April 14, 2024

5G & Ericsson’s Commitment to Sustainability: How Latest Mobile Communication Tech is Driving Transition to Low-Carbon Future

The Green Financing Framework

Ericsson, a leading telecommunications provider, has unveiled its new green financing framework, which allows the company to issue Green Securities. Ericsson will use these securities to finance or refinance assets that support Ericsson’s transition to a low-carbon and sustainable society.

The framework focuses on financing digitalization solutions, such as upgrading legacy network technology and investing in technologies that reduce energy consumption by at least 35%. This framework aligns with current best practices, and a third party will review it after issuance.

It also clearly defines areas not eligible for Green Securities funding, such as activities that could have negative social or environmental impacts. Ericsson’s commitment to sustainability is evident in its decision to invest in technologies and practices that reduce its carbon footprint and support a healthy planet.

Carl Mellander, Ericsson’s CFO, stated that the company’s new sustainability framework is part of their overall plan for sustainable finance and will support capital expenditures and R&D investments in enhanced energy performance for their 4G, 5G, and future 6G solutions.

Furthermore, he emphasized that extending its leadership in energy efficiency is a top priority for Ericsson and its operator customers. Heather Johnson, the VP of Sustainability and Corporate Responsibility, added that this framework is a way to further integrate sustainability into the company’s practices, particularly regarding climate action and financial activities.

In addition, these investments will help drive the development and deployment of energy-efficient technology that supports their Net Zero ambition and enables the digital and green transition across industries and society.

5G and Emissions Reduction

Ericsson’s company research shows that digitalization solutions preceding 5G could reduce global emissions by 15% by 2030. According to the report, implementing 5G and artificial intelligence (AI) can accelerate the transition toward reduced emissions.

Estimates suggest that implementing 5G in the industry alone could lead to a 5% decrease in emissions in the European Union by 2030. Ericsson believes that information and communication technologies (ICT) are crucial in reducing emissions, despite only accounting for 1.4% of annual global emissions.

To help organizations across various industries meet their environmental targets, the company plans to design enterprise services and networks that minimize energy usage as network traffic increases. Additionally, Ericsson intends to engage in mergers and acquisitions to position itself to support the transition toward a net-zero emissions economy.

The company sees investing in sustainability as offering a valuable competitive advantage and believes its leadership in mobile communication technology will be vital to leveraging the full decarbonization potential of ICT solutions in other sectors.

Ericsson’s Efforts to Reduce Environmental Impact

According to the report, most of its emissions, 93%, come from its products and services; They include electricity and power needed to operate its networks. The remaining emissions result from the extraction and processing of resources, manufacturing, transportation of network components and hardware, and business travel.

To become a net-zero emissions company by 2040, Ericsson has announced plans to work with high-emitting suppliers to set emissions reduction targets to limit global temperature rise to 1.5°C. These targets will help to reduce the company’s scope three value chain emissions, which refer to indirect emissions from the activities of Ericsson’s suppliers.

The company will mainly focus on suppliers of carbon hot spots such as aluminum, diecasting, and electronic components.

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