O2's 'Think Big' strategy was launched earlier this month
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O2's 'Think Big' ploy exposes limits to the green business ideal
22nd February, 2012
O2’s new green business strategy lays out some laudable ideas. But under the surface it seems that the mobile and internet company is doing little other than looking after its own profits
Earlier this month, mobile phone giant Telefonica UK – better known in the UK as O2 – launched its new sustainability blueprint, dubbed “Think Big”. Produced in partnership with Jonathan Porritt’s Forum for the Future, the three-year plan aims to position O2 as an industry leader on sustainable business practice.
The ambition is certainly laudable. Despite its relatively carbon-light public reputation, the IT and communications industry currently contributes more to UK carbon emissions than aviation.
At first glance, the plan appears a worthwhile mix of pragmatism and ambition. Over the next three years, O2 aims to halve emissions from its network, source 100 per cent renewable energy for its own transmission sites, and reduce CO2 emissions and water usage in its offices by 25 per cent. Furthermore, the communications giant is to stop providing new chargers as standard, and curtail plastic bag use in its high street stores.
Perhaps the most eye-catching target, however, is O2's ambitious plan to deliver overall carbon reductions in the UK economy worth ten times the impact of their network.
Ben Kellard, who helped develop the plan at the Forum, is optimistic that O2 is genuinely committed to meeting its sustainable agenda. 'We're quietly confident and impressed with the plans that [O2] have got. I think they can see the writing on the wall when it comes to sustainability, and they're choosing to take a lead on it.'
Gareth Kane, sustainability consultant and author of The Green Executive, also praises the blueprint as an effective mix of ambition and realism. 'They’ve really hit the button on two of the three big issues for green business. They’re good on their targets for internal performance in terms of energy and waste, and they’re good on the customer side – they’ve obviously recognised the opportunities for digital providers to cut the carbon footprint for the overall economy by providing new digital products and services.'
A template for others?
However, some doubts remain. Tony Greenham, Head of Business and Finance at the New Economics Foundation, would like to see more detail in O2’s blueprint. 'It is not set in the context of the actual ecological limits and social imperatives that we currently face. For example, how do the water and CO2 reduction targets compare with the overall global targets we need to achieve? We need to be able to judge whether O2 is doing its bit - or more, or less.'
'Similarly, the document does not give us the baseline data. Is O2 starting from a point of being the industry laggard on, say longevity of handsets, or is it already the industry leader and seeking to push new limits of best practice? We can't tell but we'd like to know.'
Kane also questions how O2 intends to accurately measure progress on its more ambitious and inherently vague goals, such as the ten-fold carbon impact reduction. 'Measuring that is going to be really difficult. Because, particularly with the consumer side, there’s a tendency for what we call 'What You Get is What You Need,' because it's so difficult to measure that it's easy to end up with whatever results you want.'
'That's still a work in progress', admits Kellard. '[O2] will get a first rough measure, but it is difficult to account for variable uptake, difference in usage, and the rebound effect. Measuring that is next to impossible.'
Kane also believes that O2 are not doing enough to demand sustainable best practice from their supply chain, which ultimately leads back to the mining companies and component manufacturers responsible for aggressive expansion in the developing world.
'For most organisations, the bulk of their environmental footprint is actually in their supply chain. But O2 don't seem to include procurement in their main CO2 footprint, and there are no hard and fast targets in the plan when it comes to the supply side. They spend $3 billion a year with suppliers, so they’ve got a massive opportunity to use that buying power to improve what's in the supply chain.'
Kellard, however, counters that O2 lacks the necessary muscle to force sustainability onto its suppliers. 'Although they spend a lot of money on procurement, they're actually relatively small buyers in their supply chains. The amount you can drive sustainability through your supply chain depends on your muscle. And the UK market is relatively small beer.'
Despite these criticisms, Think Big is certainly a step in the right direction. It also fits into a broader pattern of companies using sustainability to cut costs. As Kane explains, in last five years, the corporate sustainability debate has shifted from one of legislative compliance to one of strategic competitive advantage. Indeed, virtually all the commitments in Think Big will either cut O2’s overheads or open new markets for O2 products.
'We’re doing this because we think it’s the right thing to do, but we’re also because it makes economic sense for us,' O2’s Head of Environment Gareth Rice explains. In an interview with the Guardian earlier this year, CEO Ronnan Dunne described sustainable best practice as a way of ruthlessly stripping out inefficiency and delivering value to customers.
'Ronnan is not a philanthropist. He's very opportunistic, and he sees sustainability as a business opportunity', Kellard adds.
Indeed, much of O2’s tenfold carbon saving will come from selling new products such as GPS technology for efficient transport fleet management, as Rice explains. 'The savings to society from the new products and services that O2 is helping to deliver can outweigh the impact of us as an organisation. So yes, it will depend on how well those products sell, and how well we sell those products.'
Ultimately, O2 seem to be doing little more than what all businesses try to do: cut overheads and sell more product. Just because their overheads happen to be electricity bills, and their products may lead to indirect carbon savings, does not make them a paragon of sustainability.
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