Telkom Integrated Annual Report 2017

Natural capital

Telkom’s natural capital management is guided by our sustainability strategy, environmental policy statement and climate change policy statement.

Climate change

The UN Climate Change Conference (COP22) saw increased global commitment to implementation and action on climate change. South Africa is one of 111 countries that share in this commitment through ratification of the Paris agreement (UN Framework Convention on Climate Change). This deals with greenhouse gases emissions mitigation, adaptation and finance, starting in the year 2020, as well as submission of its national emissions reduction targets (nationally determined contributions).

Telkom realises the vital role business has to play in supporting South Africa to reach its goals. The impending carbon tax forms part of this international commitment. While our operations are not significant emitters, there are complexities to the tax that have the potential to impact us directly or through our value chain. Emissions mitigation efforts take time to be implemented and, therefore, we need to be proactive in implementing without undue delay.

Telkom expanded its reporting scope to include BCX and Trudon, and refined its calculation methodology to include more actual data, for example, invoice-based, and assumptions based on actual data.

The total carbon footprint of the group is depicted below. Prior year data is only available for Telkom and BCX. It is therefore necessary to prioritise meaningful measurement, monitoring and reporting. Scope 3 data is not included in this year’s report, however, a value chain assessment will be undertaken in the next year to determine material indicators.

 

As part of our commitment to managing our carbon emissions and contributing to the global knowledge base, Telkom continues to participate in the Carbon Disclosure Project (CDP).

 

KPI			Telkom			BCX			Trudon*			Telkom group
Scope 1 (tCO2e)
Refrigerants			23 715.69			338.25			*			24 053.94
Fleet			22 900.83			168.27			7.61			23 076.71
Diesel			7 750.02			81.33			*			7 831.34
Total scope 1			54 366.54			587.85			7.61			54 961.99
Scope 2 (MW)
Electricity			596 677.82			28 482.52			287.34			625 447.67
Total scope 2			596 677.82			28 482.52			287.34			625 447.67
FY2017 total carbon footprint (tCO2e)			651 044.36			29 070.36			294.94			680 409.66
FY2016 total carbon footprint (tCO2e)			714 204.59			30 643.54			*			744 848.12
% change year-on-year			(9)			(5)			*			(9)

*	Limited data available for Trudon.

Due to the size and nature of its operations, Telkom is the primary contributor to carbon emissions, of which the most significant source is electricity consumption. Telkom company’s total carbon footprint for owned buildings (651 044.36 tCO₂e) was externally assured. We use the carbon footprint analysis to inform the direction and scale of our initiatives to reduce our emissions.

The 9 percent decrease in carbon emissions from the prior year is primarily attributed to:

• the implementation of 50 smart meters to measure electricity consumption in key buildings, which resulted in more accurate and reliable data, and improved calculation methodologies
• the rollout of the energy-efficient light-emitting diode (LED) lighting initiative which replaced conventional lighting systems in 900 buildings nationally, with sustainable lighting based on LED technology
• the implementation of a building management system at the Telkom campus. This automation system monitors and controls multiple facilities elements, including air conditioning, power distribution, lighting, and water usage. This results in more efficient operation of our buildings, and reduced energy and water consumption

As part of our commitment to managing our carbon emissions and contributing to the global knowledge base, Telkom continues to participate in the CDP.

This year we refined our calculation methodology to include assumptions based on actual data, and we included BCX and Trudon in the scope of reporting. Telkom’s water consumption data covers owned buildings and leased buildings where utilities are excluded from the lease agreement.

Water

The ongoing drought and water restrictions have demonstrated the impact water scarcity can have on South Africa. If prolonged, this had the potential to impact our business operations. While the group is not a water-intensive business – using water primarily for cooling, drinking, catering, hygiene and landscaping – it is a responsible citizen. Occupying in excess of 7 000 premises, our footprint is large and we need to manage our consumption. Water data is collected using municipal invoices, and is based on what is billed. This is a challenge, as municipal billing is often based on estimates and, in some cases, only a rand value is provided. However, this year we refined our calculation methodology to include assumptions based on actual data, and we included BCX and Trudon in the scope of reporting. Telkom’s water consumption data covers owned buildings and leased buildings where utilities are excluded from the lease agreement. The total water consumption for Telkom company Tof 443 743 kℓ was externally assured. The flow restrictors resulted in an approximate 40 percent savings from a normal flow rate. In addition, implementation of air-cooled heating, ventilation and air conditioning (HVAC) systems in our campus data centres is underway. As the data centres require 24 hours a day, 365 days a year of cooling, converting to air-cooled HVAC technology will significantly reduce the amount of water used. The building management system improved the efficient use of water on campus.

