Telcos need to work harder to reduce their carbon footprint as they make AI advancements, new STL Partners research shows
4 min read- Operators make progress towards their sustainability goals but there is a lot more to be done on this journey, finds STL Partners
- Telcos should pay close attention to AI developments which already take a toll on tech companies’ environmental sustainability efforts
- Telefónica keeps its crown across various key sustainability-related efforts
- In its latest research, STL Partners emphasises on the importance of the human element of sustainable goals
Drawing insights from more than 70 companies globally, STL Partners’ latest update to its ‘Sustainability scorecard’ offers a holistic overview of the maturity in sustainability reached by telcos and their peers, including vendors, infrastructure players and technology giants.
LONDON – 16 October 2024 – Telcos need to work harder on their carbon reduction journey if they are to offset the negative impact of AI developments that already put a strain on tech companies’ environmental sustainability efforts, urges STL Partners in its latest research.
This guidance comes as the research and consulting powerhouse has found in the latest update to its ‘Sustainability scorecard’ that AI is already having a “tangible effect” on greenhouse gas (GHG) emissions produced by some of the largest tech giants, including a 112% increase in the total scope 2 emissions of Meta, Microsoft and Alphabet’s Google between 2019 and 2023.
At the same time, operators are quick to move towards implementing AI-as-a-service (AIaaS) which poses the question whether a similar impact will shake up telcos’ net-zero efforts.
“Telcos are beginning to build generative AI into their own activities as well as their enterprise service portfolios, providing content summarisation or creation for enterprise sales and marketing teams, or even offering ‘GPU-as-a-service’ to enterprises. Those that are successful in embedding these heavy-duty AI tools into their own processes and enterprise services could face similar challenges to the hyperscalers with rising emissions”, cautions Amy Cameron, STL Partners research director and co-author of the sustainability scorecard.
To mitigate this risk, she suggests that operators should “put processes in place to assess the energy consumption versus business benefit of generative AI deployments, use smaller language models where possible and integrate a carbon tax into the total cost of ownership when procuring any new infrastructure to support these services.”
In another concerning insight, the company has discovered that only 49% of the examined telcos have publicised responsible AI frameworks compared to more than 85% of vendors and tech companies. Therefore, beyond mitigating AI’s impact on emissions, “operators must also establish frameworks ensuring they utilise AI in a responsible and ethical manner”, argues George Glanville, analyst at STL Partners and co-author of the scorecard.
In addition to the environmental aspect, STL Partners’ scorecard update depicts the landscape in the market in terms of other elements that make a company sustainable – and offers insight into best practices in each area.
Among its key findings is that Telefónica remains the most sustainable company in the telco realm, showing progress made in key criteria, such as board and employee incentives related to sustainability goals, issuance of green bonds, and enhanced inclusion, diversity and governance efforts.
BT is breathing down Telefónica’s neck with highest scores measured in terms of board-level and employee incentives, enablement and collaboration, while Google ranks third with top performance in collaboration.
Overview of top three scoring companies
Furthermore, STL Partners’ research suggests that while telcos and their peers are improving the gender diversity across their teams, there is still a long way to go. Top performers in this area are Netflix and Globe Telecom which are close to achieving gender parity both in senior management and across their total workforce.
You can find out more insights from the sustainability scorecard by downloading an extract here. For media enquiries, click here to get in touch with our team.
