Annual
report 2020

Management of the impact on the environment

Our commitment KPI Performance

To implement business goals with respect for the rules of ecology and in harmony with the environment: optimization of energy use in the following areas: real estate, infrastructure and network, data centres, supervision over Orange Polska’s impact on the environment; increase in number of recycled, re-used and refurbished devices

 

Energy consumption Electricity consumption (GWh)

2017: 581
2018: 564
2019: 552
2020: 541

CO2 emission Total CO₂ emissions ( ‘000 tones)

2017: 468
2018: 451
2019: 426
2020: 405

Number of recycled and refurbished devices Collected and recycled phones

2017: 42,869
2018: 16,034
2019: 36,671
2020: 33,609

Refurbished and relaunched phones

2017: 8,138
2018: 5,600
2019: 8,561
2020: 11,515

Refurbished and relaunched devices

2017: 465,994
2018: 491,125
2019: 410,774
2020: 503,045

Delivery on our commitments in 2020

Since 2020, the Orange Group has been operating in line with its new strategic plan, Engage 2025, which in addition to business targets defines also social and environmental objectives. The Group’s commitment to curbing global warming is reflected in tangible sustainable development goals and assumes the participation of our stakeholders in transforming its business.

Towards climate neutrality

Our overarching target is to achieve climate neutrality (i.e. become net zero carbon) by 2040. That’s ten years before both the deadline for EU climate targets and the recommendations by the GSMA (the global alliance of telecom operators).

Meeting this target will involve avoiding and reducing greenhouse gas emissions and, in the final step, neutralisation of the unavoidable or irreducible emissions (in particular by planting sustainable, protected and biodiverse forests), so that ultimately Orange Polska’s climate balance will be zero. Neutrality will not only cover our own emissions, direct (Scope 1) and indirect (Scope 2), but also our value-chain emissions. The first crucial milestone is 2025, when we intend to achieve a significant reduction in our CO2 emissions from the baseline year of 2015. Climate responsibility is already becoming one of the pillars of our business strategy.

These goals are fully in accordance with the Orange Group’s global strategy.

Our approach, #OrangeGoesGreen, is integrated into our daily operations. We optimise electricity consumption and contract renewable energy directly with its producers, from facilities developed specifically for our needs in Poland. Furthermore, we constantly enhance our processes in order to consume energy more wisely and generate fewer CO2 emissions. We engage in dialogue with our customers, suppliers and partners in order to develop new solutions and to counter climate change.

In Orange Polska, we have the following ambitions by 2025:

  • Reducing CO2 emissions vs. 2015 by at least 65% (for Scope 1+22, according to the GHG Protocol, see GRI section below for definitions of Scopes 1, 2 and 3, and data methodology);
  • Increase the share of renewable energy in Orange Polska’s energy mix to at least 60% based on long-term Power Purchase Agreements (PPA) related to specific facilities, thus also stimulating green transformation of the Polish power industry.
  • Become the market leader in circular economy by using refurbished equipment in our networks and data centres, collecting old phones through repurchase/recycling, and offering refurbished handsets and user devices to our customers.
  • Become a partner to our customers in their green challenges thanks to our portfolio of commercial services.
  • Win a position among the green leaders of Polish business through distinctive consistency in our efforts and a reliable image as a green operator.

Environmental issues are a part of OrangenPolska’s CSR strategy. Clear, formally adopted climate targets will enable improved management in this area and the development of a comprehensive programme. The climate policy is supervised directly by the CEO, and the pursuit of objectives is subject to regular reviews by the Management Board and the Supervisory Board. The climate objectives will constitute an integral element of the Group’s new overall strategy to beadopted in 2021.

In 2020, as the first step of our climate impact management, we created the position of Climate Officer. The Officer’s role is to coordinate the development and implementation of our climate goals in close co-operation with the entire organisation. The Climate Officer reports directly to the Management Board Member in charge of Strategy and Corporate Affairs.

The Company has chosen the reduction in greenhouse gas emissions as well as energy consumption and its mix as the key indicators to measure the progress towards its climate goals. We have reported them as part of our non-financial reporting for over a decade. Furthermore, Orange Group is working globally to expand the CO2 emissions indicator to include Scope 3. The environmental indicators and the relevant methodology are described in detail in the GRI section, Environmental Data below.

