London, 07 April 2020
Macquarie publishes new white paper: ‘The opportunity for telcos to act on climate’
Macquarie Group’s Specialised and Asset Finance Division (Macquarie), has published a new white paper highlighting that while the global telecoms industry currently accounts for only around 1.4 per cent of global greenhouse gas emissions, this figure could grow to around 14 per cent by 2040 – half the level of the entire transport sector1 if current trends in the mobile sector go unchecked.
According to Macquarie’s latest white paper, by harnessing the growing consumer concerns about climate change, forward-thinking telecoms operators have a significant opportunity to grow margins, increase customer loyalty and at the same time, reduce their potential environmental impact.
The paper asserts that if the telecoms industry is to reduce its carbon impact it will have to shift from the current single-use approach to mobile handsets, which is estimated to result in 43 per cent of old used phones being kept as spares2. Macquarie suggests that changing consumer attitudes should help firms develop contracts more in line with circular economy principles.
Research commissioned by Macquarie found clear consumer preference for handset financing models that require the return of the phone (e.g. subscription models), thus enabling higher rates of recycling. In a separate study McKinsey has also found that over 60 per cent of customers are prepared to pay a green premium of ten per cent for a demonstrably more sustainable electronic product.
George Power, Senior Vice President in Macquarie’s Specialised and Asset Finance Division says: “Environmental sustainability does not have to be at odds with good business sense, and ultimately can drive differentiation. The key to realising this opportunity, will be helping consumers make simple, environmentally positive decisions.”
“Fortunately, the telecoms industry has become skilled at combining services to deliver convenience and build loyalty. It can use these skills to create ‘green bundles’ across the device lifecycle that incentivise longer handset ownership periods to reduce resource use and which can ultimately result in a carbon-neutral footprint for the phone.”
“Macquarie is ideally placed to support this behavioural shift, thanks to our experience providing sustainable and smarter capital solutions, and with our core business model which is based on the return & re-use of devices, thus helping drive a circular economy.”
Macquarie’s Specialised and Asset Finance Division is part of Macquarie Group, which has invested or arranged over £4bn in green energy projects in FY2018/19. The Specialised and Asset Finance Division works with telecoms firms across the EMEA region to support this emerging market, providing capital markets capacity and in-depth sector specialism. Last year, this business invested in closed-loop mobile phone provider Raylo to support their growth.