Impact Investing in the Telecommunications Sector
This telecommunications sector profile sector covers the operation and maintenance of telecoms infrastructure, including:
Fixed line communications and wireless voice and transmission infrastructure (e.g. terrestrial and submarine cables).
Television and radio broadcasting systems.
Key environmental and social aspects
Management commitment, capacity and track record (CCTR)
Companies need management’s commitment and sufficient capacity to ensure that the necessary resources are available to appropriately implement and maintain E&S management. Refer to CDC guidance: Assessing companies’ commitment, capacity and track record.
Environmental and social management system (ESMS)
Companies should develop and implement an ESMS commensurate with the level of risks and impacts associated with its activities. For further advice refer to CE&S topic: Environmental and social management systems (company-level).
Note – Occupational, health and safety is covered separately below.
Companies shall operate in accordance with applicable labour laws and regulations and ILO Fundamental Conventions. Please refer to E&S topic: Labour standards.
Occupational, Health and Safety (OHS)
Risks for the business
Companies may face prosecution or fines (or have their licences revoked in extreme cases) if workers or contractors are injured or killed.
Damage to/loss of the company’s assets with potentially costly transmission outages.
Increased insurance premiums and potential legal claims can result from poor OHS practices.
Low workforce morale and erosion of trust or industrial action as a result of poor practices can lead to higher staff turnover, additional training and recruiting costs and reputational damage.
Use of security forces can present a risk for workers and local communities if security personnel are not carefully selected, trained and monitored. This can affect the company’s operations and reputation.
Opportunities for the business
Proactively involving workers and contractors in key decisions can help to identify and maintain good OHS practices and improve their acceptance if new or significantly different to previous practices.
Quality of service can be improved and insurance premiums for workers’ and compensation payments reduced.
OHS is an important consideration for any business, regardless of sector. All companies must have in place appropriate OHS and emergency preparedness and response management systems, commensurate with level of risks.
If contractors are involved in operation and maintenance activities, companies should implement measures to ensure contractors work in accordance with applicable regulations and Good International Industry Practice (GIIP). Such measures should be covered in companies’ OHS and emergency preparedness and response management systems.
Specific OHS risks in the telecommunications sector can include:
Physical hazards (e.g. elevated and overhead work during assembly of towers or installation of antennae, work in confined spaces for underground fixed line installation, falls from height and motor vehicle safety).
Electrocution (e.g. exposure to live power lines/sources during maintenance and operation activities).
Exposure to electromagnetic fields (EMF) (e.g. working close to transmitting antennae emitting radio waves and microwaves).
Exposure to noise (e.g. from backup power generators).
Exposure to optical hazards (e.g. risk of permanent eye damage due to exposure to laser light during fibre optic cable connection activities,).
Travel and work in remote sites (e.g. where base stations are located in remote sites,lacking basic infrastructure, locations that may sometimes require significant travel by dangerous roads/means).
Fire risks (e.g. presence of flammable materials in high-powered laser installation areas).
Security (e.g. telecommunications infrastructure is often a strategic asset for a country and is protected in order to prevent sabotage and fuel theft (this can be a very high risk in some geographies). Measures should be implemented to ensure that security forces are appropriately trained in the use of force and to respect workers’ rights.
For further sector-specific guidance refer to the World Bank Group EHS Guidelines for Telecommunications.
For further general guidance on GIIP relating to OHS, refer to E&S topic: Occupational health and safety, IFC Performance Standard 2: Labor and Working Conditions, World Bank Group General EHS Guidelines and CDC Good Practice: Preventing Fatalities and Serious Accidents.
Resource efficiency and pollution prevention
Risks for the business
Fines and penalties can be imposed for non-compliance with national pollution prevention standards, especially for hazardous materials/waste management and air emissions.
Excessive expenditure on energy supply.
Excessive expenditure on management of solid waste.
Opportunities for the business
Lower operating costs, reduced environmental footprint and better preparedness for resource shortages or increased price of resources can result from the implementation of good practice design of telecoms facilities and through the adoption of energy efficiency measures and or the installation of renewal energy (e.g. solar photovoltaic panels).
The introduction of remote control systems for fuel consumption can help to monitor and optimise energy consumption and also identify oil theft at communication towers (as towers are numerous and wide spread, it is not always possible to have 24/7 security at each tower).
In some instances, telecommunications companies can investigate take back/reuse/recycling programs for consumer equipment such as cellphones and their batteries.
Energy efficiency: Where possible companies should seek to introduce energy efficiency measures as they can substantially reduce operating costs. Through improved net energy conservation ratio (i.e. energy output per unit of energy/fuel input). This can also help to future proof companies against increasing stringent global air emission regulations.
When evaluating the design, financing and operation of telecoms facilities companies should seek to explore the business opportunities that arise from the use of cleaner technologies and the adoption of energy efficiency measures as a means to reduce operating costs and anticipate regulatory changes.
There are increasing opportunities to use renewable energy in the telecoms sector, particularly through the installation of solar photovoltaic panels in telecommunication towers. Using solar photovoltaic panels not only reduces GHG emissions, it also reduces the need to transport fuel to remote areas, so reducing the risk of spills, fire and theft (of oil or diesel). However some precautions may need to be taken to prevent the theft of solar panels.