In our risk management framework, separate environmental risks have been identified in the social risks domain. These risks are subject to a standard review once a year, the results of which are reported to the Management Board and Supervisory Board. In the climate risk area, Orange Group has defined short-term risks with respect to its annual strategic plans, mid-term risks related to its Engage 2025 strategy for 2020–2025, and long-term risks in the 2050 perspective. Currently, Orange Polska’s environmental risks are identified in the short-term perspective. One of climate risks has been considered a key risk, which means that it is a subject to an additional monitoring procedure and may be covered by the annual internal audit plan and the Audit Committee’s assessment.

The most important climate risk, which has been included among our TOP risks, is related to failure to achieve the Company’s environmental commitments. Its detailed description is included in the Risk Management section below. The analysis of this risk has enabled us to plan strategic actions aimed to minimise it and to implement the relevant mitigation measures, particularly the energy optimisation programme and the renewable energy purchase plan.

Major climate risks include also the issue of business continuity in case of exposure of Orange Polska’s technical infrastructure to damage caused by natural disasters (the frequency of which is growing due to climate change) and the risk related to inefficient electronic waste management not taking into account the requirements of the circular economy.

Mid-term risks will be defined in 2021 with reference to Orange Group’s Engage 2025 strategy, while long-term risks will be defined in the 2050 perspective. On the international level, Orange Group has carried out a climate risk assessment project aiming to determine the physical resistance of business entities under a scenario of global warming by more than 3°C. The project, initially conducted in France, has involved a review of potential effects of climate risks with respect to network elements (data centres, access nodes, cables, poles, antennas, etc.). This has led to the determination of their climate vulnerability thresholds with the focus on the most dangerous risks (heat waves, strong winds, intensive rainfall, lightning strikes, fires). Based on it, Orange Polska is now developing local climate scenarios, which will be used for the identification of mid-term and long-term risks.

Our climate policy and the heat map in this area are developed in conjunction with experts of international Orange Group and Carbone4. On the local level, Orange Polska collaborates with the AGH University of Science and Technology, Institute of Accountancy and Taxes, Bureau Veritas, social partners (UNEP GRID) and industry associations (Polish Chamber of Information Technology & Telecommunications and Polish Confederation Lewiatan) with respect to its environmental footprint.

Orange Polska responds to global challenges related to the natural environment and natural resources. We consider energy consumption with related greenhouse gas emissions to be the most important aspect of our environmental impact. As electricity consumption accounts for the vast majority of the Company’s greenhouse gas emissions, our primary responsibility lies in this area. Poland’s energy mix is based on coal, so the only reasonable way towards a sustainable reduction in our climate (carbon) footprint is gaining energy from new renewable sources, coupled by initiatives aiming to optimise consumption volume.

In 2020, we worked on the implementation of the Orange global strategy by setting our local environmental targets and incorporating them into Orange Polska’s business strategy, This ensures a more comprehensive approach to the Company’s environmental and climate impact, which is also reflected in our reporting of non-financial information (Directive 2014/95/EU), in line with the Supplement on reporting climate-related information (2019/C 209/01), as well as identifying climate-related opportunities and risks.

In 2020 we created the position of climate officer, who is to indicate and co-ordinate pro-climate initiatives within the Company. We also developed and launched the #OrangeGoesGreen approach, incorporated into our business activity, in order to accelerate our climate efforts.

Our priorities

Responsibility

Electricity consumption accounts for more than 90% of the greenhouse gas emissions reported by Orange Polska. Therefore, we have focused our environmental efforts on both saving energy and moving to renewable energy sources.

Greenhouse gas emission split CO2 emissions of Orange Polska in Scopes 1 and 2

All our energy-saving initiatives have been combined into the single Energy Optimisation Programme, covering networks, data centres, sales outlets and offices. Between 2015 and 2020, we completed almost 200 such initiatives, which involved replacement of older technical devices with modern energy-efficient ones, modernisation of cooling systems and introduction of energy-saving functionalities. Between 2015 and 2020 these solutions enabled us to generate total energy savings of 713 GWh, which corresponds to an overall reduction in carbon dioxide emissions of 530 thousand tonnes. Thanks to the Programme, our electricity consumption decreased by 10% between 2015 and 2020, despite our investments in new technologies and development of new services. Without it, our electricity consumption would have increased by 25% in that period.

Currently, the key challenge for Orange Polska is to gain energy from renewable sources. According to our forecasts, our total energy consumption will grow in subsequent years despite optimisation and efforts to improve the energy efficiency of our networks. This is due to our customers’ constantly growing data traffic.

