Tech’s carbon emission and the path to net zero: the experience of Colt

Unlike lawyers working in industries which are easily identifiable as having large carbon emission, such as fossil fuel or automotive, Computers & Law readers may not have considered the carbon footprint of their organisation. This article seeks to encapsulate the experience of a telecommunications company in its journey to carbon neutrality, with particular focus on its supply chain.

The ICT sector has traditionally been seen as low-emission. This changed between ten and five years ago, when we all became aware of the increasing carbon footprint of the ever larger data centres, which now host the content and the applications that constitute so much of our daily lives. Since then, the awareness about the whole ICT sector’s emissions has grown, and some estimates put the total emissions at 4% of the global total. 

As our appetite for data and connectivity seems not to have limits, it would be easy to become pessimists about our ability to change things. I am quite pleased to be able to offer one piece of good news, discovered while researching this article: the sector’s emissions are not growing as much as we thought, and in certain respects they have actually decreased. For instance our use of smartphones has eclipsed that of old-style desktop computers, and smartphones are much more power-efficient. 

It is however undeniable that the tech sector has a quite large carbon footprint, and we should all make efforts to reduce it.

Colt’s experience

Colt is a B2B network operator in Europe and Asia, providing high-bandwidth connectivity services through its optic fibre network, the largest in Europe, with almost 30,000 buildings connected to it. Colt is present in 30 countries and employs around 5,000 people.

Colt’s starting point in its journey to carbon emission reduction and Net Zero was a wider focus on sustainability. The leadership took the deliberate decision to reduce our environmental impact globally and made sustainability a key strategic driver. Sustainability matters at all levels of the organisation, and carbon emission reduction targets are part of a much wider environmental sustainability strategy that encompasses many other aspects.

The next sections will summarise our experience with our Net Zero targets, as well as some other sustainability initiatives.

The real issue: Scope 3 and Colt’s targets

Greenhouse gas emissions are categorised into three groups or ‘Scopes’ by the most widely used international accounting tool, the Greenhouse Gas (GHG) Protocol. Examples are shown in Table 1.

Table 1 – Examples of emissions in Scope 1, 2, and 3 

Scope 1 emissions are direct emissions from company-owned and controlled resources. In other words, emissions released into the atmosphere as a direct result of a set of activities, at a firm level. Example : 

• Stationary combustion (e.g., fuels, heating sources). All fuels that produce greenhouse gas (GHG) emissions must be included in scope 1. 
• Mobile combustion relates to all vehicles controlled by an organisation, burning fuel (e.g. car, vans, …). The use of electric vehicles means that some of the organization fleets could fall into Scope 2 emissions. 

Scope 2 emissions are indirect emissions from the generation of purchased electricity, from a utility provider. In other words, all greenhouse gas (GHG) emissions released in the atmosphere, from the consumption of purchased electricity, steam, heat and cooling. 

Scope 3 emissions are all indirect emissions, not included in Scope 2, that occur in the value chain of the reporting company, including both upstream and downstream emissions. In other words, emissions that are linked to the company’s operations. 

It is therefore clear that Scope 3 emissions are usually the greatest share of the carbon footprint of any organisation, for instance covering emissions associated with business travel, procurement, waste and water.

It is for this reason that some organisations do not disclose their scope 3 emissions, or do not consider them in their targets. Colt decided instead that doing so would not really address the problem and opted for a comprehensive set of targets.

Colt worked together with the Science Based Targets initiative (SBTi, a collaboration between the CDP (Carbon Disclosure Project), the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF)) to set a science-based climate target. Colt’s near-term Science Based Targets (SBTs) ensure that its emissions reduction activity will occur across all departments and our value chain, with these targets: 

• Scope 1 and 2: Colt is aligning with the Paris Agreement 1.5 degree trajectory. Colt will cut emissions by -47% (compared to a 2019 baseline). 
• Scope 3: Colt is aligning with the Paris Agreement well-below 2 degrees trajectory. Colt will cut emissions by -28% (compared to a 2019 baseline). 
• Colt is also committed to procuring renewable energy power and will achieve 75% renewable electricity for all sites globally by 2023. 

The role of green sustainable procurement 

Given the importance of Scope 3 emissions, it is crucial to have a holistic approach to carbon neutrality, that needs to engage the whole supply chain.

Extracts from Colt’s Sustainable Procurement Policy
The selection of the winning tender will be made based on a balanced assessment of the solutions and commercial propositions put forward. If a reasonable opportunity to improve the sustainability performance of the winning solution is identified during the tender evaluation process, appropriate measures should be agreed with the supplier and built into the contract / statement of work (SOW) so that they can be subsequently monitored for achievement.
Amongst the supplier selection and contract award criteria, certain aspects such as carbon emission reduction schemes are assessed. Providing the supplier’s commercial and technical proposal is competitive, the supplier which demonstrates the most suitable and effective carbon emission reduction scheme is then awarded the contract.
Contract Review and Monitoring
Sustainability performance and development must be a standing agenda item at any supplier performance review meetings (for example QBR – Quarterly Business Review).
All QBRs shall be a trigger to discuss a supplier’s position on their sustainability approach, United Nations Sustainable Development Goals (UN SDGs), Carbon Disclosure Project (CDP) Scoring and discuss potential improvement areas.

What follows briefly outlines Colt’s activities related to Sustainable Procurement. We are all on a learning journey on how our organisations can reduce their impact on the environment and our carbon emissions, so this is only one possible approach. It is offered to the reader to stimulate further thoughts and encourage other organisations to develop their own policies and approaches.

In 2021, Colt issued a sustainable procurement policy. The policy states that Colt prefers to work with suppliers who share the same values as Colt. In order to do so, Colt undertook a number of actions: 

• For existing and new suppliers, Colt issued a questionnaire (see Table 3) to understand where they are on their journey. 
• For suppliers with high scope 3 emissions, but with little progress on sustainability, Colt has started direct discussions and has requested them to register on Ecovadis, a respected third-party provider of business sustainability ratings.
• Colt will engage in discussions with any suppliers that has registered with Ecovadis and has a rating below a certain threshold. We also anticipate that that threshold will be raised in the future, to create an “upwards ratchet”.
• Colt conducts quarterly business reviews with critical suppliers, where sustainability is always part of the agenda.
• For new suppliers, sustainability can make up to 20% of the weighing of the different decision criteria.

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