Air emissions: The primary sources of air emissions in the telecommunications sector are the exhaust fumes from vehicle fleets and power generation where diesel generators are used. Telecommunications companies should ensure that any new equipment purchased meets international phase-out requirements for hazardous emissions, and that the disposal of existing equipment is in line with the good practice outlined below.
Waste management: The telecommunications sector does not directly generate significant waste material. However, the batteries from power generation and electronic processes as well as waste oils and the components of irreparable transformers and cooling equipment, which are by-products of the sector, are hazardous waste and require careful handling.
Companies must ensure that even small volumes of potentially hazardous waste (e.g. used oil, circuit boards etc.) are stored, handled, transported and disposed of according to GIIP and in a manner that prevents environmental contamination or danger to workers or nearby communities. Telecommunications companies should investigate introducing take back/reuse/recycling programs for consumer equipment such as cellphones and their batteries.
For further sector-specific guidance, refer to the World Bank Group EHS Guidelines for Telecommunications.
For further general guidance on GIIP relating to resource efficiency and pollution prevention, refer to E&S topic: Resource efficiency, E&S topic: Pollution prevention, IFC Performance Standard 3: Resource Efficiency and Pollution Prevention, and World Bank Group General EHS Guidelines.
Community health, safety and security
Risks for the business
Social license to operate can be put at risk if social impacts and/or community relations are not well managed, particularly regarding information around the perceived health impacts of electric and magnetic fields or around the visual impacts of cellphone towers and noise from backup generators.
Reputational damage and significant management costs can be incurred to address social opposition and criticism from perceived risks.
Inadequate use of security forces could trigger social tensions, which could significantly impact a company’s reputation and operations.
Opportunities for the business
Engaging with the community and addressing community impacts at the initial design phase and in the siting and management of telecommunications services can help ensure long term successful operation of the facility including protection of infrastructure.
Emergency preparedness and response: Companies must implement emergency preparedness and response systems to respond to accidental and emergency situations associated with the company’s activities in a manner appropriate to prevent and mitigate any harm to people and/or the environment. Companies should develop these systems in collaboration with appropriate and relevant third parties (e.g. local authorities).
Health: Risks of exposure to electromagnetic fields raise the most high-profile public concern in the telecoms sector in terms of the potential health effects. Telecommunications companies should follow the results of emerging authoritative research results with regard to health effects and adopt a preventive and risk minimisation strategy (see World Health Organization). Community consultations should be undertaken to agree antenna towers sites and good engineering practice should be used for the installation of directional links.
Safety: Masts and towers and associated power supplies should be secured to prevent public access and illegal power connections. Fences, signs and security guards can be used to ensure that sites are secure. Mast design should incorporate anti climbing devices and follow GIIP. Mast design should also consider potential natural hazards and proximity to airports and flight paths. Refer to the standards recommended for steel antennae towers by the Telecommunications Industry Association.
Security: Telecommunications infrastructure often needs to be protected to prevent illegal power connections, the theft of components/fuel and of sabotage or access by external parties for safety reasons. Companies should be guided by principles of proportionality and good international practice in relation to hiring, rules of conduct, training, equipping, and monitoring of any workers and by applicable law. These practices are consistent with the standards and principles set out in the general guidance documents referenced throughout this document.
Noise: Back-up power generators are a source of noise for surrounding communities. Telecommunications service providers should seek to ensure that design and operation of base stations will minimise noise by the careful positioning of generators (e.g. away from residential areas) and through the deployment of noise suppression shields.
For further sector-specific guidance, refer to the World Bank Group EHS Guidelines for Telecommunications.
For further general guidance on GIIP relating to community health, safety and security, refer to E&S topic: Community health, safety and security, IFC Performance Standard 4: Community Health, Safety and Security, UN Code of Conduct for Law Enforcement Officials, UN Basic Principles on the Use of Force and Firearms by Law Enforcement Officials and Voluntary Principles on Security and Human Rights.
Land access, use and acquisition
Telecommunication towers typically require the acquisition of small (but sometimes numerous) plots of land (mainly for tower installation and also for associated facilities such as access roads. Telecommunication towers are often regarded as critical national infrastructure (CNI). Therefore an expropriation process could be triggered, though usually companies and governments will seek to negotiate with affected communities before triggering an expropriation process.
For further general guidance on GIIP relating to land access, use and acquisition refer to CDC Project Design and Construction Guide and E&S topic: Land acquisition and involuntary resettlement and IFC Performance Standards 5: Land Acquisition and Involuntary Resettlement.
Business integrity considerations
The telecommunications industry is particularly vulnerable to corruption because of its complex governance structures and the significant interaction between public and private entities. Licensing processes, regulation and price setting are areas which are particularly prone to corruption. Conflicts of interest and hidden ownership by government officials are also known risks in the sector.
Petty corruption in customer services is also an identified risk and the sector is also subject to increased scrutiny regarding potential data security risks.
Companies should have strong systems in place for managing engagement with government officials and customers. These systems should also be independently audited.
For further guidance please refer to Transparency International – Overview of corruption in the telecoms sector.