T.F. Guerin (2010) ""The Expanding Role of Telecommunications in Enabling Customers to Achieve their Carbon Commitments”. Presentation to the 2nd Annual Energy Management and Environmental Sustainability Conference, Amsterdam

Delivered via web and audio conference, April 2010.

"The Expanding Role of Telecommunications in Enabling Customers to Achieve their Carbon Commitments”

Dr Turlough F Guerin

Group Manager Environment,Telstra Corporation Limited

Melbourne, Australia

Summary: Telstra has shown the possibility for its business to deliver emissions reductions across the economy. We are now using our own products and services to help our customers reduce their own emissions. And we are using these solutions ourselves and quantifying the environmental benefits.

BackgroundTelstra’s original energy efficiency programs began in the 1970’s with early research into renewable energy technologies, leading to Telstra being one of the largest solar energy generator in Australia with over 10,000 solar powered sites. Over the past 10 years, Telstra started reporting externally its environmental performance. In 2007, Telstra cast a vision for how we could help reduce greenhouse gas emissions across the economy1 through the “Towards a High Bandwidth Low Carbon Future” report. Improvements in how Telstra approached environmental and sustainability reporting, along with continually introducing environmental initiatives, has led to a 10 percentage point increase in 2009 on the Dow Jones Sustainability Index (DJSI) and maintained Telstra’s Climate Leader status on their Australia/New Zealand Climate Leaders Index by the Carbon Disclosure Project2 for the past 3 years.

In late 2009, Telstra announced a carbon reduction target. Since that time and up to the current time in 2010, Telstra has undertaken the development of a whole-of-company energy allocation model3 to assist us achieve this target. With a strong commitment to reducing our carbon footprint, Telstra is now well positioned to enable its customers to reduce their own.

PurposeThe challenge for Telstra is to minimise energy consumption and Telstra’s exposure to rising electricity prices, while delivering the vital services our customers need. In short, we need to reduce our environmental footprint while growing our business.

In this presentation, I will share with you what we have done to deliver on this vision to enable our customers to reduce their greenhouse gas emissions. There are three areas where Telstra is improving the management of its energy use and at the same time minimising the environmental impacts on our customers.

1 Towards High Bandwidth Low Carbon Future (2007) http://www.telstra.com.au/abouttelstra/csr/case_studies/society.cfm 2 K. Cockbill & T.F. Guerin (2010) The Business Case for Green Product Development in the Information Communications & Technology (ICT) Sector: A Corporate Environment Perspective from Telstra. Presentation to “Innovate 2010” Sydney, Australia 18-19 February.3 N. Scheltus & T.F. Guerin (2010) “Carbon emissions and the customer – transparency in corporate responsibility”, Presentation to RMIT Masters in Business Administration.

T.F. Guerin (2010) ""The Expanding Role of Telecommunications in Enabling Customers to Achieve their Carbon Commitments”. Presentation to the 2nd Annual Energy Management and Environmental Sustainability Conference, Amsterdam

Delivered via web and audio conference, April 2010.

We are doing this by:

Enabling our customers to reduce their greenhouse gas emissions; Measuring our own carbon footprint onto our largest customers; and Quantifying the time, cost and carbon savings from product/solution deployment.

Enabling our customers to reduce their greenhouse gas emissionsFirstly, we are working with customers to reduce their greenhouse gas emissions. We know that high speed broadband will enable the deployment of low carbon solutions across the economy such as video conferencing, remote working, and applications of these innovations through industry verticals such as e-Health, e-Education4 and growth in sales of these solutions is increasing. For example, for every tonne of greenhouse gas the telco and ICT sector generate, our industry sector is enabling the wider economy to reduce its greenhouse gas emissions by a factor of five or more.

