Telkom continues to focus on energy efficiency and provision of alternative energy supply, while decarbonising and optimising our diesel cost.
We submitted our near-term and net zero science‑based targets for validation and approval as part of our commitment to combating climate change and reducing our carbon footprint.
Environmental processes and procedures are in place to ensure compliance with regulatory requirements. We monitor compliance with environmental statutes and by-laws through site inspections, audits and regular reviews of our procedures and operations. There were no regulatory changes that impacted our operations in FY2024.
One Section 30 National Environmental Management Act, 107 of 1998 (NEMA) incident was reported. This involved diesel spillage at Telkom’s Wesselsbron Electronics and Telecommunications Equipment (ETE) site in the Free State. The incident triggered the reportable threshold as per NEMA guidelines. It was reported to the relevant authorities and regulators within the stipulated timeframe, and mitigation measures were implemented.
We complied with the requirements for energy performance certificates by certifying Telkom buildings that triggered the 2 000 m2 threshold. This is the requirement in terms of the Energy Performance Regulations No 43972 of 2020 under the National Energy Act, 34 of 1998, which benchmarks the energy performance of certain buildings.
The Department of Environmental Affairs promulgated the phasing out of ozone-depleting substances in 2014. The regulation outlines 2020, 2025 and 2030 requirements for phasing out and managing these substances. From 2016 (baseline year) to date, we reduced our R22 refrigerant gases from 97 tonnes to 33.7 tonnes (FY2023: 36 tonnes) by decommissioning various Telkom sites and replacing HVAC units that exceeded the expected commercial life cycle by 30%. To comply with the year 2025 legislative target of 31.5 tonnes, Telkom must reduce its R22 gases by a further 2.2 tonnes.
Telkom has developed an energy strategy to focus on crucial asset classes where business interruption (including loadshedding) would significantly impact contractual obligations and customer experience. This will optimise diesel usage and cost, provide energy security and assist in meeting decarbonisation targets.
The strategy prioritises technologies that maximise energy security and decarbonisation and optimises utilities. These technologies include:
The new energy landscape aims to address energy security and decarbonisation, where:
Telkom has been aggressively installing solar and lithium-ion batteries in some key sites, decommissioning legacy equipment and implementing various energy efficiency initiatives for energy resilience and diesel optimisation. As a result, diesel consumption for FY2024 decreased by 15% and energy consumption decreased by 4%. In addition, Telkom’s total emissions (Scope 1 and Scope 2) for FY2024 reduced by 9%.
These initiatives are ongoing. However, there are some limitations or constraints such as roof space available for solar installation, capex constraints, theft and vandalism.
Scope 1 emissions relate to fossil fuel consumed by the vehicle fleet, backup diesel generators and replacement of air conditioning gases. Scope 1 represents approximately 12% of Telkom’s total carbon footprint.
Scope 2 emissions relate to the energy consumed from the national grid. In South Africa, the national utility has a high grid emissions factor due to its reliance on coal-fired power generation technology. Scope 2 represents 88% of Telkom’s carbon footprint.
Scope 3 emissions relate to indirect upstream and downstream emissions of an organisation’s value chain that have not been accounted for in Scope 1 and 2. Scope 3 emissions comprise 15 categories, including purchased goods and services, capital goods, and use of sold products.
Eskom grid factor refers to figures calculated based on total electricity sales by Eskom as published in its integrated annual report. Telkom calculates its Scope 2 emissions by converting its energy consumption in kWh to tCO2e emissions.
Telkom’s ambition is to be carbon neutral by 2035 and net zero by 2040. Aligned with this, Telkom has committed to setting science-based targets to reduce its carbon footprint. We have submitted our near-term and net zero science-based targets to the Science Based Targets initiative (SBTi) for validation and approval.
Our Scope 1 emissions decreased by 22% due to ongoing diesel optimisation projects (lithium‑ion battery installations) that reduced our diesel usage by 15% in FY2024. Our Scope 2 emissions decreased by 8% because of account terminations and re-billings through cost optimisation initiatives where anomalies and disputes are logged with municipalities and Eskom. The decrease in the grid emission factor from 1.04 to 1.00 in FY2024 also contributed to our Scope 2 emissions reduction.
Reduce carbon emissions:
Carbon neutral by 2035 and net zero by 2040
Aligned with the science-based targets near-term and net zero goals, Telkom has to reduce its annual carbon dioxide emissions at a 4.2% (29 429 tCO2e) linear annual reduction rate (LARR).
In FY2024, we reduced our emissions by 65 699 tonnes of carbon dioxide equivalent emissions. This represented a 9% reduction in Scope 1 and 2 emissions, exceeding the 4.2% LARR per SBTi requirements.
