Telstra is dialling into a new phase of its climate strategy, evolving from offsetting carbon to directly reducing emissions. Here’s the lowdown on their latest steps:

New Goals, Same Planet 🌏

Since 2020, Telstra has made significant strides in reducing emissions—30% reduction in scope 1+2 and 28% in scope 3. Now, with climate change pressing harder than ever, they’re setting the bar even higher.

What’s Changing?

Starting July, Telstra will:

• Increase their scope 1+2 emissions reduction target from 50% to 70% by 2030 (from a FY19 baseline). The 50% reduction goal for scope 3 remains.

• Move away from using carbon credits to offset the emissions from their operations. Instead, they’ll reinvest those funds into projects that directly reduce their carbon footprint.

Why It Matters

Telstra’s Chief Sustainability Officer, Justine Rowe, explains their why:

As one of Australia’s largest electricity users, we believe we should prioritise activity to reduce our direct emissions from our network, which will in turn help contribute to Australia’s climate goals. We are aware of the increased public and industry interest in how corporates are using carbon credits in recent years, and that consumers are increasingly expecting organisations to take more direct and transparent climate action. That is why we believe redirecting our investments from purchasing carbon credits to taking more direct climate action here in Australia, will help consumers better understand how we are having more direct impact on climate change.

While carbon credits do play a role in sustainability, prioritising direct emission reductions through investments in renewable energy is often more impactful and beneficial in the long run. Carbon credits can help offset emissions by investing in projects that reduce carbon dioxide elsewhere, but they do not address the root cause of emissions within a company’s operations. By contrast, investing in renewable energy projects, such as solar or wind farms, directly reduces the carbon footprint of a company’s activities.

Additionally, renewable energy investments can lead to significant long-term cost savings. As the technology for renewable energy becomes more efficient and widespread, the cost of generating power from these sources will continue to decrease. This not only reduces operational costs for businesses but also provides a more stable and predictable energy pricing structure compared to fossil fuels, which are subject to market fluctuations. Companies that lead in adopting renewable energy can also benefit from enhanced corporate reputation, regulatory advantages, and increased appeal to environmentally conscious consumers and investors. By focusing on reducing emissions at the source, companies can achieve more sustainable and economically viable outcomes.

Tom Penny, Telstra's Head of Environment, shared in his interview with Capital Brief, that as a major electricity user that Telstra is, there’s a lot of costs that can be saved by becoming more energy efficient and shifting to 100% renewable energy.

Think about data centres and the servers and racks that are used within those. Think about the cooling equipment. Air conditioning units in our exchanges that have our telecommunications equipment or in the data centres are the big areas of opportunity.

Per their FY23 Sustainability Report, 97% of their FY23 Scope 1+2 GHG emissions were from electricity consumption from Telstra’s network, data centres, offices, retail and other buildings, of which a significant 91% is attributable to network sites and data centres.

Source: Telstra FY23 Sustainability Report, page 63

In their FY23 report, Telstra notes they have doubled their investment from $21.1m in FY22 to $49m in FY23 for energy reduction projects, largely focused on energy efficiency and decommissioning. These resulted in annualised savings of 23,485 tCO2e and 30,177MWh electricity from energy efficiency projects, and 79,406 tCO2e and 100,566MWh through decommissioning network equipment.

Source: Telstra FY23 Sustainability Report, page 63

Today’s announcement is all about how we can take direct action. It’s about how we can actually invest everything that we can to quickly reduce our own impact as part of our value chain emissions.” - Tom Penny, Telstra's Head of Environment

Telstra’s updated climate strategy isn’t just about meeting targets—it’s about pioneering a more responsible and impactful approach to business sustainability. As they continue to lead by example, it’s a reminder that the path to net zero is paved with direct, meaningful action.

For more details on Telstra’s evolving climate commitments, read here for their full announcement.

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