Ambitious ESG targets for digital infrastructure are achievable with the right tools

07 May 2024 | Transaction support

Sylvain Loizeau | Richard Morgan | Sarah Halpin

Article


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Digital infrastructure’s greatest contribution to the transition towards a sustainable global economy lies in its critical role as the conduit for other sectors’ sustainability improvements. Nonetheless, it also needs to look at its own direct impacts, risks and opportunities, especially as regulatory requirements and social pressures assert themselves. The most important environmental, social and governance (ESG) risks and challenges include energy intensity and carbon footprint, data privacy and security, impact on local communities, labour practices, governance and reporting.

Sustainability initiatives can serve as a powerful driver of innovation, business transformation and growth. They have the potential to shape evolving markets, driving positive change across the sector.

This is the first article in a series of five, which will collectively highlight some of the most significant sustainability opportunities and some specific innovative solutions that can give digital infrastructure players a competitive edge. This article offers an outline of the material that will be covered in greater detail in subsequent articles, each of which will explore one specific asset class in more detail. All of these articles are based on research from Analysys Mason’s dedicated sustainability research team, and draw on our recent client project work.

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There are around 5.2 million mobile towers worldwide, so there is ample scope for a reduction in their potential negative impacts. New technologies and strategies can reduce energy consumption, minimise disruption to local communities and wildlife and cut the risk of vandalism and physical deterioration. Analysys Mason recommends that every towerco should create a coherent ESG framework to manage these impacts. They should also consider implementing some of the most ambitious, transformational and innovative ESG practices, which are increasingly becoming standard features of modern networks. The second article in this series will explore how mobile operators can:

  • generate green power
  • share towers and radio access networks
  • use low-carbon materials and recycle
  • deploy IoT on mobile infrastructure.

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The growing array of data centres that underpin the digital economy are collectively responsible for 1–1.5% of global energy consumption. The International Energy Agency estimates that data-centre energy usage is rising rapidly, from 460TWh in 2022 to over 1000TWh in 2026, and that this rate of growth is widely expected to continue to 2030 and beyond. The processing of data in a typical facility generates an enormous amount of heat, which needs to be removed for the data centre to maintain safe and efficient operations. The cooling process is notoriously energy-intensive, and can consume significant volumes of fresh water. In addition, data centres can take up valuable land that cannot then be used for other purposes, such as food production. The third article in this series will explore how data-centre operators can:

  • improve cooling efficiency
  • harness waste energy
  • explore sustainable power sources.

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Fibre broadband infrastructure is energy-efficient once deployed, but the deployment process can have a considerable impact on the local environment, workers and local communities. The relatively high cost of deployment also contributes to a persistent digital divide, meaning that the socioeconomic benefits of fibre connectivity are not evenly distributed throughout society. ESG policies that address these issues and include thorough monitoring and reporting will become more important as financiers increase their scrutiny of ESG performance. The fourth article in this series will explore how fibrecos can:

  • foster a sustainable supply chain
  • adopt low-impact deployment methods
  • promote safe working practices
  • drive digital inclusion efforts.

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The space sector is growing strongly but attracts significant criticism due to the carbon cost and pollution of satellite launches and the increasing problem of space debris. There are also concerns over privacy and surveillance, as well as governance challenges related to transparency and ethics. The fifth article in this series will explore how the space and satellite sector can:

  • connect the unconnected and manage crises
  • optimise teleports
  • limit debris in space
  • drive innovation and re-use
  • strengthen cyber security.

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The telecoms industry has always thrived on innovation and finding creative solutions to technical questions. The increasing pressure to find sustainable paths for growth offers new opportunities for that innovation and creativity.

Analysys Mason is the leader in telecoms-related ESG analysis and consulting. We operate at the nexus of digital infrastructure and sustainability. To speak to one of our experts, get in touch.

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Authors

Sylvain Loizeau

Principal, expert in telecoms strategy and regulation

Richard Morgan

Partner, expert in transaction support

Sarah Halpin

Analyst, expert in space and satellite