The Swedish telecommunications supplier Ericsson has published the status of its sustainability strategy. So far, the company has been moving close to its formulated milestones, but from 2030 the path to the targeted climate neutrality by 2040 is heavily dependent on the players in the entire value chain.
Ericsson, meanwhile, also shares good news. The company assumes that global CO₂ emissions could be reduced by up to 15 percent by 2030 through ICT-based technologies and the digitization of industrial processes. With this statement, the company advertises 5G and thus also its own product portfolio for this mobile communications standard.
Internally and externally to net zero
In the company’s reports, different baselines are given for different business areas, against which the percentage reduction in emissions is measured. Sometimes the year 2016 is given as the year of comparison, sometimes it is the years 2017 to 2021. Germany also uses such years of comparison to make reductions more tangible, but sometimes also to make them appear larger than they actually are – for example the year 1990 due to new data due to reunification.
In the 2022 sustainability report, Ericsson estimates that the total greenhouse gas emissions from its value chain amounted to approximately 28 million tons of carbon dioxide per year. According to the statement, 91 percent of this footprint is mainly caused downstream by the energy consumption of the network equipment sold to customers. The supply chains accounted for 9 percent. The company differentiates between the emissions that can be traced back to its own internal activities.
Within the company close to the goals
According to that current status report (PDF), Ericsson has already reduced emissions from its own operations by 71 percent compared to 2016. In 2016, CO₂ emissions are said to have been 560 thousand tons of CO₂. According to this, the output should currently be around 162 thousand tons. For the year 2022, Ericsson had indicated 225,000 tons and thus a reduction of around 60 percent – and thus already surpassed individual annual targets. Since, according to the current status report, a reduction of 71 percent is to be achieved by 2025, this interim goal is already considered to have been met.
The company’s internal reduction targets primarily include the areas of mobility and energy. Ericsson has introduced a consumption limit for business trips. Only 50 percent of the pre-pandemic values from 2019 can be reached there.
CO₂ has been saved internally at Ericsson in recent years, in particular by turning to renewable energies and restricting business trips. From this year, the use of renewable energies for our own factories should already be 100 percent.
By the next stage in 2030, the company intends to only use fossil-free transport vehicles. Replacing backup generators and heaters is also on the company’s to-do list, as is establishing a circular economy. It wants to improve product take-back and the sale of refurbished devices.
In terms of travel emissions, not much should change after the 2025 milestone. Ericsson wants to stick to capping these emissions by 50 percent compared to the reference year 2019 and offset the resulting emissions by investing in permanent CO₂ removal projects.
Progress and targets for supply chain and customers
For the supply chains and the product portfolio used, a reduction of 50 percent is aimed for by 2030 compared to the base year 2016.
By 2022, Ericsson said it was able to commit 225 of the approximately 350 direct suppliers, who are responsible for 90 percent of supplier emissions, to the targets of the Paris climate agreement. All 350 companies should be on board by 2025. They too are then obliged to reduce their emissions by 50 percent by 2030 and must report on actual savings. But if these suppliers don’t do their homework, Ericsson would have to follow up in this area. The company at least points out that it wants to help suppliers with the transformation.
In addition, Ericsson will present its own offers to take further steps towards climate neutrality within the industry. With this, the company also wants to point out possible economies of scale that would be possible through the ICT sector as a whole. In the Sustainability Report of 2022 states: While the ICT sector is only responsible for 1.4 percent of the global carbon footprint, it has the potential to enable a 15 percent reduction in emissions by 2030 across industries through connectivity solutions such as intelligent building management systems.
For example, with a switch to 5G, extensive cabling in factories can be dispensed with – this saves waste and can also increase productivity. As an example, Ericsson cites its own factory in Lewisville, Texas. Here, the digitization of many fundamental areas has reduced energy consumption by 24 percent compared to similar buildings. At the same time, productivity has increased. According to Ericcson, 5G is the most energy-efficient technology to date while increasing capacities.
In addition, to date, the company has increased the efficiency of its massive MIMO radios by 50 percent and the efficiency of its multi-band radios by up to 20 percent compared to the previous generation of radios. Further increases in efficiency should pave the way to net zero across the value chains.
Much remains unclear after 2030
While reduction paths up to 2030 and the necessary steps are still mentioned in some detail, Ericsson can hardly list any concrete directions for his path to net zero in 2040. In the years 2030 to 2040, the company wants to develop even more efficient products, save more energy and see good cooperation in the ICT sector. However, it is also counting on suppliers and customers also making greater use of renewable energies – a factor that Ericsson can only influence indirectly.
Ultimately, decarbonization across the entire value chain also provides for the compensation of remaining emissions.
However, the goal for 2040 is clear for the company: By then, Ericsson wants to save at least 90 percent of the emissions caused previously across all business areas, based on the reference year 2020. Further status updates in the coming years will provide information on whether this goal is also achieved is really doable.
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