Month: September 2023

Originally published in Enbridge’s 2022 Sustainability Report

In September 2022, Enbridge and the newly created Athabasca Indigenous Investments (Aii) announced a landmark equity partnership. Aii represents a diverse group of 23 Treaty 6 and Treaty 8 First Nations and Métis communities in northern Alberta. Under the agreement, Aii assumes an 11.57% ownership stake in seven pipelines in the region, which collectively transport about 45% of Alberta oil sands production.

For the Indigenous groups that came together to form Aii, investing in the region’s energy infrastructure is a way of investing in the future prosperity of their Nations and communities. “Our partner logo theme—Seven Pipelines, Seven Generations—speaks to the long-term value potential of these assets, which will help enhance quality of life in our communities for many years to come,” said Justin Bourque, Aii President. Because the assets are underpinned by long-life resources and long-term contracts, they’re expected to provide highly predictable cash flows for many years to come as they continue to drive North American and global energy security.

For Enbridge, the partnership is an opportunity for meaningful and sustained collaboration with Indigenous communities—both on environmental stewardship and on the ownership and operation of critical energy infrastructure. “This partnership is an important expression of the commitments we’ve made through our Indigenous Reconciliation Action Plan,” says Colin Gruending, Executive Vice President and President, Liquids Pipelines. “We’re working to extend our longstanding track record of engagement with Indigenous communities, including through financial partnerships like this one—and also through other modes of economic inclusion, such as procurement, training and recruitment.”

In making the largest ever Indigenous energy investment in North America, Aii seeks to achieve a wide array of benefits for the First Nations and Métis communities involved. With its 5% ownership in the Aii partnership, for example, Fort McKay Métis Nation will receive roughly $500,000 in annual revenue, which president Ron Quintal plans to direct to education, infrastructure and housing.

Meanwhile, Enbridge will continue to recycle capital from existing businesses to fund new growth opportunities, including a growing slate of investments in renewable and low-carbon energies—projects that will yield even more opportunities for Indigenous partnership in the decades to come.

It’s going to allow us to improve our quality of life. It’s very significant that this investment has been made collectively by 23 Indigenous communities that are impacted by the development in the Athabasca region. Under the creators, we’re all one. We’re all his children, and this is what the elders prophesized: that we must work together, and we must care for one another.

Chief Greg Desjarlais of Frog Lake First Nation

Learn more: Landmark collaboration in northern Alberta Athabasca equity partnership fact sheet

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The telecommunications business has been revolutionary in its ability to connect individuals worldwide. However, this phenomenal growth has left the sector with a significant portion of the world’s emissions. With increasing data demand, telecommunications companies must prioritize decreasing greenhouse gas emissions throughout their value chain.

Scope 3 emissions from activities across suppliers, product lifecycles, and customer usage comprise the overwhelming majority of emissions for telecommunications companies. While progress has been made on scope 1 and 2 emissions, scope 3 emissions remain a blind spot that demands urgent action. Addressing scope 3 emissions is vital for telecommunications companies to meet climate goals and lead the transition to a sustainable digital future.

According to the World Resources Institute, the global telecommunications industry emitted 1.7 billion tons of CO2 equivalent in 2019, representing approximately 2% of total global emissions. Telecommunications companies have an outsized opportunity to drive change and reduce emissions given their scale and influence across global supply chains and billions of customers worldwide.

Now is the time for telecommunications companies to step up with courageous leadership, collective action across the ecosystem, transparency, and a laser focus on reducing scope 3 emissions.

Understanding Scope 3 Emissions in Telecommunications

Scope 3 emissions encompass the vast majority of emissions across the telecommunications value chain. Key sources include:

Supply chain 
Manufacturing, transport, and disposal of network equipment makes up the largest share, such as 60% of Verizon’s total scope 3

Product usage 
Energy consumption of infrastructure, data centers, and devices

Customers 
Emissions from using products and services represent over 20% for leading telecommunications companies

While methodologies vary, standards like the Greenhouse Gas (GHG) Protocol enable consistent and transparent scope 3 accounting. Robust data collection and industry alignment will enhance accuracy over time. The urgency of climate action necessitates that telecommunications companies act now to address primary scope 3 hotspots like supply chain and product usage.

