Engaging Telstra’s Supply Chain
Telstra is Australia’s leading telecommunications and technology company. In 2021, Telstra set a science-based target to reduce its scope 1, 2 and 3 emissions by 50% by 2030, from a FY19 baseline.
In 2023, Telstra broadened the performance measures for its Executive Variable Remuneration Plan (EVP) performance scorecard to include scope 1, 2 and 3 absolute emissions reduction targets for FY24, making it a component of senior executive short-term incentives under its remuneration structure. This recognises the critical nature of this target to Telstra’s success and the role of senior leaders in achieving it.
As with many companies in the telecoms industry, scope 3 represents Telstra’s largest emissions source, making up 67% of its total footprint. Of total scope 3 emissions, approximately 73% comes from Telstra’s supply chain. Therefore, working with suppliers to reduce their emissions is key to achieving Telstra’s 2030 target.
In partnership with CDP, Telstra delivered training, tools, and support on environmental disclosures to over 400 suppliers in 2023 – an increase from approximately 200 suppliers in 2022.
Most of Telstra’s emissions are concentrated across its top-100 suppliers. This covers approximately 78% of Telstra’s total annual supplier spend. Meaningful decarbonisation targets and plans from these suppliers will contribute greatly towards Telstra achieving its scope 3 target.
At the end of 2022, Telstra rolled out a new standard emissions reduction clause and guidance for purchases. This new clause requires suppliers to understand, report, verify, reduce and track their climate change impacts in support of Telstra’s 2030 target. As of December 2023, 43 suppliers had signed up to these new clauses which contractually committed them to disclosing and reducing their absolute emissions.
Having a standardised process for disclosure and a community of supply chain disclosers allows climate action to be more impactful. In 2023, Telstra joined CO2 AI and CDP to support the development of the CO2 AI Product Ecosystem. This platform enables companies to collaborate and share product-level emissions data. Telstra piloted this platform with two suppliers, Vantiva and Accenture, who are going further to define, measure and communicate the carbon footprint associated with the products they provide Telstra. These insights enabled Telstra to improve the sustainability of products, such as the Telstra Smart Modem 3, which won an Australian Financial Review Sustainability Leaders Innovation Award, in the category of Telecommunications, Media and Technology in 2023. More broadly Telstra’s scope 3 emissions have already decreased by 28% since FY19.