On 8 September, GSMA Europe hosted a virtual Mobile Meetings Series focused on the ICT industry’s role in helping Europe achieve its climate neutrality objective by 2030. The debate addressed the priorities for the sector’s decarbonisation strategy, which include measures to increase energy efficiency, the integration of sustainable supply chains, as well as the ICT sector role as an enabler of other service and industry sectors’ decarbonisation strategies. This blog provides an overview of the main issues raised during the discussion carried out under the Chatham House rule.
The growth of the ICT sector in recent years has been unprecedented and is projected to keep that steady pace. However, growing concerns about the industry’s environmental footprint, partly because new technologies have become increasingly energy intensive, have prompted a wide-spread look into alternative energy sources. One way to reduce the sector’s emissions lies in replacing fossil fuel consumption with renewable energies. Given the abundance of renewable energy in Europe, the sector could realistically and rapidly accomplish such a transformation.
However, reducing ICT sector carbon emissions goes beyond meeting energy efficiency goals and includes more complex challenges, such as finding ways to ensure sustainable supply chains. Many ambitious climate activities are already taking place across the ICT industry in line with the GSMA’s commitment to move the entire mobile industry to net-zero carbon emissions by 2050. Substantial steps have already been taken with over 50 mobile operators, representing two thirds of global connections, having disclosed their climate risk through the Carbon Disclosure Project (CDP). Additionally, to date, 52% of the industry by revenue has set science-based targets that align with the Paris Agreement of United Nations Framework Convention on Climate Change; another 26% of the industry established an even more ambitious net-zero target. On supply chains, GSMA has partnered with the CDP and the Joint Audit Corporation to engage mobile operators with suppliers on climate disclosure and climate target-setting. A pilot initiative is also now in operation to establish an eco-rating for mobile handsets.
At company level, sustainability is now an integrated part of many ICT companies’ business models. Such holistic approaches mean that despite increased use of energy-intensive technologies, companies can still meet their carbon neutrality targets. Data centres, which are both the sector’s most energy-intense player and a crucial enabler of smart technologies, are also implementing its own ambitious emissions reduction strategy. In particular, the European Data Centres Association has developed an ambitious self-regulatory framework including energy efficiency targets; the move to 100% reliance on renewable energy by 2030, and a recycling target of 100%.
Overall, the ICT sector acknowledges the need for even greater sustainability in their business operations including in the very design of products and in the delivery of services. These efforts however must be complemented by other actors in the supply chain from servers to data centres. Moreover, enabling investments and a clear legal framework are both necessary foundations for continued innovation to further advance industry-led decarbonisation initiatives.
Under the EU Green Deal, the European Commission (EC) considers the ICT industry as a priority for the circular economy given the sector’s high climate impact. Two important elements for the EC are electronics for consumers and data centres. To counteract the fact that 80% of a smartphone’s environmental impact is produced before a device reaches the consumer, its life cycle must be significantly extended and recycling a priority. The EC recognises the fundamental role of data centres in the growth of the ICT sector and the roll out of Europe’s digitalisation strategy. While cloud services consume 1-2% of Europe’s total electricity consumption, this percentage will rise as the ICT sector continues to grow, so European regulators emphasise the need for additional measures to increase resource efficiency and the durability of data centres.
During the discussion, Finland was cited as a positive example of national-level initiatives that are effectively addressing the current challenge of balancing the continued development of digital technologies and the environmental implications of such growth. The country is committed to becoming climate neutral by 2025, ahead of the EU’s target. To help deliver this target, Finland’s IT sector is concentrating on three main pillars of actions: the availability of fossil-free electricity to replace fossil-based processes; the full use of technological solutions and data; and the importance of a stable investment framework underpinning the green industry transformation.
Participants emphasised the importance of ensuring fact-based regulation, noting that even within the sector there was some confusion about emission growth forecasts making scientific studies all the more important such as a recent industry report indicating the electricity consumption of the digital economy could rise to 7% by 2030. Moreover, any rise in energy consumption by ever-smarter technologies may be countered by their enabling role in other sectors (i.e. the automotive and healthcare) to make full use of digitalisation to advance their own net-zero ambitions. In this context more cross-sector collaboration is needed to identify and address common challenges in order ultimately to make the most out of the opportunities for the overall transformation to a green economy.
Participants also discussed the need for further regulatory harmonisation across the EU to facilitate the green transition notably regarding climate reporting methodology, transparency and disclosure requirements. Voluntary measures and private sector led initiatives, such as the GSMA’s provide effective examples of how to set common goals and a framework to achieve the climate neutrality.
The ICT sector argues as well that policy efforts should shape an investment environment that spurs innovation and capability. In this context, participants pointed to the upcoming classification system for sustainable activities, the EU Taxonomy which should provide clear guidelines and reporting obligations to identify investments eligible for sustainability and growth investments. Of particular interest to the mobile sector is knowing how 5G investments would be classified in the classification. The EC will issue a Delegated Act by the end of 2020 which will set out the screening criteria for each EU environmental objective that will identify the list of sustainable activities to receive authorised investment aid. In preparation for this regulation, a dialogue between the EC and the mobile sector would be useful.
Overall, the discussion demonstrated how the mobile sector and other ICT stakeholders together with EU policymakers are working to achieve ambitious sustainability and carbon neutrality objectives. Not only has industry already put in place self-regulation and concrete objectives, but these reflect and reinforce the EU and national policy priorities of sustainability and growth introduced to counter both climate change and the economic impact of the COVID-19 pandemic. A continued alignment of actions, interest and dialogue will help to ensure the green transformation of Europe’s economy.
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This event is part of the GSMA Mobile Meetings Series which are small-scale, invitation-only meetings that provide a setting to explore, from a broader stakeholders’ perspective, issues that are central to the development of the mobile industry.
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