ifrs-s2-ibg-volume-59-telecommunication-services-part-b

Title: Volume 59—Telecommunication Services

Category: Part B—Industry-based Guidance for IFRS S2

Source: IFRS Foundation (https://www.ifrs.org)

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Year: 2023

Type: Industry

Industry-based Guidance on implementing

Climate-related Disclosures

Volume 59—Telecommunication Services

June 2023

IFRS S2

IFRS

® Sustainability Disclosure Standard

International Sustainability Standards Board

This Industry-based Guidance accompanies IFRS S2 Climate related Disclosures (published

June 2023; see separate booklet) and is issued by the International Sustainability

Standards Board (ISSB).

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IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023

Introduction

This volume is part of the Industry-based Guidance on Implementing IFRS S2 Climate-related

Disclosures. This guidance suggests possible ways to apply some of the disclosure requirements in

IFRS S2 but does not create additional requirements.

This volume suggests possible ways to identify, measure and disclose information about

climate-related risks and opportunities that are associated with particular business

models, economic activities and other common features that characterise participation in

this industry.

This industry-based guidance has been derived from Sustainability Accounting Standards

Board (SASB) Standards, which are maintained by the International Sustainability

Standards Board (ISSB). The metric codes used in SASB Standards have been included for

ease of reference. For additional context regarding the industry-based guidance contained

in this volume, including structure and terminology, application and illustrative

examples, refer to Section III of the Accompanying Guidance to IFRS S2.

IFRS S2 INDUSTRY-BASED GUIDANCE

Volume 59—Telecommunication Services

Industry Description

Telecommunication Services industry entities provide a range of services from wireless

and wireline telecommunications to cable and satellite services. The wireless services

segment provides direct communication through radio-based cellular networks and

operates and maintains the associated switching and transmission facilities. The wireline

segment provides local and long-distance voice communication via the Public Switched

Telephone Network. Wireline carriers also offer voice over internet protocol (VoIP)

telephone, television and broadband internet services over an expanding network of fibre

optic cables. Cable providers distribute television programming from cable networks to

subscribers. They typically also provide consumers with video services, high-speed

internet service and VoIP. Traditionally, these services are bundled into packages that

charge subscribers a single payment. Satellite entities distribute TV programming

through broadcasting satellites orbiting the earth or through ground stations. Entities

serve customers primarily in their domestic markets, although some entities operate in

more than one country.

Sustainability Disclosure Topics & Metrics

more than one country.

Sustainability Disclosure Topics & Metrics

Table 1. Sustainability Disclosure Topics & Metrics

TOPIC

METRIC

CATEGORY

UNIT OF

MEASURE

CODE

Number of broadband subscribers 108 Quantitative Number TC-TL-000.C Network traffic Quantitative Petabytes TC-TL-000.D Environmental Footprint of Operations Topic Summary Individual telecommunication services entities consume substantial amounts of energy.

Depending on the source of energy and generation efficiency, electricity consumption by telecom network infrastructure can contribute significantly to environmental

telecom network infrastructure can contribute significantly to environmental externalities, such as climate change, creating sustainability risks for the industry.

Although network equipment and data centres are becoming more energy efficient, their overall energy consumption is increasing with the expansion in telecommunications infrastructure and data traffic. How telecommunication services entities manage their

infrastructure and data traffic. How telecommunication services entities manage their overall energy efficiency or intensity, reliance on different types of energy, and how they access alternative sources of energy may become increasingly material as the global regulatory focus on climate change increases, creating incentives for energy efficiency and renewable energy as well as pricing of greenhouse gas (GHG) emissions. Because

and renewable energy as well as pricing of greenhouse gas (GHG) emissions. Because energy expenditures may be significant in the industry, entities that improve operational energy efficiency may increase cost savings and profit margins.

Metrics TC-TL-130a.1. (1) Total energy consumed, (2) percentage grid electricity and

(3) percentage renewable 1 The entity shall disclose (1) the total amount of energy it consumed as an aggregate figure, in gigajoules (GJ).

