The telecommunications sector has a significant role in decarbonization, since its services have the capacity to transform the economy, promoting the optimization of resources through innovation and digitalization.
The green and digital transitions reinforce each other. Studies by the World Economic Forum or the Exponential Roadmap indicate that digital solutions can reduce global emissions by 15% in sectors such as energy, industry, agriculture or transportation, and up to 35% thanks to their ability to transform people’s habits until 2030.
And this is crucial to achieve the level of ambition to reduce global emissions established in the Paris Agreement, since it is necessary to fight for the maximum degree of efficiency in processes, and digitalization allows this.
To achieve progress, the sector’s great challenge is to decouple data growth from energy consumption, and thus contribute to Europe’s green transition with responsible digitalization.
Keeping energy consumption stable, despite the increase in the digitalization of society and network data traffic, is one of Telefónica’s great challenges. To this end, it works to improve its energy efficiency thanks to the application of technological innovations and projects that are allowing the company to reduce its consumption and manage, at the same time, the significant increase in data traffic registered in recent years.
Telefónica managed to reduce, one year in advance, its energy consumption per traffic unit by 90% since 2015, and therefore, it raises its ambition and redefines its objective of improving its energy efficiency ratio by 95% in 2030, while moving steadily towards being a 100% renewable company in said year in all markets.
Since 2015 alone, Telefónica has managed to reduce its energy consumption by 8%, despite the fact that the traffic managed by its networks has multiplied by more than 9 times.
Climate Action Plan
Telefónica has a Climate Action Plan in which it seeks to increase the company’s resilience, includes actions to transform its operation and incorporates climate change, both in the commercial and financial strategy, and in the processes related to its supply chain.
Among the set of decarbonization levers that Telefónica has put in place and with which it has managed to reduce its emissions by 52% since 2015, the company has a Renewable Energy Plan that contemplates all types of solutions from long-term PPAs (Power Purchase Agreements); distributed generation; purchase of renewable energy with guarantees of origin, or even photovoltaic self-generation in isolated base stations, technical buildings and offices.
The Energy Efficiency Plan provides an important competitive advantage and, so far, has managed to decouple business growth from energy consumption through more than 200 projects such as the transformation of the network through the shutdown of legacy networks such as 2G and 3G, the compaction of equipment, and the closure of the copper network for fiber optics, 85% more efficient in customer access.
A 2020 company study showed that 5G technology is up to 90% more efficient than 4G in terms of energy consumption per unit of traffic. In 2023, it was concluded, after several comparative exercises, that energy efficiency in virtualized environments is up to 27% more efficient compared to legacy environments.
Likewise, technological innovations have been incorporated in electrical and air conditioning infrastructures, the replacement of fluorescent lights with LED technology, the installation of sensors or smart meters, the inclusion of Power Saving Features (PSFs) systems that optimize consumption during low traffic times, and allow a reduction of up to 30% in these strips without compromising quality and also with the use of AI that allows determining predictions of future traffic behavior and activating the shutdown of cells.
Net zero emissions by 2040
Telefónica’s global objective is to achieve net zero emissions by 2040, including the value chain, ten years ahead of international agreements. To this end, it is committed to reducing emissions by 90% and neutralizing residual emissions through the purchase of carbon credits for CO₂ absorption, preferably through nature-based solutions.
In 2022, Telefónica was the first telco to obtain validation of the Science Based Targets initiative (SBTi), according to the new Net-Zero Standard of its net zero environmental objectives, in the short, medium and long term. The company thus confirmed that its decarbonization path is aligned with science.