Category: 5G FIVG

ESG Investing and 5G ETFs – an unlikely partnership?

The 5G rollout has begun, and is set to bring unrivaled connectivity at unprecedented speeds. By 2022, networks are expected to support 26 billion devices and connections worldwide, an increase of about 10 billion from 2015.[1] However, this success comes with a price – researchers have estimated that by the end of 2020, information and communications technology will account for 3.5% of annual global carbon emissions, a larger share than the shipping and aviation industries.[2] With climate change as one of the greatest challenges of our time, the carbon footprint of this technology revolution is a question that industry and businesses cannot ignore.

The good news for ESG investing is that 5G sector companies are taking this challenge seriously. This means that socially-responsible investors need not rule out 5G ETFs as a way to back and capitalize on sustainable ventures.

5G sector companies are taking two major approaches to promoting sustainability: 1) reducing the carbon footprint of the 5G technology itself and 2) championing the use of 5G use-cases to combat waste and promote a greener, more sustainable future.

In the first category, Verizon announced its intention to “achieve carbon neutrality for [its] 5G network and supply chain by 2025”[3] and AT&T declared its goal of enabling a carbon saving that is ten times its operational footprint by the same year.[4] Huawei and others have shown how data analysis and artificial intelligence can be applied to 5G network management to produce significant energy savings. For example, unlike 4G base stations, 5G ones have a sleep mode which allows them to operate using much less energy in off-peak periods. Smart and alternative cooling methods for data centers could also save millions of kilowatt hours (kWhs) of energy consumption.[5]

In the second category, 5G providers are partnering with business and industry to champion climate-conscious, energy-efficient solutions to some of the greatest environmental challenges of our time. Sustainable and disruptive technologies could work together for example, to reduce global emissions by up to 15% by 2030.[6] 5G’s facilitation of the Internet of Things (IoT), connecting millions of sensors, could enable the efficient functioning of smart cities [link to 5G and smart cities] and enhance smart farming [link to DIET 2020 outlook] to reach even higher levels of sustainability. 

Agriculture accounts for around 80% of national water consumption,[7] yet over 40% of fruits and vegetables produced for our consumption are lost or wasted.[8] Technologies already exist that monitor water requirements and usage in fields, and coordinate harvesting and delivery of food to ensure minimal wastage. But when combined with the enhanced connectivity of sensors and actors in a 5G network, they could be even more efficient and effective at tackling land efficiency and food scarcity, some of the greatest challenges to human development.

In the smart cities of tomorrow, 5G’s projected 4.1 billion global cellular IoT connections by 2024[9] will enable mass connectivity between sensors and could propel urban areas to a greener, cleaner future. Smart signals for example, could communicate directly with traffic to prioritize public transport and respond to changing traffic patterns before congestion even builds up.[10] Municipal buildings, street lighting and waste removal could be managed and optimized for environmental sustainability. As millions of sensors are integrated into regular people’s daily lives, particularly in metropolitan areas, the democratization of data could empower each and every citizen to make better, greener choices.

With this correlation of technologies and cooperation between different sectors, ESG and 5G investing priorities have never been more aligned.

 

[1] “Can 5G Save the Planet?” The Atlantic, 2019. https://www.theatlantic.com/sponsored/huawei-2019/can-5g-save-planet/3184/

[2] “Assessing ICT global emissions footprint: Trends to 2040 & recommendations,” Lotfi Belkhir, Ahmed Elmeligi, Journal of Cleaner Production, January 2, 2018. http://www.electronicsilentspring.com/wp-content/uploads/2015/02/ICT-Global-Emissions-Footprint-Online-version.pdf

[3] “Verizon’s 5G network – doing our part for a sustainable future,” Jim Gowen, Verizon, October 24, 2019. https://www.verizon.com/about/news/verizon-5g-sustainable-future-jim-gowen

[4] “How can 5G & IoT enable exponential climate action?” Bhushan Joshi, April 29, 2019. https://www.ericsson.com/en/blog/2019/4/brighter-futures-5g-climate-action

[5] “Can 5G Save the Planet?” The Atlantic, 2019. https://www.theatlantic.com/sponsored/huawei-2019/can-5g-save-planet/3184/

[6] “Proceedings of EnviroInfo and ICT for Sustainability 2015,” Jens Malmodin, Pernilla Bergmark, September 2015. https://www.atlantis-press.com/proceedings/ict4s-env-15/25836149

[7] “Irrigation and Water Use,” United States Department of Agriculture, Economic Research Service. https://www.ers.usda.gov/topics/farm-practices-management/irrigation-water-use/

[8] “SAVE FOOD: Global Initiative on Food Loss and Waste Reduction,” Food and Agriculture Organization of the United Nations. http://www.fao.org/save-food/resources/en/

[9] “The Ericsson Mobility Report.” https://www.ericsson.com/en/mobility-report

[10] “How The 5G Era Could Help Build A More Sustainable Future,” Oct 21, 2019. https://www.forbes.com/sites/tmobile/2019/10/21/how-the-5g-era-could-help-build-a-more-sustainable-future/#4afb896c664f

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