Telenor will reduce the carbon intensity of its global operations with 40 per cent by 2016, compared to the 2007 level. Telenor is expecting continued strong growth in the business and in network traffic, but the total emissions in 2016 will be reduced to equal the already low 2007-level.
“Our products and services can be a part of the solution to the climate crisis. To do this, we need to start with ourselves,” says Head of the Telenor Climate Change Programme, Jon Erik Haug.
The group executive management of Telenor has adopted an ambitious target for reducing Telenor’s internal carbon intensity of its operations by 40 per cent by 2016, compared to the 2007 intensity level. The agreed emissions reductions will be achieved through investments in network updates, renewable energy, increased IT and buildings energy efficiency and purchase of green electricity and CDM-licenses.
“We see that our customers, owners, partners, and employees increasingly expect us to have a clear climate change strategy and that we take the necessary measures to ensure continued sustainability, says Jon Fredrik Baksaas, CEO of Telenor. “At the same time, we will continue grow the business. To achieve both, we need to reduce the carbon intensity of our operations significantly in the course of the next eight years. For this, we need an ambitious and credible goal for what we are going to achieve. This is the first step – now we will immediately take measures to reach the goal of a 40 per cent reduction in carbon intensity,” says Baksaas.
72 per cent projected reduction
Telenor is a company which already emits little CO2 at around 600,000 tons in total for the group. With the expected growth in traffic and customers, the new emissions reduction target will mean a reduction of 72 per cent in absolute tons of carbon, compared to the projected emissions in 2016 if no action is taken. This is because corporate and traffic growth is expected to be strongest in markets where energy production largely relies on fossil fuels. At the same time, Telenor’s biggest market, Norway, emits very little CO2 from electricity consumption, as most of this electricity is produced by hydropower. By achieving the emissions reduction target, Telenor’s operations will be brought into line with the UN global recommendations for the emissions reductions necessary to reach its global sustainability target by 2050.
The climate target will now become a part of Telenor’s key performance indicators at group level. The reduction in carbon intensity will be measured by the amount of CO2 emissions per “value added” (value added is expressed as EBITDA + employee costs). This measurement method is recognised by the UN International Climate Chance Panel and can be compared to the amount of greenhouse gas emissions per gross domestic product.
Sun, technology and green power
The strategy to reach the emissions reduction goal involves investments in several areas, such as updating networks, investments in renewable energy for base stations, and purchasing green electricity and CDM-licenses. Among other initiatives, Telenor is developing a pilot project using solar powered base stations in Pakistan. In addition, the company will consider purchases of CDM-licenses. At the same time, Telenor will increase its work to develop solutions that can contribute to reducing CO2 emissions in other industries and for private customers.
“We know the ICT-industry has a considerable potential to reduce emissions in other industries. This is emphasised by the UN climate panel in their latest report, as well as by analysis conducted by McKinsey & Co. To become a part of the solution to the climate crisis, it is imperative that we start by taking responsibility for reducing our own internal emissions, says Jon Erik Haug, head of Telenor’s Climate Change Programme.
Haug also emphasises that climate change measures may be profitable over time:
“We are going to invest in renewable energy and new technology that improves the energy efficiency of our networks and our buildings. At the same time, we see that these investments can over time have a positive net present value, through reducing our consumption of electricity and diesel power for generators,” says Haug.
As part of reducing internal emissions, Telenor will invest in renewable energy, including a pilot of solar powered base stations in Pakistan. Telenor will also continue to investigate the potential for other renewable energy sources.
Jørgen Randers’ recommendation
Jørgen Randers, professor at Handelshøyskolen BI with climate and sustainability as core areas of expertise, has assisted Telenor to choose a good key performance indicator for reducing the greenhouse gas emissions.
Randers recommends businesses to measure emissions per value added as the indicator of their sustainability.
‘”Emissions per value added is an expression of how efficient a company is with respect to creating value without greenhouse gas emissions. This indicator also takes into account future corporate growth and at the same time allows businesses to compare their own performance to global guidelines for sustainability,” comments Randers. “We see that leading companies have started to use this measurement method and I think more and more will follow,” continues Randers.
Telenor is now working to initiate measures to reach its emissions reduction target. From 2009, the climate change work in Telenor will be lead by the group corporate strategy function, to secure that climate change thinking becomes an integral part of business strategy.
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