The telecommunications sector is experiencing both a delicate and exciting moment. In addition to activityfacing paradigm shifts in its core technologies—such as artificial intelligence—where artificial intelligence is just one of them—it must also consider SDG’s, the 2030 Agenda, the long-term sustainability of its business model, and other ESG criteria.

At the same time, it must address talent attraction and retention, remote working and automation, changes in consumer habits, and the growing implementation of the Internet of Things, to randomly cite a few factors from a much longer list. Challenges and opportunities abound.

What are ESG criteria?

We talk about ESG (Environmental, Social and Governance) criteria when referring to a set of standards that all companies, across all sectors, observe, monitor, and implement to establish policies that promote environmental sustainability, robust governance, and positive social impact. It can be said that ESG criteria are the 21st-century evolution of Corporate Social Responsibility (CSR) expanding it to integrate measurable standards.

These criteria encompass waste management policies, carbon footprint, use and recycling of materials, energy efficiency, and impact on biodiversity, for example. They also consider working conditions, employment integration and work-life balance policies, integration of at-risk groups, and interaction with communities. Corporate ethics and culture, anti-corruption efforts, internal structure and functioning, and compliance with regulations are also part of ESG criteria.

ESG criteria in the telecommunications market

Although the telecommunications sector, like any other, consistently working to meet and exceed high ESG standards.”, given the nature of its activity and the challenges it faces, it is particularly focused on those related to sustainability and energy consumption, as well as its social impact.

Sustainability and energy: key concerns for telecoms

The presence of increasingly large, energy-demanding data centres, along with 5G technology infrastructure, makes telecommunications one of the top consumers of electricity worldwide—accounting for around 2% to 3% of the planet’s total.

Electricity consumption is accompanied by waste generation and the use of non-recyclable components in many devices, as well as the immense energy demand required for computing with artificial intelligence models. Energy efficiency, the use of recycled materials, and waste management are part of the sector’s strategic concerns regarding ESG criteria, and it is also working to implement circular economy practices.

In addition to the energy issue, the social impact resulting from the lack of access to connectivity technology, Internet access, or fast and reliable data transmission—especially in developing countries and some particularly strained areas—represents future challenges for the telecommunications market.

Opportunities for the sector, based on projective ESG criteria

Greater and better environmental responsibility, a market committed to sustainability, and leaders committed to creating a positive, ethical impact on both direct and indirect communities. they engage with, even at a third or fourth level. This future scenario is what telecommunications companies can build if they use ESG criteria as a “roadmap” for a promising present and future.

In addition to achieving better economic results by adhering to these criteria—something already demonstrated by some prestigious academic studies—adopting a robust ESG strategy can open the door for telecommunications companies to take a leadership role in society’s transformation. This is something they have always done historically, but it could take on a new dimension under this perspective.