Orange Polska’s approach is based on long-term contracting of green energy supply directly with producers (under Power Purchase Agreements – PPAs) from identifiable, renewable energy sources, especially those developed specifically for our needs. Thus, we support the development of new, renewable energy sources in Poland, increasing green power capacity and contributing to the transformation of the Polish power industry.

Value

Second life of devices

We want to support residential and business customers with our commercial services in their climate challenges and initiatives. The digital technology sector has an important role to play in climate actions owing to the character of the products and services it offers. These can help customers to estimate, understand and eliminate or reduce greenhouse gas emissions and other negative environmental impacts. GSMA estimates that mobile telecommunications enabled a reduction of 2.1 billion tonnes in CO2 emissions in 2018, which is ten times greater than the sector’s own global carbon footprint.*

Circular economy is also a major aspect of Orange commitment to environmental protection and carbon footprint reduction. It has a positive impact on the rest of our value chain: suppliers and customers. As for products (i.e. network elements, user devices, smartphones, etc.), our planned initiatives are related to eco-design, reuse/repurchase, refurbishment, repairs and recycling. The overarching goal is to deliver goods and services while considerably reducing the consumption and waste of resources.

We try to reduce the amount of materials we use and we ensure that they are reused. We encourage our customers to recycle old mobile devices: they can drop off their old mobile phones or accessories in all Orange stores. A buy-back programme for unwanted mobile phones is one of our key initiatives to extend their life cycle. Our partner company repairs any minor damage, so that the returned handsets can be put back on the market.

We co-operate with licensed organisations only. The collected devices are stored in special containers, and then handed over to a company which is responsible for their recycling or neutralisation. Such companies document the subsequent stages of the process: collection, transport and recovery or disposal. In line with the WEEE Act, the equipment which can no longer be used is considered waste and handed over to waste neutralisers holding the relevant waste management licence granted by the Chief Inspectorate for Environmental Protection.

In 2020, Orange initiated the global “Give your phone a second life” campaign. In addition, we launched the orange.pl/razemdlaplanety [Together for the Planet] portal, where you can find information on Orange Polska’s environmental initiatives and practical tips on how to use technology in a more eco-friendly way.

Multimedia devices, such as modems and set-top boxes, are leased to customers for the term of provision of telecommunication services. Upon expiration of the agreement, the devices collected from customers are refurbished; then, operating and looking ‘as new’, they can be reassigned to other customers for further use.

In 2020, over 500,000 modems, multimedia and CPE devices were refurbished and returned to the market, which was approximately 60% of the total number in circulation in Poland. About 39 tonnes of plastics and over 1.1 million power supplies, cabling or other accessories were saved as a result of refurbishment and reuse.

Our ‘Refurbishment of Multimedia Devices’ project won the first prize in the third edition of the Stena Circular Economy Award competition in the Entrepreneurs – Practice category. And our phone repurchase offer was recognised in 2020 by an expert panel in the Climate Leadership Programme for tangibly reducing the negative environmental impact of products.

Smart digital solutions may contribute to the improved management of limited natural resources. Innovative IoT solutions, particularly in the Smart City domain, optimise consumption of resources (e.g. electricity or water) and reduce emissions and pollution thanks to smart management and monitoring systems for municipal services (e.g. utilities supply, city lighting, parking places, city bikes or waste collection). Over 80 cities in Poland already use Smart City solutions provided by Orange. Our Company is the Polish leader in the IoT (Internet of Things) and M2M (Machine to Machine) communications. We provide more than 2 million M2M cards, which is about 40% of the Polish market (data for Q4 2020). We operate nationwide fixed and mobile networks, and, as the first operator in Poland, provide open and safe API environment for the Internet of Things. This environment is used in our platform Live Objects, which makes integrated management of municipal services user-friendly and manageable from a smartphone or computer.

* GSMA, The Enablement Effect.

Impact

We want to be a reliable and credible partner in climate and environmental initiatives. Therefore, we engage our employees and business partners in seeking new environmentally-friendly solutions.

We are the largest operator in Poland with the most extensive mobile network, covering over 99% of Poland’s population in the 4G technology, and superfast fibre network, reaching up to 5 million houses, flats and businesses. We provide network access to one third of Polish internet users. Owing to the scale of operations, our impact is of paramount importance.