Total water consumption for Telkom group is 1 496 905.91 kℓ.

 

Waste

Based on our operations, it is presumed that our most significant and environmentally impactful waste streams, both internally and within the value chain, are cabling (copper and fibre-optic) and e-waste (batteries and electronic equipment). It is our responsibility to mitigate the environmental impact of these waste streams through responsible management, re-use, recycling and disposal.

Telkom company’s cabling and e-waste is managed by Openserve supply chain management through a service provider responsible for reverse logistics. In this process, products no longer of use to Telkom company (such as out-of-service copper cabling, damaged fibre-optic cabling, ineffective payphones, and defective computers) are collected by distribution centres across the country and sent to a central hub.

Telkom’s cabling and e-waste (tonnes)

Waste stream			FY2017			FY2016
Copper			2 035			1 582
Optic fibre			398			228
Batteries			502			324
e-waste			202			471
Total (tonnes)			3 137			2 605

All e-waste is auctioned to various approved e-waste recycling companies based on their ability and expertise to responsibly dispose of these materials in line with legislation and best practice.

Cabling is sold to Sindawonye, a recycling company, where the cabling is processed using environmentally and socially responsible techniques (no chemicals or burning). Copper recovered from the recycling process is sold to local and international markets. Fibre-optic cables are recycled through the Thembani Eagle Hout Integrated Project. This sensitive, labour-intensive process provides employment and empowerment for an Eastern Cape rural community, with 22 families relying solely on this project as a source of income.

The higher demand for fibre in the last year increased the fibre-optic waste due to unusable scrap offcuts and damaged pieces.

FY2016 saw large quantities of computer equipment recycled due to the consolidation of facilities and employees to Telkom Centurion campus. This stabilised during FY2017 and, as a result, computer equipment e-waste decreased by 103 tonnes. In addition to this, there was a decrease of 83 tonnes in payphone e-waste from the prior year. As payphones have become obsolete and not replaced when scrapped, it is expected that payphone e-waste will reduce over time.

This year BCX began to quantify the number of units of e-waste disposed. This included PCs, laptops, screens, printers and general e-waste; printers making up the majority of the total 5 878 units disposed.

Telkom group’s additional solid waste streams include municipal waste, garden refuse, and paper. Telkom, through its facilities service provider, measured a limited portion of these additional solid waste streams. However, Telkom has a “no bin at desk” policy, which encourages the use of the recycling areas provided.

Paper-saving copiers with a printing time limit were installed to reduce excessive printing, and thereby paper wastage. BCX’s total landfill waste decreased by 19 percent, and total recycled waste increased by 68 percent. A significant portion of the recycled waste was paper due to the move of office premises.

Outlook

Our primary focus for FY2018 is to refine our sustainability strategy to be inclusive of our subsidiaries and aligned to our future outlook. An integrated management approach will be developed to move the group beyond compliance, to embedding sustainability to maximise value.

Telkom will undertake a value chain assessment to understand our material impacts on natural capital upstream and downstream of our activities. The initial focus will be on solid waste streams and carbon emissions (Scope 3).

BCX is moving to more environmentally responsible offices in 2018. The building design has been rated four stars by the Green Building Council of South Africa.

Climate change
PV project is complete and adds value to our business, and we are investigating the following initiatives to further reduce our energy consumption and, therefore, our emissions and costs:

• The implementation of an EMS based on ISO 50001
• An energy audit at Telkom campus to determine an energy baseline, and identify high-energy-consuming equipment and wasteful use
• The development of a 3MW trigeneration (gas) plant at our campus to supplement the required base load and reduce our dependence on the national power grid
• Based on the performance of the current electricity meters, we will look to increase the number of metered sites, improving accuracy and reliability of data
• We will continue to roll-out energy-efficient LED lighting, smart lighting and climate control initiatives to more sites
• The sustainable power to strategic sites initiative will install solar/PV systems at other Telkom strategic sites
• At the Telkom head office campus we will offer employees and visitors the use of six electric vehicle charging points, connected to the solar/PV plant, at no cost

Water
Proof of concept was completed at 15 of our sites to install smart water meters. As a result, we will be able to verify municipal bills, benchmark facilities’ water usage, and more effectively manage our water. Other sustainable water management initiatives that will be investigated during the next year include rain water harvesting and water recycling (use of grey water).

Waste
During FY2018, integration and standardisation of waste management will be considered.