In this exclusive interview with Ericsson’s Head of Corporate Social Responsibility, Elaine Weidman, Green Telecom’s editor Tony Chan finds out about the company’s approach to, not only managing its own environmental impact, but support the success of its customers towards a new carbon lean economy.

Green Telecom: So tell us about Ericsson’s CSR initiatives?

Elaine Weidman: Basically, we have two main parts to corporate responsibility. The first component is making sure that we have the right control in place to minimize any risk in the area, so that’s about policies, directives and our code of conduct, business ethics and so on. The other part is more about creating positive business impact from the use of telecommunications. On that side of the equations, we have two main focus areas: One is energy and climate change, and the other on social and economic development.

On the social and economic development side, Ericsson is in more than 170 different markets and we’re looking at how we can make communications more affordable and more accessible to basically the people at the bottom of the economic pyramid. We are looking at the business as such, where 90% of the subscriber growth is coming from emerging markets, and how can we create business models and new ways of thinking to make communications more affordable. It’s important to say that nothing that we are doing in the CSR area is charity or philanthropy base. We are a Swedish company and we pay high taxes and the government does charity. So everything we do we are looking at generating sustainable business cases, sustainability throughout the project. On the social economic side, we have partnered with Columbia University in New York to bring telecommunications connectivity to the Millennium Villages in Africa. This is about half a million people in 10 countries in the sub-Sahara. We are looking at supporting the Millennium development goals and bringing connectivity to those villages and support areas like access to healthcare, education, small business development and so on through the use of telecoms in very, very remote and poor areas.

On the energy and climate change side, we are working on a number of ways; part of it is about our own network, our own solutions and how we work with energy efficiency, both as a cost driver and also from an innovation, business, and competitive point of view. We are also looking at how telecommunications in it of itself, can be used as a way to create a more carbon lean economy. Those are the key areas.

One of the initiatives that you mentioned is how Ericsson is looking at ways to leverage the telecoms infrastructure to support a more carbon lean economy, can you give some examples in this area?

We are looking at it from a couple of different perspectives. We start our work looking at our lifecycle assessment. What we are doing basically is measuring the environmental impact of a mobile network is – that is the starting point, but then we are also looking at the overall contribution of the whole sector when it comes to climate change. We are looking basically at the ICT sector, including mobile telecoms, routers and data centres and everything as having about 2% of the global emissions as a whole, including Ericsson. But then we say, what about the other 98%, how can telecoms, smart use of telecoms be used to offset emissions in other sectors, such as travel and transportation, buildings, heating and lighting and the other big CO2 contributors in society.

So we are working cross-sectorally to see how we can apply telecommunications in other sectors. We have a really good example in Australia with Telstra, where Ericsson provided Telstra’s HSDPA network. We did one of the first studies of its kind – I know Telstra has been really active in looking at the climate change issue, but one thing we did recently is, a few months ago together was, a survey of some of Telstra’s customers, not the consumer subscribers, but more business and enterprise uses, and we did a survey asking them – based on the HSDPA and the services that they have, what is happening with behaviour? Do people actually travel less? Is it possible to substitute physical transport? The results that we got back basically showed that on average people travel 5% to 10% less, but as high as 17% less. So the introduction of mobile communications has a positive impact on travel reduction – as well as paper and printing and so on.

It was a significant study because it was really one of the first to really look at how bringing voice and broadband services to the population has had an impact. The survey was conducting in 26 countries across 15 industries.

Besides the obvious use of the network to replace activities such as travel, is Ericsson also developing or helping its customers develop, applications that further the use of the infrastructure, applications such as telematics for example?

We have three different business units. In all three of the business units, we are working with sustainability questions from both product and development point of view. In our network business unit, we are actually working with the radio base stations and the actual network infrastructure. In our services business unit, there we are looking at energy optimisation as a service to our customers – how to help them make their networks more energy efficient and cost efficient. Then, what I think you are talking about now, is our business unit, Multimedia, where we work with application developers. There, the number of different initiatives includes working with the transport sector for example, and looking at smart travel, CO2 calculators for travel.

Is there a compliance element when it comes to establishing corporate sustainability, especially in the EU?

I would say not so much affecting our sector. There are some energy-related directives coming out of the EU, but so far, from an environmental point of view, the focus at the EU has very much been on product take back, as well as on hazardous substances.
I would say that what is happening if you look at the EU, with Commission (Vivienne) Redding, is that there’s a lot going on, but it hasn’t come into legislation yet. There is a lot of policy work going on looking at how to use information and communications technology as a way to create a carbon lean economy. I think the awareness is there, and is starting to growth even though it is not legislated yet.

