Rethinking ESG for the mobile sector

By Louise Easterbrook, CFO, GSMA

Sustainability is one of the defining issues of our generation. Around the world, consumers, employees and regulators increasingly expect companies to act responsibly and add value to society. Previously considered a ‘nice to have’, ESG (environmental, social, and governance) performance has become a business imperative. According to EY research, since the global pandemic 90% of investors attach greater importance to a company’s ESG performance in their investment strategy and decision-making.

Mobile operators recognise that by placing greater focus on their ESG performance, they can build stronger relationships with stakeholders and create sustainable financial value.

In recent years, mobile operators have recognised and embraced the importance of ESG performance and reporting. Many sustainability and integrated reports now provide information on greenhouse gas emissions, energy consumption, digital inclusion, and waste management. However, the true challenge is that the ESG reporting and data is not consistent across the sector, limiting our ability to fully demonstrate the mobile industry’s value to society. These inconsistencies in data and reporting, and a general lack of alignment on exactly how to apply ESG as a framework, have been the principal cause of recent bad press around ESG, increasing claims of ‘ESG washing’.

The GSMA’s ‘ESG Metrics for Mobile’ provides a framework designed to address some of these challenges.

To bring industry convergence and much-needed clarity to ESG, the GSMA and EY have worked with GSMA members, external subject matter experts, and investors, to develop the first harmonised ESG reporting framework – ESG Metrics for Mobile. These 10 keys industry-specific KPIs provide a north star for the mobile sector to navigate, measure, and communicate our ESG efforts.

By using ESG Metrics for Mobile, mobile operators can provide valuable and consistent data points, and track their ESG progress over time, maximising industry impact for shareholders, employees, customers, and society as a whole.

“What ESG metrics mean for companies and investors is that the level of disclosure and discourse will inevitably resemble the same type of reporting and reporting standards that we have today around corporate financial statements and earnings reports.” Robert Jenkins, Global Head of Research, Refinitiv (GSMA ESG Metrics for Mobile webinar)

Mobile operators are uniquely placed to accelerate progress on a range of ESG issues.

As digital connectivity becomes ever more embedded in our lives, mobile solutions are transforming access to healthcare, education and financial services. The mobile industry is also leading the way towards more energy-efficient networks, and enabling carbon reductions across society that are 10 times what the industry itself produces.

As the mobile industry embraces ESG reporting, addressing and disclosing impacts, risks and opportunities, mobile operators will also be well positioned to enable ESG solutions for their customers.

“Transparency is mission critical, and as sophistication grows..every mobile operator, every public corporation, every private company is leaning into these matters and want to know about the granularity and the investors also want to know more and more about the granularity.” Todd Bridges, Global Head of Sustainable Investing and ESG Research, ESG Book (formerly Arabesque) (GSMA ESG Metrics for Mobile webinar)

Mobile operators and their stakeholders can take three critical steps to ensure that the GSMA’s ESG Metrics for Mobile framework accelerates performance:

  1. Align company leadership behind the 10 key ESG KPIs
  2. Raise awareness of the framework with the investment community and other external stakeholders
  3. Adopt the metrics in future reporting, measure performance, and deliver improvements

“I think that over the next 5 to 10 years the ESG footprint of an investment will be almost as primary to its description as the asset class that it’s in. The notion of ESG-themed funds will eventually just fade into the background as all funds are going to be assessed on their ESG characteristics and the supporting analytics that we’re starting to develop are going to enable investors to more easily choose targeted and thematic ESG investment products.” Robert Jenkins, Global Head of Research, Refinitiv (GSMA ESG Metrics for Mobile webinar)

By aligning around the ESG Metrics for Mobile, the mobile industry can accelerate the pace and impact of its ESG work and reporting, by ensuring data-driven decision making on ESG. This framework also enables us to demonstrate our positive impact on society, and perhaps most importantly, empowers us to build trust with our consumers and the communities we serve.

To find out more visit: gsma.com/betterfuture/esg-metrics-for-mobile