Top five telcos for sustainability in path to net-zero

STL Partners’ 2022 telecom’s sustainability scorecard benchmarked performance of 45 companies (telecoms operators’ and a selection of adjacent market companies) against seven sustainability related criteria. Companies included Telefonica, Verizon, Microsoft, Amazon, KPN, Apple, BT, Meta – see the full 45 companies here.

Sustainability Criteria

STL Partners’ sustainability scorecard benchmarks the performance of a selection of companies against seven sustainability-related criteria which extensibly relate to company commitments to net-zero, biodiversity, and social and governance targets, as well as their activities to enable customers to achieve net-zero ambitions. They are designed to highlight the areas in which the listed companies are more and less mature in their sustainability strategies.

  • Based on this seven criteria, the scorecard shows that companies with a global footprint are generally more mature with their sustainability strategies and energy market dynamics play a big role in companies’ carbon intensity.

Top five sustainability telcos

KPN ranked 4th

stl-partners-sustainability-score-card-top-five-telcos-2022

Source: STL Partners

The sustainability scorecard recognises the top five telecom telecom operators in terms of their sustainability efforts and journey towards achieving net-zero. They include:

  1. Telefonica has been reporting on its scope 1 and 2 emissions for more than 10 years, and achieved its 2020 sustainability targets two years ahead of schedule. Its goal to reach net zero in scope 1 and 2 emissions by 2025, and including scope 3 emissions by 2040 is among the most ambitious in the industry. In 2021 it was on the CDP’s “Climate A List” of 200 best practice companies for the 8th year in a row.
  2. Verizon – Since 2014, ESG factors (split equally between diversity, supplier diversity and carbon intensity reduction) have accounted for 5% of short term incentive rewards for employees. In 2020 this increased to 10% of the STI award for corporate employees — including for their CEO, Hans Vestberg. In 2019 Verizon appointed a Chief ESG Officer, reporting directly into the board, supported by an Executive Climate Oversight Committee. In 2020, Verizon aligned their reporting with the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD). By 2021, Verizon had issue three individual green bonds of $1bn each.
  3. Proximus – Like Telefónica, Proximus scores highly on its transparent and detailed reporting on sustainability KPIs. In 2021, alongside its annual report Proximus published an excel ESG Factbook for the first time, covering energy, emissions, abatement, circularity and supply chain (as well as social and governance KPIs) back to 2017.
  4. KPN uses both short-term and long-term incentives to promote sustainability in the Board of Management. If sustainability targets are met, KPN grants its Board of Management share-based awards. For example, sustainability targets made up 12.5% of share-awards until 2018. In 2018, environmental targets rose from 12.5% of total LTI to 15%.
  5. SK Telecom has evaluated its CEO’s performance on financial and non-financial KPIs for over 5 years, but in 2019 increased social value to 50% of the CEO’s KPI – although it does not specify the contribution of environmental targets to the social value KPI. Nevertheless, the strong focus on social value has likely contributed to SK Telecom’s efforts to begin applying its experience in digital service innovation to carbon reduction. Examples of this can be seen from SKT’s happy habit project and mobility as a service initiatives (see our Telecoms net-zero enablement use case directory for more detail).

How did 40 other telecoms and adjacent market companies score?

This research tool is part of STL Partners’ Sustainability Insights Service, which aims to identify how the telecoms industry can drive growth through sustainability

• It is accompanied by an excel scorecard
• It builds on recent reports, as well as our Telecoms net-zero enablement use case directory