The industry, and Telstra, has made a commitment that we can deliver these benefits, and there is an expectation that we will deliver on this promise. Well, I can proudly say that in Telstra, we are delivering. The example I’ll share is in reducing transport emissions. Much of transport’s emissions come from vehicle fleets. Within Telstra, we are enabling the efficient deployment of field work forces using Trimble Geo Manager, a solution we offer our enterprise customers5, particularly those in the transport sector with large fleets and field service staff6. Let me explain. In Telstra, we have a total vehicle fleet of 14,000 and a field workforce of about 6,000. These are the staff that connect your landline or conduct repairs when there has been an outage. Trimble GeoManager relies on field staff being connected via wireless broadband. It finds the shortest distance between field jobs so work can be scheduled in the most time-effective and fuel-efficient way. It uses GPS and GIS technology with the additional feature that it sends a regular positioning signal to a satellite. It allows work schedulers to match the closest field staff, that have the needed skills, to the next nearest job. In Telstra, Trimble GeoManager, has reduced travel kilometres between field jobs, by 6.5 percent year on year since 2006/077.

When running a large field work force and vehicle fleet like ours, this equates to millions of litres of fuel saved each year. That’s a significant positive impact on green house gas emissions reduction. But the greatest business value in implementing Trimble has been the recovery of lost time from the field workforce. Telstra has seen an increase of more than 10 percent productivity in our own field work force since installing Trimble.

This is transformational change: Increased productivity and reduced carbon footprint. Imagine that impact multiplied across a national broadband network.

4 Telstra’s Sustainability White Paper “Using Sustainability to Drive Your Sustainability Strategy” (2009) (http://www.telstraenterprise.com/researchinsights/Pages/Sustainability.aspx) 5 http://www.telstraenterprise.com/productsservices/mobility/remoteandmobileassetsmanagement/Pages/TrimbleGeoManager.aspx 6 Telstra has sold approximately 2000 units over the past 2.5 years to Enterprise & Government customers.7 This is based on the 26% reduction of km/task that our national Regional Service Delivery vehicles has reported during the period financial year 2005/6 (44.5) to 2008/9 (37.4).

T.F. Guerin (2010) ""The Expanding Role of Telecommunications in Enabling Customers to Achieve their Carbon Commitments”. Presentation to the 2nd Annual Energy Management and Environmental Sustainability Conference, Amsterdam

Delivered via web and audio conference, April 2010.

Measuring our own carbon footprint onto our largest customers

Secondly, we are measuring our own carbon footprint onto some of our largest customers. For those of you who may be wondering if the current uncertainty about carbon regulation is a reason to put your supply chain impacts of your products and services to the side, let me share with you the actions taken by one of our largest customers, which shows just how seriously some customers are concerned about costs of carbon in their business.

In 2008, Telstra was approached by an enterprise customer asking us to measure our carbon footprint onto their operations8. Telstra undertook a life cycle assessment (LCA) for this customer to measure the environmental footprint of provision of our products and services into their operations9. Telstra calculated the energy use and greenhouse gas (carbon) emissions resulting from provision of its products and services to that customer. The study determined the impact for both Telstra and the customer, allowing both organisations to better understand and manage the energy and emissions impacts of the telecommunications products and services provided to the customer10.

Here are the results: 20 percent of the energy and greenhouse gas emissions impact was attributable to Telstra and 80 percent attributable to the customer11. The impact of the customer-premises equipment (CPE), which was predominantly routers, was significant and higher compared with all other impacts from our footprint such as fixed line and mobile calls. In fact, the emissions from the CPE represented eight percent of the customer’s total carbon footprint.

This collaboration between Telstra and a major customer has provided a focus for both organisations to reduce the carbon emissions impact from equipment needed to be deployed by our customers to use Telstra’s services. This has included seeking alternative solutions to replace or upgrade legacy routers to models and configurations that are more energy efficient. It has enabled both Telstra and the customer to look at energy use and greenhouse gas emissions management in a new light. For Telstra, we have a better understanding of the contributions of our individual products and services to our own greenhouse gas emissions footprint. For the customer, they can see how telecommunications solutions directly impact their power consumption. Undertaking a carbon footprint onto our customers is also consistent with our philosophy of working transparently with our stakeholders and disclosing our environmental liabilities12.

