'We need to put this agenda forward': How BT is redoubling its net zero efforts in wake of Covid-19

BT has long been a corporate leader on climate action. In 2008 the digital telecoms giant became one of the first companies in the world to adopt a science-based emissions reduction target in line with keeping temperature increases below 2C, which it achieved four years early in 2016. Staying ahead of the pack, it then also became one of the first corporates to ramp up its targets further to bring them into line with a 1.5C warming trajectory, pledging to slash CO2 emissions from its core businesses by 87 per cent by 2030 against 2016/17 levels. The announcement of a full net zero target for 2045 followed in 2018. And, all against the backdrop of continued revenue growth, expansion into sports broadcasting, and the huge and accelerating changes underway right across the digital technology industry.

But, as with any other company currently, BT is set to face a very different economic and political landscape when the UK emerges from the coronavirus crisis. With a mounting public health crisis on-going and a major recession looming, companies, investors, and policymakers across all sectors have been forced to re-draw their short-term and, in some cases, long-term strategies. Such a re-think could easily placed green projects in a precarious position in some quarters, with firms potentially delaying climate action, or even cutting such projects altogether, as they focus their efforts and resources on more immediate priorities.

For BT though, the upheaval caused by the pandemic and resulting lockdown has if anything emboldened the company in its climate action efforts, according to head of environmental sustainability Gabrielle Ginér.

"What we've actually seen in the last few weeks is that we've increased our focus [on decarbonisation] because I think the public is thinking about resilience - so the question is what can companies like us do?" she tells BusinessGreen. "So definitely our focus has not diminished."

Hearteningly, BT is not the only firm to have taken this attitude, with the company among those this week calling on the government to build a green recovery from the crisis that prioritises investments that drive decarbonisation and create low carbon jobs. The broad corporate, political, and public support to avoid locking-in high carbon infrastructure in the wake of Covid-19 stands in stark contrast to the fallout from the 2008 financial crisis, and demonstrates how far the climate conversation has moved over the past decade since BT first adopted a science-based CO2 target.

"When COP26 was postponed, I think a lot of people were worried the climate agenda would disappear, but since then we've definitely seen from the government that climate is very much on top of the agenda still," says Ginér, who also holds a key global climate advocacy role as chair of the UNFCCC Momentum for Change Advisory Committee. 

"As big companies we just need to put this agenda forward," she adds. "It's going to be critical that we don't stop talking about what we need to do next - which is around renewables, electric vehicles, electric vehicle infrastructure, for example. We need to think about where the next jobs are going to come from, and where we need to go. I think that's hugely important."

For BT itself, the nature of its business - spanning broadband, communications, and digital services - has meant it has had a critical role to play during the pandemic, with millions of workers staying at home and relying on their own internet connections and digital devices to communicate with colleagues, friends, and family. The crucial importance of broadband services to the economy during lockdown has been plain for all to see, potentially accelerating the longer term shift towards digitalisation in the process.

"Unless you do a physical job, the only way you will have been able to do your job, educate your kids or even visit your doctor is by using the phone and broadband network, and that's ultimately what we are here to do," explains Ginér, who has now been at the forefront of BT's green efforts for more than a decade. "The role we play in that has been critical - we have been providing the infrastructure to enable everybody to work throughout this very difficult situation."

It is here that BT has been redoubling its green efforts in 2020. After all, while proud of its reputation as a corporate climate leader, the firm is also well aware the UK will be unable to deliver on its net zero goals, and BT itself will be unable to unleash the full green potential of its own business, unless the rest of the economy transforms how it operates.

The nature of BT's business and the role it plays in the economy puts it in a strong position to influence swathes of companies in other sectors through its supply chain. In 2018, the company agreed a groundbreaking supplier climate contract clause with Chinese technology giant Huawei, which requires proof of carbon savings as part of contract. Since then, it has agreed similar clauses with another 12 of its key suppliers.