As industry discipline around ESG reporting gains momentum, Telkom is committed to ensuring rigour in our internal processes and governance. We are taking additional measures to triangulate our consumption data by incorporating various approaches for the calculations, such as:
Telkom has refined its Scope 3 calculation methodology with the use of a carbon accounting platform that considers both local and international standards. As such, we have restated our FY2022 baseline emissions. Cognisant of the complexities associated with Scope 3 emissions, we will keep improving our methodology as we evolve, while adhering to the requirements of the SBTi.
We acknowledge the necessity to engage our suppliers as part of our journey to reduce Telkom’s value chain emissions. In FY2024, we sought to set a Scope 3 target for the Group, which we have done and submitted to the SBTi for validation. As part of our FY2025 plans, we have solicited advisory services to assist with developing our pathway to net zero. Further, we aim to assure our Scope 3 emissions in FY2025.
Although we are not a material water user, we recognise the risks associated with water shortages, particularly to employees and the economy. The Group uses water primarily for cooling, drinking, catering, hygiene and landscaping. Telkom’s main source of water is municipal supply.
Telkom’s water consumption decreased by 16% to 777 722 kL A. This was mainly due to site terminations and ongoing site monitoring, resulting in water leakages being repaired and accounts corrected. We also installed smart water meters at 52 sites and commissioned the meters on an IoT platform at 46 sites.
Water management is part of our ESG strategy, and we are committed to a 50% reduction in water usage by 2030.
The following water-saving initiatives will enable Telkom to reduce water consumption in future years:
Telkom’s largest source of hazardous waste is used electronic equipment (e-waste). Telkom continued to focus on reducing e-waste by implementing practices to reuse, resell or recycle network waste and other waste generated by our operations. We increased our e-waste recycling from 5 427 tonnes in FY2023 to 6 458 tonnes in FY2024. This was mainly due to ongoing decommissioning of legacy equipment.
E-waste is a source of income for waste collectors and handlers. We sell our cabling to a leading e-waste recycling organisation, which processes the cabling using environmentally and socially responsible techniques that do not use chemicals or burning. This sensitive, labour-intensive process provides employment and empowerment for an Eastern Cape rural community through our Thembani project. 22 families rely on this project as their sole source of income. We sell copper recovered from the recycling process on local and international markets.
Telkom Consumer launched a Device Trade-in Programme in November 2022, initially partnering with iPhone and Samsung. The programme promotes sustainable reuse and recycling of technological devices. Refurbishing a device increases its lifespan, enabling more users to benefit from the same device over an extended time.
The Trade-in Programme started slowly in FY2023, as it was temporarily put on hold internally, even though customers could still trade in directly with handset manufacturers. Efforts are now under way to revitalise the programme by enhancing the system. One challenge identified was the economic climate and customers’ reluctance to trade in, opting instead to hand down devices. While there was no specific recycling campaign in the mobile space, the focus was on reuse.
This involved educating customers about repair warranties and extended warranties on certain OEM devices. In addition, other handset manufacturers offer repair "specials" for screen damage.
A External moderate assurance on selected sustainability indicators. Please refer to the FY2024 Independent Assurance Report available online.
Gyro successfully implemented the first phase of the next-gen property management strategy. This aggregated Gyro’s smart devices or IoT devices onto an IoT platform for efficient management and monitoring of facilities. The implementation of the digital infrastructure layer was a crucial component of this technology solution and architecture. It enables preventative and reactive maintenance and efficient facility management. Despite some challenges faced in executing the project, the project phase was completed.
Gyro successfully onboarded over 50 000 devices and tags across 54 sites and 297 utility meters for top-consuming sites, meeting the initial targets for the acquisition and implementation of the Gyro Digital Platform solution. The migration of existing devices monitored by third parties was also successfully completed.
This strategy will allow Gyro to proactively manage its facilities, make informed property facilities management decisions and have control of data and the insights generated from monitoring devices, resulting in cost benefits derived from digital monitoring. Furthermore, this will lead to a revenue-generating model utilising next‑generation capabilities.
The next phase of the project will include operationalisation, integration with other key systems, and possible extension to other sites. This will enable further enhancements to facilities management capabilities, including upgrades to core applications, analytics and business intelligence, security and information security, finance, accounting, billing, integration, and infrastructure.
We will continue with our energy efficiency project, renewable energy projects and lithium-ion battery installations at our sites. LED lighting retrofits at additional sites will also continue in FY2025. These initiatives will improve our energy security and decarbonisation and optimise utility and diesel costs.
We will also complete our water conservation initiatives at Telkom Park and sites in the Eastern Cape Nelson Mandela Region.