8 This request became a catalyst for Telstra to better understand the carbon impact of its products and services, building on the company-level carbon footprint (from emissions sources eg electricity, fuel & waste to landfill) and business unit level carbon footprint already conducted.9 ‘Telecommunications and the Environment: But what about the Customer?’ by T.F. Guerin. Presentation to the CommsDay Congress, 13-14 October 2009, Melbourne, Australia.10 Life Cycle Assessment (LCA) methodology was used in the study and it was limited to operational energy consumption due to the complexity of products and services used by the customer. Embodied energy or other material environmental impacts were not considered. Allocation rules were developed to apportion Telstra’s network energy use to specific Telstra products and services. Although a partial LCA was completed, ISO Guidelines were used as guidance for this study (AS/NZS ISO 14040:2006(E), AS/NZS ISO 14044:2006).11 The total carbon emissions impact for both Telstra and the customer was 22,237 tonnes CO2e or the equivalent to the greenhouse gas emissions from approximately 1,600 average Australian households (http://www.environment.gov.au/settlements/gwci). 12 Refer to Telstra’s submission to the Carbon Disclosure Project (CDP) at www.cdproject.net. Telstra has participated in this initiative since its inception in 2003 and for the past 4 years we have been represented on the Climate Leaders Index demonstrating our commitment to reducing our greenhouse gas emissions and resilience to impacts of extreme weather events.

T.F. Guerin (2010) ""The Expanding Role of Telecommunications in Enabling Customers to Achieve their Carbon Commitments”. Presentation to the 2nd Annual Energy Management and Environmental Sustainability Conference, Amsterdam

Delivered via web and audio conference, April 2010.

Quantifying the time, cost and carbon savings from product/solution deploymentFinally, ICT products, such as video conferencing and remote working, provide additional value to their functional and technical capabilities through reduced impact on the environment. Realising this value for the customer, through the development of products and services, is both a challenge and opportunity facing the ICT sector. Telstra has embraced this challenge and opportunity by measuring the environmental impacts and benefits of selected products and services, and underpinning these efforts by continuing to improve commitment to its own environmental performance.

In April 2009, Telstra and WWF jointly launched a whitepaper on ‘Using ICT to drive your Sustainability Strategy’13 that incorporated sophisticated Return on Investment (ROI) tools. The four calculators enabled customers to understand the potential cost, productivity and emissions savings from individual product use. Although only an estimation, the transparency and breakdown of the components presented a credible tool that is valued by customers and further tools are under development.

Follow up to this work has been in calculating the carbon emissions, productivity and cost savings achieved, from our products and solutions, doing this in real-time, realising enhanced value for the customer. This approach was piloted internally at Telstra in 2009 by measuring the travel savings from video conferencing deployment including avoided carbon emissions. At the beginning of each video conference, a software tool captured the number of attendees substituting physical travel. The tool then used their geographic locations, the latest emissions conversion factors, and real time data for flight and vehicle costs, to accurately measure the travel savings14. This example demonstrates not just the direct environmental benefits of the product, but also the link to measurable cost savings and productivity benefits. Quantification of environmental benefits across selected business offerings, such as remote working, online billing, and video conferencing, integrates with productivity and costs savings. And this results in additional business value.

ConclusionIn closing, good environmental management is important for our business but it goes beyond us - it is also important for our customer’s business. Telstra must meet its customer’s needs for coverage, speed, bandwidth, and service, but customers are also a priority in our approach to managing the environment: we are enabling customers to achieve their own carbon reduction commitments.

13 Refer to http://www.telstraenterprise.com/researchinsights/Pages/Sustainability.aspx for a copy.14 The three month trial used 8 video conference units to calculate over $62,000, 1,420 hours and over 100 tonnes of CO2e avoided from 305 individuals substituting travel cited from K. Cockbill & T.F. Guerin (2010) The Business Case for Green Product Development in the Information Communications & Technology (ICT) Sector: A Corporate Environment Perspective from Telstra. Presentation to “Innovate 2010” Sydney, Australia 18-19 February.