Singapore Telecommunications (Singtel) Z74 is one of the best proxies to the decarbonisation theme among other telco players in the region, according to the coverage of RHB’s regional thematics report titled “Telecommunications: The Road to Net Zero”.
The report focuses on documenting the progress made by the telcos towards attaining net zero emissions (NZE), a state where the removal of carbon equals its introduction to the atmosphere.
Across the region, Singapore telcos were among the pioneers in the development of a sustainability roadmap, with independent sustainability reports published as far back as 2011.
The analysts note that Singtel was the only Southeast Asian company among a pioneering group of 28 global companies that had committed to new and more aggressive climate targets in July 2019 in keeping with global temperature increases within 1.5c and reaching NZE by no later than 2050.
2023 marks the ninth year Singtel published its Group Sustainability Report. Aside from reviewing its energy and emissions reduction roadmaps and continuing with its energy efficiency programmes, Singtel also brought forward its NZE target to 2045 from 2050.
Singtel’s sustainability initiatives are embedded across its wholly owned subsidiaries NCS and Optus, which have their own sustainability frameworks. The group’s five year sustainability targets incorporate plans to cut Scope 1-2 emissions by 25% by 2025 and 42% by 2030 against a 2015 baseline. The target for Scope 3 emissions is for a 30% reduction by 2030 vs the 2015 baseline.
In FY2023, Singtel’s total absolute emissions (Scope 1-2) fell 11.3% y-o-y to 438,957 tonnes of carbon dioxide equivalent (tCO2e) or a 20% reduction versus the 2015 baseline. This was in line with the 2025 target of a 25% reduction.
The rollout of the 5G network in Singapore with island-wide connectivity contributed to a marginal 0.18% uptick in electricity consumption, supported by energy efficiency initiatives and lower floor space utilisation from the use of a hybrid working model.
Overall, Singtel’s proportion of energy usage from renewables widened to 7.28% in FY2023 from 5.74% in the preceding financial year.
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For Scope 3 emissions — which account for more than 80% of Singtel’s total emissions — FY2023 marked the second consecutive year of full assessment for the company, with a 56.2% y-o-y reduction in emissions registered to 3,568,342 tCO2e.
“Singtel scores highly for having the most comprehensive greenhouse gas (GHG) disclosures, with Scope 3 emissions assessed in full for a second year running,” RHB says. The analysts have a “buy” call on Singtel with a target price of $3.20.
Meanwhile, the decarbonation goals of StarHub CC3 will see attempts to cut Scope 1 and Scope 2 emissions by 50% and Scope 3 by 25% by 2030 against a 2021 baseline. The company’s inaugural quantitative climate change scenario analysis and new carbonisation goals entails a target for NZE by 2050 as well as a new target for its data centres to achieve the Green Mark Certification thresholds in 2024-2026.
That said, the company’s overall GHG emissions across all scopes were relatively flat in FY2022 as lower Scope 1 and Scope 2 emissions were offset by higher Scope 3 emissions, the analysts note.
They highlight that StarHub’s DARE+ initiative is directly and indirectly accelerating the company’s overall sustainability efforts with 5G and related enterprise solutions spearheading environmental outcomes.
StarHub has also launched Green Tech Solutions in FY2023 to help businesses adopt a comprehensive suite of end-to-end sustainability-managed services that will concurrently drive productivity growth as well as positively impact the environment and its customers.
RHB has a “neutral” call on StarHub with a target price of $1.15.