Telkom recognises the urgent need for proactive action in response to climate change. This recognition is underscored by global agreements like the Paris Agreement, which sets ambitious targets to limit global warming to 1.5°C.
Climate change affects our operations in various ways. For example, our infrastructure is vulnerable to extreme weather events, and the availability of resources such as water is essential for our network operations.
As part of our commitment to climate action, we are actively working to reduce our emissions, increase energy efficiency, and integrate renewable energy sources into our operations. We are also exploring innovative solutions to adapt to the impacts of climate change and build resilience in our infrastructure and supply chains.
| 1 | Task Force on Climate-related Financial Disclosures. |
| 2 | https://group.telkom.co.za/ir/apps_static/ir/pdf/policy_statements/Climate_Change_Policy_Statement.pdf |
| 3 | https://group.telkom.co.za/ir/apps_static/ir/pdf/policy_statements/Environmental_Policy_Statement.pdf |
Telkom acknowledges the pressing need to address climate change within its operations and has established a robust governance structure to effectively manage climate-related risks and opportunities.
The Board holds ultimate responsibility for overseeing risk and compliance, including climate-related issues, across the Group. Since FY2022, climate change has been a standing agenda item, demonstrating the Board’s commitment to addressing this critical issue. The Board has delegated the responsibility for climate change to the Social and Ethics and Audit and Risk Committees (where applicable). The Board receives regular updates and recommendations from these Committees to ensure informed decision‑making.
Telkom’s ESG strategy and energy strategy incorporate ambitious environmental objectives, aiming for carbon neutrality by 2035 and net zero emissions by 2040. These targets are integrated into Telkom’s overall strategy and are regularly reviewed by the Board and the relevant Committees.
The Social and Ethics and Audit and Risk Committees play key roles in evaluating the Group’s progress toward these goals and advising on necessary adjustments to the strategy and operations. The Board and its Committees are tasked with embedding climate-related considerations into Telkom’s core operations. This includes aligning performance objectives, risk management policies, annual budgets, and business plans with the goal of achieving carbon neutrality by 2035 and net zero emissions by 2040.
The Board ensures that climate-related risks and opportunities are adequately addressed at all levels of the Group through regular monitoring and evaluation. The Exco actively governs and supports climate change initiatives within Telkom through regular engagement and discussions.
Progress and implementation of these initiatives are closely monitored through various channels, including quarterly ESG Council meetings, Exco meetings and Board meetings.
Acknowledging the importance of disaster preparedness, Telkom has approved an annual disaster budget to address extreme circumstances, including climate-related disasters. Additionally, the Board has the authority to increase the disaster budget if unforeseen events exceed the allocated resources, ensuring the Group’s resilience in the face of climate-related challenges.
Telkom is well equipped to navigate the complexities of climate change and contribute to a more sustainable future through:
Our purpose is to seamlessly connect our customers to a better life. Therefore, our risk identification process considers climate change impacts such as changing rainfall patterns and increasing temperatures (resulting in heat stress). These could negatively affect our service delivery capabilities and customer experience.
We are considering the effect of climate-related risks and opportunities on our products and services in the short term. We did not perform a scenario analysis in FY2024 due to budget constraints, as originally planned. We intend to do this in FY2025, which may extend our considerations into the medium and long term.
Telkom has identified the following key climate-related risks and opportunities:
Sustainable cost management, including enhancing operational efficiencies through energy-efficiency initiatives, is a key strategic objective. Therefore, we appointed an energy expert to develop and implement an energy management strategy. We also invested (and continue to invest) in various energy-efficiency projects. The online real-time energy consumption monitoring is progressing, with smart meters installed at 743 sites.
An example of a climate-related influence on our products and services is our response to network backlogs created during the winter rainy season in the Western Cape.
Telkom relocates employees from unaffected regions to the Western Cape in winter to service network faults caused by prolonged rainfall and assist with the higher workload. If the affected regions still cannot cope, service providers and Openserve technicians are allocated from other unaffected regions to assist.
The additional support employees are paid relocation stipends for the inconvenience of working away from home. These additional costs are already built into the operational expenditure for the backlog plan.
Risks associated with climate change are integrated into Telkom’s risk identification and management processes and assurance processes. The Group’s risk management approach is based on a Board-approved ERM methodology and philosophy to ensure adequate and effective risk management across the Group. Refer to Managing risks and compliance for more insight into ERM processes, accountabilities, and emerging and strategic risks. Regulatory, reputational and physical risks are identified and assessed annually and are considered three to six years into the future. Our Group integrated assurance framework identifies, assesses, monitors and reports on the Group’s complex risks and opportunities.
