Harnessing Data and AI for the Future of ESG in Telecommunications

Environmental, social, and governance (ESG) issues have become a major priority for telco leaders due to their fast and significant impact on modern business values. This includes efforts to reduce carbon emissions and meet net-zero targets while managing compliance with both existing and new regulations. Such changes have prompted governance reforms, which require stricter internal controls to ensure compliance and prevent misconduct. Ultimately, telco leaders must take the initiative by promoting ethical and responsible business practices, as well as respecting human rights and working conditions.

Telcos are positioning their ESG efforts in following three ways:

1. Creating business value

2. Attracting investors

3. Maintaining trust

Integrating the right set of ESG data will help create value

An effective ESG position is crucial for telcos to create value in multiple ways. Adopting sustainable practices will help attract and retain customers, reduce costs, and gain government support. A strong ESG position can also boost productivity gains by attracting and motivating talented individuals who want to work for socially credible companies. On the other hand, a weak ESG position increases the likelihood of losing revenue, incurring higher waste and disposal costs, and facing more regulatory fines. It can also lead to reputational damage and stranded assets due to the evaluation of unsustainable practices.

To foster a continuous culture of improvement, decision intelligence places robust data integration at the center of ESG reporting and performance.

Investors are paying closer attention to companies committed to ESG

Most telcos are well-known consumer brands. As custodians of those brands, CEOs must protect and enhance their value. According to Yannick Bolloré, chairman and CEO of Havas Group, a leading global brand agency, companies that score high on brand value outperform the stock market by up 134%. This value is determined by three types of benefits:

1. Functional benefits: These are the tangible advantages that products and services offer to customers, such as fair pricing, reliable performance, and high-quality offerings.

2. Collective benefits: This aspect relates to the brand's impact on society, including its ethical stance, economic contributions, and commitment to transparency and honesty.

3. Personal benefits: These are the individual benefits that customers derive from the brand, including convenience, peace of mind, and pride in being a customer.

Using data to drive trust is the foundation of modern-day business integrity. Unfortunately, the telecommunications industry has received a lot of negative press on issues related to corruption. In 2022, telcos were responsible for at least four of the top 10 enforcement penalties under the Foreign Corrupt Practices Act (FCPA).

The industry is also facing a wider range of ESG risks. For example, most telcos have committed to being net zero by 2035-2040, while regulators and investors are becoming increasingly vigilant about “greenwashing.” As a result, new regulations are emerging that aim to hold corporations accountable for their ESG commitments, which means that telcos will need to improve their ESG reporting standards. In the EU, an initiative called "Calls for Evidence" examines ESG ratings, which requires companies to accurately report their carbon emissions to support their ratings.

The decision intelligence advantage

With the aid of AI, Quantexa's Decision Intelligence Platform doesn't just automate processes—it empowers teams to act with greater speed and precision in their decision-making. It moves data and analysis to handle more complex needs so that telcos can do much more with data than just meet everyday expectations of adhering to service level agreements, ensuring billing accuracy, and monitoring network performance.

This strategic application of decision intelligence is key for telcos looking to grow B2B revenue streams, optimize supply chain integrity, and protect ESG credibility. It's about setting the pace, using insights to anticipate market needs, optimize supplier relationships, and embed sustainability into the core of their operations.

Telcos can leverage decision intelligence to use data and analytics to establish their own ESG corporate rule book with a set of clear rules, metrics, benchmarks, and reporting that the entire organization can support and operationalize.

In this way, decision intelligence isn't just a tool; it's a transformative force, equipping telcos to navigate the complexities of the modern market with agility and authority, ensuring they don't just compete, but set the standard as credible leaders in the digital landscape.

Read more about how decision intelligence can help with B2B customer intelligence, ESG reporting, and supply chain investigations.

How AI, Data, and Analytics Will Shape the Next Big Moves in Telecommunications