The mobile sector’s race to circularity

Today, only 9% of material inputs in the global economy are cycled back. However, many sectors are taking encouraging steps to move towards a circular economy. New ways of innovating, operating and partnering will be needed to create a true shift to circular economy. And digital players, including telecommunications operators, have a key role to play. By Allison Kirkby, President and CEO, Telia Company | July 12, 2021

In 2019, resource consumption was on a level that required the capacity of 1.75 earths, which means we consume approximately 75% more than our planet is able to provide on an annual basis.

This “take-make-waste” approach has severe impacts on ecosystems. It depletes, rather than responsibly manages, the natural capital needed to support future generations.

The circular economy, however, is based on another logic. By making sure that natural resources are used in a smarter way, it is based on preventing-reducing-reusing-recycling material inputs, rather than just taking more from Planet Earth. This much-needed shift will require the fastest transition in economic history with businesses playing a key role.

The two-folded role of telcos

The telecommunications industry is both part of the challenge and the solution. As more customers become connected across the globe, more and more ICT-devices and infrastructure equipment are entering the market. In a business-as-usual scenario, global e-waste is estimated to increase by 140% between 2020 and 2050. In 2019, the global average collection and recycling rate stood at only 17%.  But there is another way: by applying circular business models and approaches the industry can save resources and protect the ecosystems at the same time.

The telco industry has started its transition. Many players are already committed to reducing waste flows. Telia Company, for example, committed in 2019 to achieve zero CO₂ in its value chain and zero waste in its own operations by 2030.

Industry joint action is also on the rise. Just this month, five of Europe’s leading mobile operators joined forces to launch a new pan-industry Eco Rating labelling scheme that will help consumers identify and compare the most sustainable mobile phones and encourage suppliers to reduce their environmental footprint.

At the same time, telcos are uniquely positioned in the ecosystem to act as an enabler for other industries to deploy circular solutions that reduce resource consumption, waste, and emissions through connectivity and digitalization.

Digitalization can enable smarter use of any resource – energy, water, raw materials and others – by using the power of the Internet of Things and data driven solutions. The impact that telcos have on other industries globally is estimated to be up to 10-times higher compared to its own greenhouse gas emissions.

Opportunity to unlock value worth billions

In a recent report, Telia Company and Accenture estimate that telcos can, by 2030, unlock significant value globally that amounts to $45-80 billion annually by:

  • Embedding circularity in their own operations: $20-30 billion through actions like resale of infrastructure and waste mitigation in infrastructure installation
  • Offering circular products and services to customers: $15-20 billion through, for example, selling devices as a service and devices that are refurbished
  • Enabling a circular ecosystem: $10-30 billion through selling real time monitoring or asset tracking capabilities to utility providers and the construction industry and similar activities

What will it take?

Moving towards a circular economy is about new ways of looking at what we already have and the resources we use. It is about releasing the untapped value that the linear system currently prevents us from touching.

However, scalable change will require extensive collaboration within and across industries, as well as deep engagement with consumers, business customers, academia, NGOs, investors, and suppliers, to co-create a circular future.

Policymakers need to incentivize the shift through circular policies and investments needed that match the urgency of the situation. National and regional circularity plans, complementing and supporting the ones countries already have in place for climate action are needed to create a joint vision, identify areas for innovation and investments, and align stakeholders around a target state.

The future is circular – the question is not if, but how and how fast we will get there.