Before Singtel moved forward its net-zero emissions target to 2045 from 2050, its sustainability team conducted a global sweep of other telecommunications companies’ green ambitions.
It saw the Western standouts – Vodafone gunning for 2040; Verizon and AT&T by 2035 – and the relative dearth of similar targets in Asia.
Last year, Singapore’s largest telecommunications company decided on 2045 to achieve net-zero, the most ambitious target so far among its Asian peers. Since then, it has upgraded its interim emissions and renewable energy procurement goals, and became the first Southeast Asian telco to make the A-List of climate disclosure group CDP.
Group people and sustainability chief Aileen Tan said 2045 was part aspiration, part business imperative.
Aileen Tan is group chief people and sustainability officer at Singtel. Image: Singtel.
“My customers include Singapore’s public service. Some of my global customers have already accelerated their net-zero target to 2045, 2040. If I want to continue to do business with them, I can’t stay at 2050, right?” Tan said. The Singapore government has set its own sights on net-zero 2045, five years ahead of the national target.
“We take a very pragmatic approach – with what makes good business sense,” Tan said, in an interview with Eco-Business.
Last month, Singtel released its mid-term growth plan, which focused heavily on artificial intelligence (AI). It is also slated to release its annual sustainability report on 1 July.
Its last report had detailed a drop of over 11 percent, year-on-year in operational emissions, along with a larger 56 per cent drop in “Scope 3” value chain emissions, which the telco attributed to changes in methodology when accounting for emissions.
Globally, the internet and communications sector contributes anywhere between 1.5 to 4 per cent of carbon emissions – putting it in the range of commercial flying (2.5 per cent) and shipping (3 per cent). The sector’s carbon footprint could further intensify, especially in emerging markets, as more people seek mobile and data connectivity.
Dollars and specs
After weathering Covid-19 and shedding some loss-making units, Singtel has said it wants to accelerate business growth – possibly into low double digit percentages – in the next few years. Its mid-term strategy, released last month, extensively features the use of artificial intelligence, both in its core telecommunications business and infocomm segment under Singapore subsidiary NCS.
The group’s data centre arm, Nxera, is also building three “AI-ready” facilities in Singapore, Indonesia and Thailand. The subsidiary aims to reach 200 megawatts in the next three years, over three times the current capacity of data centres.
Both AI and data centres are traditional energy guzzlers in the tech space, because of the amounts of computer processing and cooling involved. So Singtel’s accelerated net-zero plan will “of course” affect future development plans, Tan said.
The challenge, she said, is to keep emissions in check while pursuing the growth opportunities. Shedding legacy equipment is a key part of the game plan. Another is the deployment of what is essentially an internal carbon tax on its business units.
A concept first floated last year, Singtel is set to impose a S$50 (US$37)-per-tonne carbon fee on its departments’ new developments that exceed 100 tonnes of lifetime CO2 output, which is likely to cover new network and infocomm technology equipment. The emissions threshold has been broadened from a previously announced 1,000-tonne limit used for shadow carbon pricing trials.
While shadow carbon pricing – for long-term planning purposes – are increasingly common in boardrooms, actually applying such an internal tax within companies remains rare. High-profile proponents of the strategy include tech giant Microsoft and insurer Swiss Re – the latter charging US$100 a tonne, rising to US$200 by 2030. Singtel leadership has said it is likely the first in Singapore to pursue an internal carbon fee.
Singtel’s approach will likely take a carrot-and-stick approach, with the charge waived for projects that adopt greener alternatives. Tan said more details are expected in its upcoming sustainability report.
Part of the motivation for the internal carbon fee stems from avoiding asset stranding risk – should governments impose more stringent climate regulations – by preemptively lightening their carbon footprint first.
“Carbon taxes will only get more expensive, not cheaper,” Tan said. Singapore itself has set S$50, Singtel’s current asking carbon price, as the lowest national charge come 2030. Australia – the group’s other key market through ownership of local telco heavyweight Optus – currently does not have a national carbon price.