In general, we are working with partners, and we publish what is our carbon footprint each year. Basically, I think we have a pretty unique approach to this. We look at the Ericsson CO2 emissions direct from our factories, facilities and so on, and we would capture about 2% of what we think is our total carbon footprint. That sounds kind of strange that a company would claim that, but this is what we have learned from more than a decade of pretty advanced lifecycle work. What we look at is our sphere of influence, so not only in our factories and offices, but what happens when you put a telecoms network out there that lives a 10-15 year lifetime, what’s happening with the energy consumed during the usage, because that is where the main environmental impact occurs, when our products are in use by our customers. So if we look just at the Ericsson facilities, like many companies do, we feel that we’d miss the big picture. Our main focus when it comes to targets is very clear – that is energy consumption during use – and there we have probably the most aggressive targets in the industry where we have said: For the WCDMA portfolio for example, that we would improve the energy efficiency of the whole portfolio by up to 80% by the end of 2008, from a 2001 baseline. Our main targets are on the mobile side, the radio equipment, because that is really our main volume product with the main impact from a lifecycle point of view.

We have our targets for our portfolio, but we also introduced new features in our install based. There’s more than a million Ericsson base stations around the world – a lot of GSM equipment. We still need to improve the energy efficiency for those equipments. The Powersave feature for GSM networks puts the whole network is sleep mode, like your computer goes to sleep when not in use, you can power down parts of your network during low traffic periods, for example, in the middle of the night. That’s one example of energy efficiency for existing networks.

Regarding carbon reporting, you are absolutely right that it is not reliable to just look at an absolute number, since more business would likely equal more carbon emissions, but is there some way of measuring this performance, perhaps through carbon per revenue?

We do have a number of key performance indicators that we measure year over year, where we look at CO2 per net sales for example. On the carbon footprint level, we see our carbon footprint for 2007 is similar to 2006 in terms of total carbon, but with a 25% increase in sales volume. We are looking now at how to set carbon footprint level targets, and that is probably what we will come out with next year, but its too early to really talk about that yet. We are trying to work through how to measure these things in an accurate way. Energy in telecoms really requires more industry cooperation and standardisation about how we measure sure, so we are all comparing apples to apples.

One topic that is being discussed is the inclusion of environmental performance as a metric of a company’s overall performance, or basically putting environmental reporting inside the annual report. Is this something that Ericsson is considering, or doing perhaps?

We’ve been doing that for a number of years. Our reporting is a triple-bottom line already. We have our financial reporting together with our environmental and social reporting, so we do include information in our annual report and we have a corporate responsibility report that is published as a sister document to the annual report. And we publish that at our annual general meeting of our shareholder.

Does Ericsson have targets internally for carbon reduction, for example in different departments? Locations?

Yes, there’s a lot of work internally. What we are doing is, instead of saying that you should not travel – that kind of approach doesn’t work, we are a global company, so people do need to travel. What we are looking at more is how we conduct meetings, so we have introduced applications to support the use of teleconferencing, to support the use of an application called “same time,” an online meeting and collaboration tool. What we just did for 2007 is look at our top five travel destinations globally in terms of kilometres travelled as well as the number of flights, so we are now targeting those offices to more actively promote the use videoconferencing, as well as the use of our products and services. We are a very mobile workforce, and we want to promote better use of our product and services amongst our people.

One related area to carbon is renewable energy, what is Ericsson doing in that respect?

There are some measures to use renewable energy in our offices, but our main work with renewables is in relation to powering telecoms networks through the use of solar, biofuel, and wind, and we have fuel cell trials and so on, so we are looking at – as the market continues to build out to remote area in emerging markets where in many times, there is no power grid, or only very unreliable power grid – how to bring power to those sites. In Africa for example, one telecoms site can consume up to 20,000 litres of diesel in a year – that is an enormous amount of diesel and you have to ship that diesel out to the site by truck to a very remote area where the roads are bad and so on. So we are looking increasingly at using renewable energy resources for those sites.

I know Ericsson has had solar-powered base stations for a long time now, but have you seen any advanced on that side of the equation? I mean cellular technologies and equipment have advanced significantly in recent years, has the renewable component undergone any advancement?

Yes. We were probably the first in the industry to use solar power in the year 2000. Back then you needed football fields in solar panels, so it wasn’t really economically feasible to run wide-scale solar networks. Today, as the price of diesel has gone through the roof and energy has become more and more in focus, at the same time, the technology development in the radio equipment has made mobile technology much more energy efficient. So the combination of two things – the sites now can be much smaller and still provide the coverage and capacity, together with the increase in the price of oil, has really made solar much more mainstream today. It is much more economically feasible to use solar to power the network.