Through our ERM processes and our Material matter determination process, the Board takes overall ownership of overseeing risk and ensuring compliance across the Group, with support from Group Exco and the Audit and Risk Committee.
Climate change, specifically extreme weather conditions, has been a material theme since FY2021. To protect our business and the environment, Telkom must mitigate and adapt to climate change impacts and responsibly use our resources.
Telkom manages climate-related risks and opportunities within the business functions where they are identified. However, all major climate-related risks have response plans that specify trigger thresholds (related to the severity of the impact) where higher levels of management should get involved. Our Group Emergency Management Team reports to the Group Exco and manages risks that significantly impact business-as-usual and the execution of Telkom’s strategy (i.e. the highest trigger threshold). The team’s mandate is to ensure continuity of service delivery through infrastructure, buildings, equipment, processes and human capital to guarantee the implementation and effectiveness of defined emergency management procedures.
We continued to strengthen Telkom’s ability to respond to disasters, including extreme weather events, as part of our journey to being a risk-intelligent Group. This included:
Telkom reports its carbon footprint according to the Greenhouse Gas Protocol. This is a global standard for developing an emissions inventory and carbon footprint. Refer to above for Telkom’s Scope 1 and Scope 2 emissions disclosure.
Climate-related risks and opportunities are part of our wider ESG performance. Our focus is on managing and reducing our negative environmental impacts and improving our organisational resilience. We use a variety of metrics to measure current and potential impacts, including greenhouse gas (GHG) emissions, energy consumption, water consumption and waste generation.
The Group’s carbon footprint has increased due to the disclosure of our Scope 3 emissions. Within our ESG strategy, we have developed a reasonable three-phase approach to determine appropriate climate change-related activities. In an effort to begin disclosing the Group’s Scope 3 GHG emissions in internal and external reporting, we completed the following:
Telkom will carry out a risk assessment to enhance our understanding of the transition risks and opportunities in FY2024.
| FY2024 Targets | Comments | |
| Scope 1 emissions |
Reduce Scope 1 and 2 emissions by 4.2% LARR | Aligned with SBTi ambitions. |
| Scope 2 emissions |
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| Scope 3 emissions |
– | No target was set for FY2024 as Telkom was recalculating the Group’s Scope 3 emissions and developing science-based targets. The Group will communicate its Scope 3 targets once approved by the SBTi. |
| Water consumption | – | Despite no actual target set for FY2024, we remain committed to responsible water consumption. This is evidenced by tangible results, including a 16% reduction in water consumption attributable to site monitoring initiatives. |
| E-waste recycled | E-waste recycling increased by 19% owing to ongoing decommissioning of legacy equipment. |
| Goal statement | Goal sub-statement | Progress in FY2024 | Priorities in FY2025 |
| Carbon neutral by 2035 |
100% reduction in Scope 1 and 2 emissions. |
The decrease in our Scope 1 emissions is attributable to ongoing diesel optimisation. The 8% decrease in Scope 2 emissions is mainly attributable to our cost optimisation initiatives (account terminations and re-billings). |
Diesel optimisation project: installation of lithium-ion batteries to optimise diesel usage. Solar PV installation in some of our sites. Legacy equipment decommissioning to reduce energy consumption in our exchanges. |
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Migration from fossil fuels to only comprise 50% of energy use by 2030. |
On-site solar rooftop installations are underway. Energy-efficiency measures reduce consumption. Redundant legacy equipment was decommissioned. |
Increased focus on solar PV and feasibility of alternative large-scale generation such as quad generation. Ongoing energy-efficiency initiatives to reduce our carbon footprint. |
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100% of energy use from renewable sources by 2035. |
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Migration from R22 refrigerant gases by 25% in 2025 and 100% by 2035. |
At year-end, there was 33.7 tonnes of R22 gas in the HVAC system. |
Plans are in place to further reduce R22 gas by 2.2 tonnes in FY2025 to comply with regulatory requirements. |
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| Net zero by 2040 |
Determine Scope 3 emissions from use of sold products. |
Appointed a third party to help develop a Scope 3 baseline, which was completed. |
Develop a target(s) for Scope 3 emissions. |
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Encourage recyclable and biodegradable materials. |
Developing a Group waste strategy that incorporates circular economy. |
Finalise the Group waste strategy. |
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75% reduction in waste to landfill by 2030. |
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50% reduction in potable water consumption by 2030. |
Identified water-saving initiatives, e.g. water harvesting and borehole drilling, and the business cases are in place. |
Implement water-saving initiatives as per the approved business cases. |
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Carbon offsets for unavoidable emissions. |
Long-term initiative, to be considered once Group assets are optimised and on-site opportunities are exhausted. |
Factored into long-term initiatives in the sustainability roadmap. |