Success requires transparency, cooperation, and immediate commitment to tackle scope 3 emission sources.

Challenges in Calculating Scope 3 Emissions in the Telecommunications Industry

Calculating scope 3 emissions poses major challenges for telecommunications companies, including:

Data limitations: Telecommunications companies lack visibility into supplier and vendor emissions. Greater transparency and coordination are essential.Complex value chains: Varied reporting mechanisms across the vast partner ecosystem create aggregation difficulties.Methodology alignment: Companies must determine boundaries and allocate shared infrastructure emissions while adhering to accounting standards.Rapid technology changes: Emerging solutions like 5G and the Internet of Things (IoT) require continuous emissions monitoring.

Robust data collection, industry collaboration, and transparency will be vital to overcome these obstacles. Standardized methodologies guided by established protocols will enhance accuracy over time.

Above all, open cooperation across telecommunications value chains is crucial to drive scope 3 progress. From suppliers to customers, aligning stakeholders to prioritize emissions reductions will accelerate the sustainability shift, despite near-term uncertainty. Telecommunications companies have the scale and influence to lead the way.

Strategies for Mitigating Scope 3 Emissions

Telecommunications companies can mitigate scope 3 emissions through:

Supplier collaboration 
Joint research and development (R&D), audits, and incentive programs enable partners to reduce their supply chain footprint. AT&T uses a sustainability scorecard to motivate action.

Renewable energy 
Shifting infrastructure and operations to clean power significantly decreases emissions. BT Group and Telefónica aim for 100% renewable electricity use.

Eco-design 
Prioritizing recyclable and energy-efficient materials and manufacturing reduces lifecycle impacts. Vodafone’s Eco Rating drives more sustainable devices.

Customer engagement 
Awareness campaigns, energy-saving tips, and green tariffs incentivize sustainable usage. Orange’s set-top box eco-rating nudges consumers.

Policy and regulation 
Scope 3 requirements in markets like the EU also drive telecommunications companies to address value chain emissions through mandated reporting and carbon pricing.

Additionally, telecommunications companies can further engage customers through expanded recycling and take-back programs to optimize device lifecycles. Services like leasing instead of selling phones can incentivize longevity. Features that track energy consumption also enable users to reduce their footprint.

There are still challenges, but collective effort across the telecommunications ecosystem can drive progress on scope 3 emissions. Engagement and incentives can accelerate emissions reductions across value chains from suppliers to customers. With their global scale, telecommunications companies must lead the way.

Calculating and Reporting

To enable accurate and consistent scope 3 accounting, telecommunications companies should:

Adopt recognized standards like the GHG Protocol Corporate Value Chain Standard, which provides comprehensive guidance.Improve supplier data collection through surveys and supplier engagement platforms.Increase transparency by regularly disclosing scope 3 inventories and strategies in sustainability reports.Obtain third-party verification for scope 3 emissions data to ensure reliability.Collaborate with industry peers and partners to align methodologies and reporting.Continuously refine calculations by incorporating improved data sources and emission factors.Supplement inventory accounting with scenario modeling to project future emissions.

While uncertainties remain, standardized and transparent scope 3 reporting is vital to understand emissions baselines, track progress over time, and hold companies accountable. Investors and customers are increasingly demanding credible disclosure.

Telecommunications companies should lead the drive towards robust scope 3 accounting and reporting across sectors. Their commitment can catalyze broader adoption of carbon transparency.

Using SAP Sustainability Data Exchange, telecommunications companies can collaborate with partners, enhance awareness and engagement of stakeholders, gain insights, mitigate risks, and seize opportunities to reduce and offset emissions.

Ultimately, courageous leadership and collective diligence across telecommunications company value chains are imperative to drive progress. Telecommunications companies have the influence to spearhead robust and transparent scope 3 practices across all sectors. But, success hinges on prioritizing partnerships, integrity, and environmental stewardship above all. The moment for action has come.

For more information on how SAP helps companies record, report, and act on their sustainability goals, visit www.sap.com/sustainability.