Robeco, The Investments Engineers

11-01-2013 · Column

Focus on ESG risks crucial in the telecom sector

When considering sustainable corporate operations you initially think of preventing child labor in the textile industry or of recycling metal. The telecom sector does not immediately spring to mind. However, in this sector there are actually many specific issues, particularly relating to social (S) and environmental (E) aspects of the business that, if not properly managed, can expose telecom companies to considerable risk. I will focus on the most significant of these.

    Authors

  • Edith Siermann

    Edith Siermann

Top keywords

Privacy and freedom of speech

In this era of mobile communication and cloud computing there is a huge increase in the volume of network data. It is therefore crucial for telecom companies to handle client and user data carefully. It has recently become apparent that this does not always happen. Companies that are unable to protect the privacy of their customers run the risk of losing them or being confronted with legal risks. In the event of data theft, confidential information can be placed in the public domain or an individual's privacy can be violated. Other major issues that affect telecom providers are the protection of client data from illegal government access and ensuring that freedom of speech is guaranteed. This means that it is also important for telecom companies to have procedures and directives in place to prevent possible financial and reputational damage.

CO₂ emissions and electronic waste

The ICT sector is responsible for around 2% of global CO2 emissions. As a result of the growth of social media, cloud computing and smart electronics demand for ICT infrastructure is constantly increasing. Data centers are responsible for a rapidly rising proportion of these emissions. As a sustainable investor, you therefore want to know what initiatives a company is taking to reduce the environmental footprint of its data centers, for example, by using renewable energy sources. Does this company put its clients in a position to reduce their environmental footprints? An electronic waste policy is also necessary, as is a way of sharing responsibility with the handset makers.

Stay informed on our latest insights with monthly mail updates

Receive our Robeco newsletter and be the first to read the latest insights and build the greenest portfolio.

Stay updated

Personnel policy

Human capital is crucial for many industries. This applies primarily to information-oriented industries. It is thus vital for telecom companies to recognize the importance of personnel development and the need to retain talented staff. Investing in sustainability is an increasingly important factor in attracting high-quality personnel.

Supply-chain management

Many environmental, social and governance (ESG) risks do not lie with the company itself but with its supply chain. In the case of mobile phones, and other electronic devices, raw materials such as tin can come from areas of conflict. It is therefore important for a telecom company to assess and manage the ESG risks in its supply chain effectively.

These examples demonstrate that sustainability is manifested in a number of different ways. Sustainability is not sector- or product-related - it is an issue that plays a role throughout all facets of industry.

This column appeared at an earlier date on FD.nl

Related topics

share

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Stay updated
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information
The Robeco Capital Growth Funds have not been registered under the United States Investment Company Act of 1940, as amended, nor or the United States Securities Act of 1933, as amended. None of the shares may be offered or sold, directly or indirectly in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act of 1933, as amended (the “Securities Act”)). Furthermore, Robeco Institutional Asset Management B.V. (Robeco) does not provide investment advisory services, or hold itself out as providing investment advisory services, in the United States or to any U.S. Person (within the meaning of Regulation S promulgated under the Securities Act).
This website is intended for use only by non-U.S. Persons outside of the United States (within the meaning of Regulation S promulgated under the Securities Act who are professional investors, or professional fiduciaries representing such non-U.S. Person investors. By clicking “I Agree” on our website disclaimer and accessing the information on this website, including any subdomain thereof, you are certifying and agreeing to the following: (i) you have read, understood and agree to this disclaimer, (ii) you have informed yourself of any applicable legal restrictions and represent that by accessing the information contained on this website, you are not in violation of, and will not be causing Robeco or any of its affiliated entities or issuers to violate, any applicable laws and, as a result, you are legally authorized to access such information on behalf of yourself and any underlying investment advisory client, (iii) you understand and acknowledge that certain information presented herein relates to securities that have not been registered under the Securities Act, and may be offered or sold only outside the United States and only to, or for the account or benefit of, non-U.S. Persons (within the meaning of Regulation S under the Securities Act), (iv) you are, or are a discretionary investment adviser representing, a non-U.S. Person (within the meaning of Regulation S under the Securities Act) located outside of the United States and (v) you are, or are a discretionary investment adviser representing, a professional non-retail investor.


Access to this website has been limited so that it shall not constitute directed selling efforts (as defined in Regulation S under the Securities Act) in the United States and so that it shall not be deemed to constitute Robeco holding itself out generally to the public in the U.S. as an investment adviser. Nothing contained herein constitutes an offer to sell securities or solicitation of an offer to purchase any securities in any jurisdiction. We reserve the right to deny access to any visitor, including, but not limited to, those visitors with IP addresses residing in the United States. This website has been carefully prepared by Robeco. The information contained in this publication is based upon sources of information believed to be reliable. Robeco is not answerable for the accuracy or completeness of the facts, opinions, expectations and results referred to therein. Whilst every care has been taken in the preparation of this website, we do not accept any responsibility for damage of any kind resulting from incorrect or incomplete information. This website is subject to change without notice. The value of the investments may fluctuate. Past performance is no guarantee of future results. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. For investment professional use only. Not for use by the general public.