We are aware that while pursuing our business and developing new technologies, we need to monitor their environmental impact on a current basis, so as to reduce the negative impact of our activities and maximise the positive impact of digital technologies. We have been monitoring and reporting energy and other resources consumption as well as carbon dioxide emissions related to our operations for years. We strive to inform our stakeholders about the Company’s activity in a reliable and comprehensive manner. Therefore, in addition to financial results, we have been publishing also data in the social and environmental areas for over a decade.

Digital technology creates the potential for more innovative and sustainable solutions promoting energy conservation and pro-environmental attitudes.

Through services that replace traditional communications or written documents, such as tele- and video-conferences, electronic document flow, e-services, e-invoices and comprehensive ICT systems for business, public administration and local communities, we support others in reducing greenhouse gas emissions.

80% of all Orange Polska’s customers use electronic invoices. We have also introduces an option to sign an agreement on a tablet in all our outlets. Thanks to e-services, Orange Polska with its customers save annually about 20,000 trees that would otherwise be used for paper production.

The world's urban population is expected to grow by a further 2.5 billion people within the next thirty years. It means that we need both more efficient and sustainable cities.

A remedy is new technologies, particularly the Internet of Things (IoT) solutions, as they help to reduce consumption of electricity, fuels and water or improve the quality of air.

In Poland, more than 80 cities and towns, both big and small, have already implemented IoT solutions provided by Orange.

Smart Water solutions from Orange are operational in over 30 municipalities in Poland. In particular, it is used in the right-bank districts of Szczecin, while in Krosno Odrzańskie it encompasses the entire water supply network (3372 main water meters). The system prevents water waste, generates savings and streamlines management. Smart Water automatically reads water meters on house service lines, and, via a telemetric module with a built-in SIM card, sends the current data to the water utility.

Moreover, current monitoring by Smart Water ensures effective failure identification, which reduces water waste by up to a dozen or so per cent and prevents costly repairs of streets and sidewalks. The system also reports fraud attempts, such as water meter removal or manipulation. Smart Water provides access to information on a 24-hour basis, while historical data enable analysis, future water consumption forecasts and planning of water supply network repairs and development. The system also makes life easier for residents, as they do not need to arrange visits by meter reading personnel and they are notified in case of increased water consumption.

Smart Lights ensures efficient and eco-friendly city lighting. Special LED fixtures with built-in GSM cards enable automatic control of illumination of streets, parks, residential districts and other open spaces according to pre-defined parameters. Consequently, lamps are turned only when it is dark and any pedestrian traffic is detected, and lighting intensity is adjusted to the season or the weather conditions. As a result, electricity consumption can be reduced by several dozen per cent compared to traditional lighting systems. In addition, LED fixtures are designed to minimise light pollution, which disrupts the natural circadian rhythm of people and animals. A total of eight cities, such as Bolesławiec, Lwówek Śląski and Lubomierz, have already appreciated the Smart Lights solution.

The fourth biking season with Smart Bike is over. So far, over 56,000 bikers from 21 cities have ridden almost 2.4 million kilometres, that is 60 times around the world. Had they covered that distance, 2.4 mln km, by car, about 288 tonnes of CO2 would have been emitted to the atmosphere. Smart Bike is a fourth generation public bike-sharing system. In particular, it means that you can leave your bike at any place within the designated zone. The operator tracks the location of each bike, used or free. The bike monitoring system is charged by a solar power supply, so it is possible to see what is happening with bikes all the time. Bikes are equipped with SIM cards and a system monitoring various parameters during ride. The collected data provide information how to plan the network and develop further active smart solutions, as well as how to design the cycle track grid and other cycling facilities. The Smart Bike solution not only facilitates city transport, but also reduces CO2 emissions and promotes healthy lifestyle.

Other Smart City solutions are Smart Energy and photovoltaics. Photovoltaic systems use the Internet of Things to communicate with the system that manages electricity flows. Thanks to proper monitoring and analytic tools it is possible to optimise the use of photovoltaic energy. The Smart Energy Controller developed by Orange experts in 2020 is the brain of the system. It monitors both the system and the equipment and circuits connected to it on a 24-hour basis, controlling dozens of power parameters in real time. In case of any irregularities, the system sends notifications or alerts. The built-in ‘power guard’ enables individual devices or circuits to be switched on and off remotely.

