30 September, 2020
ETNO Position Paper on the European Commission's Renewed EU Sustainable Finance Strategy and Green Bond Standard
The telecommunications industry is a substantial enabler of the transition to the EU Green Deal. Telecommunication companies have invested and continue to invest heavily in the build-out and upgrade of energy efficient and high-speed network infrastructure, as well as in the growth of Digitalisation. They thus play a key role for achievement of the taxonomy’s first and so-far most-defined objective: “Climate change mitigation”.
This contribution is realized by numerous well-established activities around climate protection and resource efficiency in ETNO members’ own business (“greening of”) as well as by enabling customers and society to save resources by the use of digital solution and products (“greening by”). ETNO member companies have a long-standing history of transparent business operations and sustainability reporting. They appreciate the role of the EU taxonomy as an essential facilitator of the EU Green Deal, with the purpose of channelling long-term, sustainable finance into sustainable activities.
ETNO members therefore fully support the general intention of the EU taxonomy and are convinced that through intensive dialogue and engagement over the upcoming months, the below-mentioned concerns can be successfully resolved to leverage the intended ambition of the EU’s regulation on sustainable finance.
The main concerns of ETNO members relate to the lack of definition of activities which may count as taxonomy eligible for the ICT sector and Technical Expert Group’s suggestion for setting a 10% threshold in terms of energy efficiency for communication networks.
As the taxonomy regulation will greatly impact the investment activities of networks and further products and solutions, it is of paramount importance that taxonomy criteria for all six taxonomy objectives be defined in a clear, comparable and incentive-compatible way. This is also crucial for timely implementation of any newly required monitoring and reporting processes within companies. Criteria for taxonomy-eligibility of business activities around “climate change mitigation” in telecommunication networks have already been proposed by the Technical Expert Group, proposing that only the top 10% of energy efficient activities in the EU shall be considered as taxonomy-eligible.
As to this specific area, ETNO urges the Commission to reconsider this approach in order to operate more harmoniously with sectoral climate change initiatives, while also avoiding to create disincentives for the required massive investment in digital infrastructure. The taxonomy should rather establish a reliable basis for investment and incentives to constantly improve the energy efficiency of deployed technology. Therefore, ETNO members propose to consider a KPI for energy/carbon efficiency, in order to recognise company-specific improvements (e.g. >15% with respect to an earlier defined company-specific energy efficiency baseline). Such KPI should qualify for taxonomy eligibility.
To further guarantee relevant entry levels for taxonomy-eligibility, the Commission should consider adding a company-level commitment to an overall established standard, on top of the energy/carbon intensity criteria. (i.e. through the adoption of “Science Based Targets” and/or a specific minimum share of renewable energy use).
ETNO and its member companies appreciate the Commission’s commitment to an enhanced stakeholder dialogue on the EU taxonomy. In this context, ETNO has applied to become a member of the New Platform on Sustainable Finance, with a view of sharing our expertise as a crucial European investor in digitalisation.
Read the full position paper at the link below.