Business must lead in move to lower-carbon energy sources

By Joakim Reiter, Vodafone Group Director of External Affairs

No longer is climate change a remote issue that is a problem for future generations to tackle; instead it is one of the issues that will most likely define the next century. It is one of the biggest risks to growth in developing countries and will impact our families’ health and livelihoods, with access to food and habitable locations expected to change dramatically over the coming years.

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The 2016 Paris Agreement on climate change committed world leaders to limit global temperature rises to no more than 2°C above pre-industrial levels. However, the pledges made to date are insufficient to achieve the required emission reductions, leading to potentially catastrophic consequences. And achieving the required reductions in greenhouse gases is particularly challenging in the context of continuous economic and population growth.

Urgent action is needed – the business community must play a vital role in delivering material impact and must lead the way in a much-needed move to lower-carbon energy sources.

Back in 2015, we made ‘Energy innovation’ one of our three core global transformation areas, with a focus on increasing our energy efficiency (as we rely on on-grid electricity for much of our energy needs, with most of this still generated by burning fossil fuels) and enabling businesses to reduce their energy use and costs. Today, we are strengthening that commitment by launching two new targets for 2025 – commitments to reduce our greenhouse gas emissions by 40% and to purchase 100% of our electricity from renewable sources.

Further affirming our commitment to become ‘100% renewable’, we have also joined RE100 – a collaborative global initiative led by The Climate Group in partnership with CDP, which unites more than 100 influential businesses committed to 100% renewable electricity, who are working to significantly increase the demand for, and delivery of, renewable energy.

The pledge from major companies is more than symbolic. It is essential for securing the growth of the renewable energy market. Large companies making such commitments and signing long-term clean energy power purchase agreements (PPAs) – where businesses agree to buy electricity direct from renewable energy producers – helps to grow the renewable energy market, as project developers can use these commitments to raise funds to build new projects.

Like other RE100 members, we intend to meet our 100% renewable electricity target by 2025 through a combination of approaches. We will look to sign PPAs with developers and suppliers of renewable energy assets and will purchase renewable electricity backed by renewable energy certificates (RECs). RECs enable companies to match their use of conventional power with an equivalent amount of renewable energy generated. We are also looking to further develop our on-site renewable sources, primarily by installing solar power-based systems across base station sites and technology centres, where technically and economically feasible.

However, as mobile data consumption increases, the challenge for our industry is not simple. We require significant amounts of electricity to operate our services. Every additional device connected to our network and every additional gigabyte of data transmitted or stored represents a potential increase in energy needs. Mobile data traffic has grown 18-fold over the past five years and will continue to rise at a rapid rate, with predictions that, by 2020, mobile data traffic will be equivalent to 15 times the data in the global internet in 2005. As a consequence, it is estimated that, by 2030, telecommunications and IT (ICT) will account for around 2% of total global greenhouse gas emissions, equivalent to the greenhouse gas emissions of the aviation industry.

However, the ICT industry is also expected to be part of the solution. Our Internet of Things (IoT) services are helping customers to manage energy more efficiently and reduce their own emissions. By bringing intelligent interconnection and network control to previously ‘dumb’ disconnected devices and services, we can facilitate more efficient and reliable products and processes, leading to reduced energy and fuel consumption as well as reduced emissions. As these IoT technologies continue to spread through all aspects of daily life, the beneficial climatic effects of the global ICT industry will increase. It has been estimated that the industry could account for a 20% reduction in total global greenhouse gas emissions by 2030.

As well as identifying innovative services for our customers, our challenge is ensuring that business growth does not result in a similar increase in electricity usage. We will continue to work with our suppliers to ensure energy efficiency is considered in the design of new technologies; make energy efficiency a priority when purchasing new products and services; and evaluate emerging technologies which will improve energy efficiency. Our efforts to date have helped to ensure that each successive generation of equipment we use is more energy-efficient than the last. As of this year, our key measure for greenhouse gas emissions intensity improved again, with a reduction in the amount of emissions per petabyte of traffic of 40%.

The contribution of different companies to climate change varies significantly, and companies face different risks and opportunities as a result of climate change. Whatever their situation, all companies need to be engaged on this critical issue. If fossil fuels continue to be extracted at the same rate over the next three decades as they were between 1988 and 2017, recent research found that global average temperatures would be on course to rise by 4°C by the end of the century. This could have potentially disastrous consequences, leading to global food scarcity and economic uncertainty – negatively impacting businesses along with the rest of society.

Joakim Reiter is the Group External Affairs Director of Vodafone. Before joining Vodafone in April 2017, Joakim was the Assistant Secretary-General of the United Nations and the Deputy Secretary-General of the United Nations Conference on Trade and Development (UNCTAD). Prior to that, he spent more than 15 years in the foreign service of Sweden, including as Deputy Director-General of the Ministry of Foreign Affairs, Ambassador to the World Trade Organization and at the Permanent Representation to the European Union (EU). He also served as an EU negotiator with DG TRADE at the European Commission.