Analysis of data from various city systems gives municipal authorities the complete picture, enabling them to take the right actions. It is facilitated by the Live Objects platform. It is Orange’s in-house solution, that can be used by companies, cities and institutions. Live Objects integrates all city systems in a single place; then, they can be managed from virtually anywhere in the world as long as there is internet access. The operations of the platform are based on the analysis of huge amounts of data and M2M communications. The latter is possible thanks to special SIM cards (similar to those used in smartphones) installed in devices to make them automatically send information to the system. There are already over 2 million devices with such cards provided by Orange all over Poland, which is about 40% of the Polish M2M market. In the M2M technology, information is sent between devices via a mobile network without human involvement. The LTE-M network is used for these communications, as it can handle thousands of IoT devices per square kilometre. Importantly, this technology reaches also weak coverage sites, such as basements, and is energy-efficient, as devices can operate up to ten years on a single battery. The latter is achieved by ‘awakening’ devices only for brief moments when they need to send data.

We invest in modern technologies to increase the energy efficiency of our networks.

For example, we replace copper-based solutions with more energy-efficient fibre.

Orange Polska invests PLN 700–800 million annually in its fibre network. As a result, almost one third of Polish households are already within its reach. During the pandemic, our fibre network enabled data traffic higher by about 30% compared to older technologies.

Once at optimal usage rates, energy consumption in a fibre network is several times lower than in the case of copper wires, while transmission capacity per customer is higher.

Lower electricity consumption is a comparative advantage of fibre over copper-based solutions. Owing to the characteristics of optical lines, more customers can be connected to a single aggregate device without compromising on service quality. Moreover, as fibre develops, it becomes more effective. According to our analyses, energy consumption per FTTH customer is up to a dozen or so times lower than in networks based on copper technologies.

Fibre network is currently the most energy-efficient technology for the Internet access, and its efficiency increases as its capacity is filled. Fibre lines have virtually no physical limitations in terms of data transfer. Optical systems make it possible to achieve transmission range on an unparalleled scale and eliminate a considerable number of active network devices, which would otherwise consume energy.

Currently, we need four times less energy per customer to provide Orange fibre broadband then we did when this technology was introduced to the market in 2015. Thus, migration of our customers to a modern fibre network has a major impact on our green transformation and pursuit of climate neutrality by 2040. Owing to our customers increasingly choosing FTTH services, we are able to save 17 GWh of energy annually, which corresponds to 13,000 tonnes of CO2 less in the atmosphere.

We efficiently manage waste from dismantled copper lines. As much as three fourths of the elements of removed copper cables can be reused, e.g. to produce power cables or mobile phones. In terms of savings of raw materials, it is a valuable contribution to circular economy. Therefore, at Orange we ensure that the copper cables which are no longer needed are dismantled and recycled in a responsible manner.

As from 2021, Orange Polska intends to meet a portion of its energy needs from renewable sources.

Each year, Orange Group emits 1.5 million tonnes of CO2 globally. Orange Polska accounts for as much as one third of these emissions. This is a simple consequence of Poland’s energy mix which is based on coal. Therefore, the energy sources we use as a company are of key importance.

The first step in our response has been to conclude long-term contracts for electricity from two new wind farms built for Orange Polska by WPD in Greater Poland. They will become operational in mid-2021 and supply almost 50 GWh annually. This is about 9% of our annual energy needs. WPD could complete this project because Orange Polska guaranteed that it would purchase energy from it for many years. As a result, new renewable sources will be added to the market, improving Poland’s energy mix.

We will subsequently increase the use of renewable energy from facilities developed specifically for our needs, so as to increase their share to 60% of our annual energy consumption by 2025.

We have also decided to use the roofs and lands on our premises to produce green electricity for our own needs. We will follow the Solar-as-a-Service (SaaS) model. It means that our business partner will develop and maintain a photovoltaic (PV) system at its own expense, while we will lease an installation site and buy the solar energy produced. This benefits both parties and the environment. The first PV systems are scheduled for completion in the third quarter of 2021. They will supply a total of 900 kWp of energy, which accounts for almost 4% of the annual consumption by our two data centres.

Our Warsaw Data Hub, which is currently under construction, will also be equipped with a PV system of the initial capacity of 500 kWp (which can be subsequently expanded). No data centre operating in Poland has a similar solution at such scale. Furthermore, charging stations for electric cars will be developed on a parking lot in front of the Warsaw Data Hub, and ‘grey water’ (recycled waste water) will be used to irrigate the greens around the facility. Thanks to the technological solutions implemented in the Warsaw Data Hub, we will prevent CO2 emissions of about 5,000 tonnes annually, which corresponds to the annual emissions of 1,300 cars.

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