Lightly Carbonated Telcos

Telcos seem to love saving the planet. Cynics might say that is because telcos use a fraction of the energy of heavy industry or the transport sector, and that being green generates the kind of good PR that telcos often struggle to get otherwise. Taking the reigns of the green bandwagon seems to have done James Murdoch no harm. The CEO of UK’s BSkyB, and offspring of media mega-tycoon Rupert Murdoch, now regularly gets a mention whenever journalists write about eco-friendly big business. Hanging out with Al Gore and the environmental lobby also seems to have helped his chances of taking over his dad’s empire. But even BSkyB could do more, as I pointed out over at the Greenbang blog.

Nevertheless, telcos now seem to be leading the way when it comes to carbon trading. When Australia’s new carbon trading exchange went live a few weeks ago, it was M2 Telecommunications that was first in line to buy some credits. Buying credits, of course, really means just paying an extra tax to reflect the cost of rectifying the damage done to the planet. So it is like paying for a new tree to be planted every time you emit as much carbon as the tree would absorb. Great idea. Everyone loves it. It is nice and simple. Yeah, right. Hold your horses. Just because ideas seem simple to the man in the street does not mean they are simple at all (that is why the man in the street gets angry when his phone bill is wrong). For a start, how much does it cost to plant a tree? I planted a tree in my back garden last year but I doubt my costs were the same as those incurred in a big plantation. Trading means you have a market, and that means prices can go up and go down. So if you can freely exchange permits you could make a profit by buying low and selling high, or alternatively you could waste a lot of money buying too many permits when they are expensive and finding you cannot sell the excess. So you got to love telcos for being first in line to buy carbon credits. But you also got to ask, given past indications that telcos excel at wasting money, who in the telcos is responsible for checking that they get value for money? My guess is that most of the people responsible for buying carbon credits will have objectives and experience in the field of marketing or health and safety, but not in finance or asset management. That makes it time for a new kind of assurance – one focused on optimizing the cost of carbon.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.