Apart from pricing emissions, Tan said Singtel will keep an eye out for the best-in-class green technologies for its future growth. The group incorporates sustainability metrics into procurement decisions, and is in a tie-up with equipment provider Ericsson to field Singapore’s most energy efficient radio cell for its 5G data network.
Green power sans greenwashing
In March, Singtel said it was working to grow its use of renewables-backed energy to 50 per cent by 2030 in Singapore and Australia, up from just over 7 per cent in its last annual audit.
It has been making progress since. In Singapore, Singtel signed a 10-year power purchase agreement (PPA) with local utility Sembcorp, that comes with the opportunity to procure green power. The aim is to secure 30,000 megawatt-hours annually.
In Australia, about another 600,000 megawatt-hours is being secured for until 2029, Tan said. Optus has committed to have all its electricity requirements backed by renewables by the end of 2025.
The FY2024 figures for renewables-backed energy use will likely be higher than the year before, in the 20-odd per cent range, she added.
Solar panels on one of Singtel’s buildings in Singapore. The telco major says it is maximising its solar energy use, while making its operations more efficient, to reach its sustainability targets. Image: Singtel.
But procuring green power in the region comes with its own challenges. The group has maxed out solar panel installations at its facilities in dense urban Singapore, but power output is less than one percent of annual needs. Output in Australia is even lower. Market and grid limitations means long-term renewables offtake agreements can also be hard to come by.
“I don’t think anyone can totally claim to use 100 per cent power from on-site renewables. Nobody can do it. Especially in Singapore – totally impossible,” Tan said.
What this means, is that Singtel’s clean power contracts will always involve an element of certificate-trading not paired with the physical delivery of renewable electricity. Tan did not provide the exact breakdowns.
To maximise environmental impact, the group has said it will prioritise on-site renewables generation and long-term power contracts, before dipping into the renewable energy certificates (RECs) market.
Singtel is also keeping its RECs sourcing local, a recognised best-practice in the trade – despite sky-high prices in both Australia and Singapore compared to markets in Southeast Asia.
“We don’t know about the quality of [regional] RECs…we only adopt gold standards, global standards. We will not touch any RECs which we have no idea how it is pumped into the grid, and cannot be assured of its quality,” Tan said.
“We’re very careful. The last thing I want is to go close to greenwashing,” she said, though adding that the credentials of regional RECs could improve in the future when Singapore starts the physical import of green electricity from its neighbours.
The Asian way
Singtel also wants in on Asia Pacific’s growth opportunities. Apart from Optus, the group has minority stakes in India’s Airtel, Thailand’s AIS, Philippines’ Globe and Indonesia’s Telkomsel.
Airtel, AIS and Globe have in recent years set net-zero 2050 targets; Telkomsel has not.
Their decarbonisation is important to Singtel, which wants to slash its Scope 3 value chain emissions by 40 per cent in the next six years. Out of 15 categories of indirect emissions; its regional investments alone contribute over a third of the pie.
Tan said Singtel’s role is akin to a steward, and has been sharing best practices in climate governance with its partners while discussing expectations on their sustainability trajectory.
She also recognises that regional markets present a “very different operating regime” than in the West, where regulations drive corporate decarbonisation. Western firms face more climate activism and sometimes decisions are made based on such public pressure, Tan noted.
“This part of the world is not about that,” she said.
Still, global sentiments towards sustainability have shifted backwards amid geopolitical headwinds. Consultancy Ernst & Young recently reported that nearly a quarter of global chief executives are pushing sustainability down their to-do list. In Singapore, the figure was over 50 per cent.
Tan said she had been championing a long-term view that sustainability planning – and staff training – has to continue amid downturns.
“It is a question of using our creativity – how do we think differently, and deliver on the same outcomes and objectives with other methods that are more cost effective,” she said.
Tan insisted she is not the loudest proponent of a long-term view within the leadership team, saying that group chief executive Yuen Kuan Moon and Singapore chief Ng Tian Chong would have answered similarly on sustainability issues.
“It is a culture, a belief,” Tan said.
Correction note: The headline and paragraph 8 have been amended to better reflect Singtel’s carbon accounting and pricing initiatives.
