in 2023 with 18 years of experience as a market analyst, first at Nokia, and then at CCS Insight where she led the market forecasting practice across all technology areas and modelled the impact of major global disruptions. She has wide expertise across telecoms, hyperscalers, device markets, consumer behaviour, and the impact of macroeconomic factors on the tech industry. Marina holds an MSc in Finance and Economics, and an MBA.