And now, Ginér exclusively reveals to BusinessGreen, BT has opted to increase its supply chain CO2 target. "We've decided we're going to reduce the carbon emissions associated with our supply chain by 42 per cent by 2030," she says, noting the previous target of a 29 per cent CO2 cut by 2030 was still aligned with a 2C pathway.  

The new target covers BT's supply chain and does not include emissions from the use of its products and services, but the firm is currently working on developing a more ambitious target for its full Scope 3 value chain emissions too, according to Ginér.

"What we need to think about given everything that's happened, is how do we work with our value chain and our suppliers? We must not forget about that," she explains. "That's the thing that companies like BT can do - how can we influence our supply chain?"

BT's efforts are clearly paying off. The firm's annual report released late last month revealed it reaped £5.5bn in revenue from products and services it claims helped its customers avoid a collective 13 million tonnes of carbon dioxide emissions worldwide last year. Services such as broadband, teleconferencing, remote apps, automation, and cloud-based networking products - which have been in even more demand in 2020 in the wake of Covid-19 - help to reduce greenhouse gas emissions by cutting energy use, avoiding the need for travel, and reducing manufacturing and materials demand, according to BT's analysis.

As such, with millions of Britons working from home at present, and the likelihood that remote working could become a far more common feature across the UK going forward, it has been mooted by Committee on Climate Change CEO Chris Stark and others that the government shift a sizeable portion of its planned expenditure on new roads towards improving access to faster, 5G broadband instead. It is a policy Ginér believes would now have strong public backing, with the lockdown having demonstrated to more people how digital technology can help them work remotely, and in many cases more efficiently.

However, for all the progress being made with digital technologies and remote working practices, the biggest barrier between BT and its own 2045 net zero emissions goal centres on the more prosaic reality of its 34,000-strong road UK vehicle fleet. The firm has committed to transitioning the entire fleet over to run on electricity, but the project faces significant challenges. It is one of the largest corporate fleets in the UK, but the electric car and van market is not yet well-established enough to support BT's 100 per cent EV ambitions, it claims.

To that end, the firm earlier this week joined forces with non-profit The Climate Group to launch the UK Electric Fleets Alliance, a corporate coalition advocating for a 2030 phase-out of fossil fuel car sales - five years sooner than the government's current proposals - alongside targeted policy support for businesses to help them switch their fleets to run on electricity. BT's aims here should dovetail nicely with the UK government's, as for both transport is their largest source of emissions, and neither are therefore capable of hitting their net zero goals without a major low carbon transformation in this area. The question is whether manufacturers can respond quickly enough to the buying signals from companies desperate to acquire new EV models, especially when some brands are still lobbying for diesel and petrol cars to be subsidised as part of any economic recovery package.

It is a debate BT and the Climate Group hopes to win, as the company continues to ramp up its net zero efforts even as the economic headwinds created by the coronavirus crisis intensify. Moreover, in addition to the push for an end to petrol and diesel car sales and ramping up its supply chain emissions goals, the company has also just launched a new Green Tech Innovation Platform to support clean-tech scale-up companies. And, for the first time ever, BT has included progress on carbon reduction in the calculation of bonuses for eligible employees. Set to be introduced this year, the company's new remuneration policy will see CO2 emissions reduction make up 10 per cent of the Group's bonus calculation, in a bid to further incentivise decarbonisation progress.

There are clearly challenges and major changes ahead for the economy in both the short and long term, and BT looks set to be a key player in delivering many of the changes in the way businesses and workers operate. And, should the market for EVs rapidly mature in the UK, Ginér believes there is a chance BT - which does not rely on CO2 offsetting measures in its climate strategy - could even become a net zero business sooner than its current 2045 target date.

"We're very proud of our 1.5C science-based target - which we were the third company in the world to announce - as well as our 2045 net zero target," she says. "So we're always thinking about how we can be ahead in this space, because we want to be a climate leader."

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