In conversation with
Stephen Young, Principal Analyst, Ovum

In each issue, a key figure with a particular interest in environmental, social or educational issues discusses their views with BetterWorld.

Stephen Young has been Principal Analyst at industry analyst firm Ovum since January 1996. He is the lead author of several best selling Ovum reports and is responsible for establishing Wholesale@Ovum, the online service which analyses and advises on developments in wholesale telecoms. Last year, Stephen was the author of Climate Change and the Telco, a paper which suggested that telcos could be victims, villains or heroes of climate change.

Stephen, were you surprised by the lack of response from telcos following publication of that report?

I was surprised but also, in a way, unsurprised. Only one telecommunications company raised even a flicker of interest in the report, and that was BT. But climate change is still not on the radar of a lot businesses. Yet it certainly should be especially telcos.

You say in Climate Change and the Telco that there are three ways in which climate change affects telecoms firms can you expand?

Telcos are not major contributors to climate change, but their activities do have impacts, some negative, and some positive. Telecoms firms can be one or all of the following: They can be victims of climate change, where their activities are adversely affected by the increasing number of severe weather events; they can be villains of climate change, producing emissions which contribute to global warming; they can be heroes of climate change, with the potential to reduce climate change in other industrial and domestic sectors, particularly transport, through a reduction in carbon emissions.

There arent many industries that can actually do something to help offset the effects of climate change. However, the telecoms industry is one of them. Added to that is the fact that the telecoms sector has a relatively benign environmental impact. Certainly it has a pretty low footprint compared to other industries especially relative to the gdp it contributes.

So how can telcos help offset the problems travel substitution?

Well, yes thats the obvious thing. There is still a huge potential for the greater use of telecommunications to substitute for a lot of travel. By this I mean home-working and video-conferencing plus the substitutions enabled by e-commerce and e-government. However, theres an array of issues and technologies coming along in the future that represent fantastic opportunities for telcos. For example, if we do move to a situation where individual carbon rationing becomes a reality and thats something that the government is looking at currently how will that work in practice? This sounds to me like an entirely viable commercial opportunity for the telcos. Their expertise will be needed in order to deliver huge telemetric solutions.

What do you think is stopping some telcos acting with greater urgency then?

I think that maybe some telcos are more pre-occupied with the disruptive changes that are taking place across the sector at the moment. Theres an attitude of ok, well get round to looking at that one day, but not just yet thank you very much.

BT has recognised the issues would you agree?

There is high level acknowledgement in companies like BT. I know people like Ben Verwaayen and Sir Christopher Bland are taking the issue of climate change and carbon neutrality very seriously. Sky seems to be active as well. I understand that Sky went carbon neutral in May this year, for example. The fact that at least two primary communications businesses appear to be pushing in the right direction could be exactly what the industry needs..maybe a little competition is healthy.

OK, so you believe BT is going in the right direction?

Yes, in so far as the CSR people are on the case, but Id argue that the impact of climate change and related issues transcend CSR as a business function. It goes way beyond just doing the right thing. Its about exploiting commercial opportunities, reducing business costs and helping other businesses, maybe customers or suppliers for example, to reduce their environmental footprints as well.

Stephen, do you believe the analyst community is paying more attention to environment issues nowadays?

Absolutely and the climate change issue is a good indicator. Theres a great deal more interest in environmentally-friendly trading in general. You only have to look at consumer behaviour to understand that consumers are aware of the impact of business activities. They will have no qualms in exercising consumer sovereignty when making purchasing decisions that are aligned with their own beliefs and codes. And businesses are compelled to pay attention to these things. For example, look at the explosion of organic food for example. Completely consumer-driven. I read the other day that organic baby food accounts more than half the total baby food sales in the UK, which is extraordinary. Businesses need to catch up across the whole spectrum.

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