Towards a circular economy: The Telecom Industry

Circularity

The concept of circular economy aims to transition from a linear economy to a more sustainable model that maximizes the value of materials and products. By implementing the principles of the circular economy, resources are used more efficiently, waste is reduced, and the lifespan of products is extended. This approach involves utilizing the 9 R’s of the circular economy to create added value and promote sustainability.

1. Reduce
2. Reuse
3. Repair
4. Refurbish
5. Remanufacture
6. Repurpose
7. Recycle
8. Recover
9. Regenerate

Currently, only 8.6% of the more than 100 billion tons of resources that enter the global economy each year are recycled or reused. This unsustainable situation contributes to the loss of biodiversity, with natural resource extraction being responsible for 90% of biodiversity loss. According to the Circularity Gap Report 2023, the global economy is only 7.2% circular and this percentage is decreasing every year. This means that 90% of materials are wasted, lost, or unavailable for reuse for extended periods.

Circular Economy in Telecommunications

The telecommunications sector recognizes the importance of the circular economy and incorporates its principles into its business strategies. A significant percentage of telecom operators (89%) consider the circular economy as part of their operations. They believe that embracing the circular economy can help overcome supply chain challenges and accelerate network deployment.

In the European context, it is estimated that the European Union produces over 2.2 billion tons of waste annually. Transitioning to a more circular economy in the telecommunications sector can enhance competitiveness, stimulate innovation, drive economic growth, and create job opportunities. Studies suggest that the circular economy has the potential to increase EU GDP by 0.5% and generate more than 700,000 new jobs by 2030.

At Telefónica, we are committed to promoting the circular economy in our processes, collaborations with suppliers, and interactions with customers. In our network transformation efforts, we prioritize the reuse of electronic equipment. When reuse is not feasible, we extract value from materials through recycling. Our Telefónica Circular Economy Plan aims to achieve zero waste by 2030 through eco-design, reuse, and recycling. By 2023, we have already managed to reuse 313,805 pieces of network equipment and recycle 97% of our waste.

Reuse of Network Equipment

The reuse of network equipment plays a crucial role in achieving a circular economy in the telecommunications sector. Accenture’s report suggests that the value of recycled hardware could reach between $45 billion and $80 billion annually by 2030. Additionally, significant financial benefits can be realized through the sale of devices as services and refurbished devices.

Within Telefónica, we prioritize internal reuse during network transformation processes, contributing to the circular economy. To further enhance equipment reuse, we have developed MAIA, a Marketplace platform that utilizes blockchain technology. MAIA enables us to visualize available equipment for reuse, connect supply and demand, and facilitate the purchase and sale of second-hand equipment within our group companies.

If internal reuse is not possible, MAIA allows us to connect with multiple technology partners to find second-hand equipment a new life. Through initiatives like MAIA, we have managed to reuse over 313,000 pieces of equipment in 2023, a 36% increase compared to the previous year. When reuse is not feasible, we prioritize the transformation of materials through recycling.

To digitize waste management and improve the circular economy, we utilize GRETEL, a platform that provides greater traceability and information on recycling and final disposal of equipment. GRETEL reduces risks and impacts associated with inadequate treatment. Currently, Telefónica has reused 43% of its total network equipment and recycled the remaining 57%, aligning with the goal of becoming a Zero Network Waste company by 2025.

Benefits of Digitization and Blockchain

Digitalization and connectivity offer significant opportunities for the circular economy. Technologies such as blockchain and big data are utilized to enhance logistics processes, improve equipment traceability, and reduce CO2 emissions.

Blockchain technology, in particular, enhances traceability, transparency, and efficiency in resource and product management. It enables detailed and secure tracking of materials throughout the supply chain, ensuring data integrity. By eliminating intermediaries, blockchain reduces operational and administrative costs while facilitating the creation of new business models that optimize resource management and minimize waste.

Gartner predicts that the value of revenue generated by blockchain will reach $3.1 trillion by 2030, highlighting its transformative potential for business operations.

The circular economy is not only crucial for improving sustainability but also presents opportunities to increase efficiency, reduce costs, and generate new revenue streams. Collaboration and innovation are key to transitioning towards a more circular and sustainable economy where resources are maximized.

SDGs, Targets, and Indicators

1. SDG 12: Responsible Consumption and Production

   • Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
   • Indicator: Percentage of resources recycled or reused.

2. SDG 15: Life on Land

   • Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats.
   • Indicator: Percentage of biodiversity loss caused by the extraction of natural resources.

3. SDG 8: Decent Work and Economic Growth

   • Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavor to decouple economic growth from environmental degradation.
   • Indicator: Circular economy contribution to GDP growth and job creation.

4. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes.
   • Indicator: Adoption of circular economy practices in the telecommunications sector.

Table: SDGs, Targets, and Indicators

Analysis

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The issues highlighted in the article are connected to SDG 12 (Responsible Consumption and Production), SDG 15 (Life on Land), SDG 8 (Decent Work and Economic Growth), and SDG 9 (Industry, Innovation, and Infrastructure).

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s content, the specific targets identified are:
– Target 12.2: Achieve the sustainable management and efficient use of natural resources.
– Target 15.5: Take urgent and significant action to reduce the degradation of natural habitats.
– Target 8.4: Improve global resource efficiency in consumption and production and decouple economic growth from environmental degradation.
– Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and adoption of clean technologies.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, there are indicators mentioned or implied in the article that can be used to measure progress towards the identified targets. These indicators include:
– Percentage of resources recycled or reused.
– Percentage of biodiversity loss caused by the extraction of natural resources.
– Circular economy contribution to GDP growth and job creation.
– Adoption of circular economy practices in the telecommunications sector.

The article mentions specific percentages of resources recycled or reused, biodiversity loss caused by resource extraction, circular economy contribution to GDP growth and job creation, and adoption of circular economy practices in the telecommunications sector.

These indicators can be used to measure progress towards the identified targets by tracking the improvement in resource recycling and reuse, reduction in biodiversity loss, contribution of circular economy practices to economic growth and job creation, and adoption of sustainable practices in the telecommunications sector.

Overall, the article highlights the importance of circular economy principles in achieving sustainable development goals and provides examples of how Telefónica, a telecommunications company, is implementing circular economy practices to reduce waste, promote reuse, and contribute to a more sustainable economy.

Source: telefonica.com