Telstra is a leading telecommunications and technology company and is the largest wireless carrier in Australia. Telstra began to disclose through CDP a decade ago and, since then, the company’s environmental strategy has evolved into one of the most ambitious in the sector. The company has committed to Business Ambition for 1.5°C and had its targets verified by the Science-Based Targets Initiative (SBTi).
Telstra first earned a place on the CDP A List in 2016 and has since consistently scored between an A and A-. In 2020, Telstra and CDP launched a three-year partnership – with the company becoming the first CDP Supply Chain member in Australia.
As Chief Procurement Officer, Sasha Samac tells us, CDP Supply Chain membership is an indicator of corporate climate leadership and has been a crucial vehicle for achieving climate goals.
The majority of Telstra’s carbon emissions come from its supply chain, explained Samac. “As a major technology company, we rely on our large, complex supply chain. Scope 3 emissions account for around 70% of our total emissions which is where our CDP data and supply chain membership comes into play.” In fact, CDP research shows that, on average, supply chain emissions are 11.4 times higher than operational emissions – demonstrating the urgent need for action in this area.
“In June 2020, we hosted a forum with CDP and some of our top 113 suppliers to see how we could work together to reduce our environmental impact and toward a low carbon future. Since then, 106 of them have disclosed through CDP,” said Samac. Telstra uses the information disclosed by suppliers to gain a comprehensive understanding of emissions released and inform further emissions reductions strategies.
“Throughout our suppliers, we have seen an increased sense of responsibility and urgency across the board – irrespective of size. Momentum is building rapidly,” Samac explained. “Decarbonizing our supply chain has also had a domino effect where companies who operate downstream in the supply chain are now more than likely to look for carbon neutral alternatives.”
Telstra’s Supplier Code of Conduct sets out the minimum standards of behaviour that Telstra expects its suppliers to meet, including standards for sustainability. “We want to support our suppliers to improve their CDP scores. We are very ambitious and committed in our targets and we see CDP disclosure as a vehicle to get there.”
Smart modems and circular economy
The insights gained from CDP disclosure have allowed Telstra to identify areas of their operations that need the most attention and where the most effective levers of change lie in reducing their emissions.
Through disclosure, Telstra discovered that production of their modems contributes a high proportion of their emissions. As a result, the company have been focusing on improving the sustainability of the production, packaging and lifecycle of their modems.
“We looked at how to make the packaging smaller and fit together in a more efficient way: packaging the modems in such a way to maximize the amount that could fit onto one shipping palette. This has reduced shipping costs as well as emissions,” explained Product Owner, Bernhard Severin.
“We have also reduced the number of items a customer receives with their modem, moved to recycled packaging and reduced the number of wires and plastic cable ties in the packaging. This was done through incremental changes – gradually removing unnecessary items with each update we made to the modem. With each new generation of modem, we ensure we make new, sustainable changes,” said Severin. “It’s a continuous cycle of improvement.”
Telstra has also applied circular economy principles to their modem lifecycles, helping to shift the customer mindset towards more sustainable consumption. “We are already helping to drive a change of customer mindset. Our customers will always need modems or devices but at the end of the device’s life, we are encouraging their return so they can be recycled or refurbished. The need for devices won’t ever go away which is why we need to manage this demand sustainably,” explained Severin.
For Telstra, the importance of CDP supply chain membership and CDP disclosure generally goes beyond focusing on reducing emissions of the company’s own operations.
“CDP disclosure brings a standardization and creates a critical mass across industries,” emphasized Senior Supplier Governance Manager, Simon Antony, “It shows that our intent is clear – to have a positive impact on climate. Some of our suppliers are receiving requests to disclose from their other customers too which has created a critical mass for climate disclosure and, therefore, climate action.”
"Having a standardized process for disclosure and a community of supply chain disclosers allows our climate action to be more impactful,” Antony added.
For Telstra, environmental action and transparency, aided by disclosure and CDP Supply Chain membership, has helped the company to stand out as an industry leader and shift customer mindsets. “We have already seen the changes we have made to achieve our eco-packaging being used as vendor examples in their presentations,” Antony emphasized. “Beyond sustainability targets, our ambition is that Telstra remains a leader when it comes to climate action and encourages others to do so as well.”