Q: Orange Polska has declared that it will achieve its 2025 climate goals ahead of the plan – what has made it possible?
The main source of our own emissions is electricity, especially that used to power our networks. And it is our determined efforts in this area that have enabled us to accelerate the reduction of our emissions.
First, our network teams have intensified energy optimisation. In fact, the constant increase in energy efficiency was the primary driver in reducing our climate impact until 2020. Overall, Orange Polska has cut its total energy consumption by about 18% since 2015, despite an approximately four-fold increase in the volume of data traffic on our networks in the same period. Although this will remain a very important area of our efforts, electricity consumption cannot continue to be reduced indefinitely: exponential growth in data transmission will outweigh efficiency gains in the coming years.
Therefore, the other key pillar of our efforts, that is energy mix transformation, becomes all the more important. In 2021, upon coming into force of the first long-term agreement for power purchase from new wind sources, renewable energy became a driving force behind our CO2 emission reductions. Owing to our efforts, particularly of the Purchase Department, and an innovative approach to search for new renewable energy projects, we have already secured four PPA agreements and thus ensured that we will achieve the target share of renewable energy in our energy mix, initially set for 2025, already in 2023; this will also result in major reductions in CO2 emissions: we will exceed a 65% reduction versus base year of 2015 three years ahead of the plan.
What has helped in reorganising and accelerating our efforts is the fact that all managers covered by a semi-annual bonus objective scheme have been accountable for a mandatory solidarity goal of emission reduction since the beginning of 2022. Similar goals have been also included in the long-term incentive programme for the key executives.
Most importantly, Orange Polska’s climate actions are closely linked to its business activity – they are not an add-on or decoration. This is why they can have a long-term character and produce marked improvements. Energy is the crucial resource in the digital sector; it is both a major cost item and the largest source of emissions. Hence, our focus on it.
Q: What else with be a priority in Orange Polska’s climate actions in the coming years?
Naturally, we do not rest on our laurels or abandon our work on Scopes 1 and 2. There is still much to be done and we will use every opportunity to further improve our performance. However, as we have advanced in reducing our own emissions, we can now focus on another important, though not easy topic, that is value chain (Scope 3) emissions, especially by our suppliers and customers. This year, we have published estimates of total Scope 3 emissions for the first time. These emissions consist of two components, comparable in size.
The first component is emissions related to the generation of energy traded by Orange Energia. Although considerable in volume, they are not related to our core business activity. Hence, they are presented and approached separately. Nevertheless, they are also covered by our overarching objective of achieving net zero carbon for all emissions.
The second component is particularly important to us, as it is related to the very heart or our activity. These are emissions by our suppliers, customers and employees in connection with the Orange Polska’s activity in the digital sector. We have identified three priorities on which we want to focus in order to achieve the Orange Group’s Scope 3 emissions objective: an at least 14% reduction by 2025 versus 2018. These crucial issues include: energy consumption by customers for powering the devices required to use our services (especially fixed-line equipment: modems and set-top boxes), network infrastructure investments, and emissions related to the production of equipment sold or provided to our customers. Of course, we are not starting from scratch: it is worth mentioning in this context the excellent results of the refurbishment of customer premises equipment, which has been carried out by our Supply Chain function for years.
Furthermore, in April 2022 we launched the umbrella RE programme to reorganise and accelerate our efforts to extend the life cycle of mobile phones, reducing the emissions related to their production and use. The key elements of this programme include buy-back or recycling of handsets (depending on whether they are still working or not), equipment repairs and expansion of our refurbished phone offer.
Finally, 2025 is obviously not the end of the road for us – it’s net zero 2040 that is our overarching objective We’re preparing our action plan for 2030, as Orange Group has recently announced its science-based mid-term goal for that perspective: at least -45% reduction of all emissions (scopes 1+2+3) in comparison to 2020.
Q: What are the biggest challenges to be faced by the Company in the near future?
The main systematic challenge faced by all energy-intensive sectors, the digital one among them, is the availability of new renewable energy sources in Poland. What we all need is determined support for investments in new large solar facilities and onshore or offshore wind farms, as well as rapid improvement in the nationwide power grid.
Yet another very important issue is customers’ education and commitment, on which we have already been working. Our responsibility as a telecom operator is to both address our own emissions and implement solutions to enable a reduction of emissions by customers who use our services. This is why we are working with our suppliers to increase the energy efficiency of our devices and implementing new energy-saving modes. Yet the final step is to be made by customers, who need to select such a mode and accept that the device start-up time will be a dozen or so seconds longer in return for considerable energy savings. The situation is similar with collecting used devices or selling refurbished phones: it is up to us to develop the relevant processes and offers, yet at the end it is customers who need to come and leave their phone in one of our outlets or decide to buy a refurbished device.