1.1

aggregate figure, in gigajoules (GJ).

1.1

The scope of energy consumption includes energy from all sources,

including energy purchased from external sources and energy produced by the entity itself (self-generated). For example, direct fuel usage, purchased electricity, heating, cooling and steam energy are all included within the scope of energy consumption.

1.2

The scope of energy consumption includes only energy directly consumed by the entity during the reporting period.

1.3

by the entity during the reporting period.

1.3

In calculating energy consumption from fuels and biofuels, the entity shall use higher heating values (HHV), also known as gross calorific values (GCV), which are measured directly or taken from the Intergovernmental Panel on Climate Change (IPCC).

2 The entity shall disclose (2) the percentage of energy it consumed that was supplied from grid electricity.

supplied from grid electricity.

108 Note to TC-TL-000.C – Broadband subscribers are defined as those customers that contract with the entity for fixed line cable and internet services, which include WiFi connections.

IFRS S2 INDUSTRY-BASED GUIDANCE 4© IFRS Foundation

2.1

The percentage shall be calculated as purchased grid electricity consumption divided by total energy consumption.

3 The entity shall disclose (3) the percentage of energy it consumed that was renewable energy.

3.1

Renewable energy is defined as energy from sources that are replenished at a rate greater than or equal to their rate of depletion, such as geothermal, wind, solar, hydro and biomass.

3.2

The percentage shall be calculated as renewable energy consumption

3.2

The percentage shall be calculated as renewable energy consumption divided by total energy consumption.

3.3

The scope of renewable energy includes renewable fuel the entity consumed, renewable energy the entity directly produced and renewable energy the entity purchased, if purchased through a renewable power purchase agreement (PPA) that explicitly includes renewable energy certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy

certificates (RECs) or Guarantees of Origin (GOs), a Green‐e Energy Certified utility or supplier programme, or other green power products that explicitly include RECs or GOs, or for which Green‐e Energy Certified RECs are paired with grid electricity.

3.3.1

For any renewable electricity generated on site, any RECs and GOs shall be retained (not sold) and retired or cancelled on behalf of the entity for the entity to claim them as renewable energy.

3.3.2

entity for the entity to claim them as renewable energy.

3.3.2

For renewable PPAs and green power products, the agreement shall explicitly include and convey that RECs and GOs be retained or replaced and retired or cancelled on behalf of the entity for the entity to claim them as renewable energy.

3.3.3

The renewable portion of the electricity grid mix outside the control or influence of the entity is excluded from the scope of renewable energy.

3.4

control or influence of the entity is excluded from the scope of renewable energy.

3.4

For the purposes of this disclosure, the scope of renewable energy from biomass sources is limited to materials certified to a third-party standard (for example, Forest Stewardship Council, Sustainable Forest Initiative,

Programme for the Endorsement of Forest Certification or American Tree Farm System), materials considered eligible sources of supply according to

Farm System), materials considered eligible sources of supply according to the Green-e Framework for Renewable Energy Certification, Version 1.0 (2017) or Green-e regional standards, or materials eligible for an applicable jurisdictional renewable portfolio standard.

4 The entity shall apply conversion factors consistently for all data reported under this disclosure, such as the use of HHVs for fuel usage (including biofuels) and

this disclosure, such as the use of HHVs for fuel usage (including biofuels) and conversion of kilowatt hours (kWh) to GJ (for energy data including electricity from solar or wind energy).

5 The entity may disclose the trailing 12-month (TTM) weighted average power usage effectiveness (PUE) for its data centres.

IFRS S2 CLIMATE-RELATED DISCLOSURES–JUNE 2023© IFRS Foundation 5

5.1

PUE is defined as the ratio of the total amount of power used by a computer data centre facility to the amount of power delivered to computing equipment.

5.2

If disclosing PUE, the entity shall follow the guidance and calculation methodology described in PUE™: A Comprehensive Examination of the Metric

(2014), published by ASHRAE and The Green Grid Association.

Managing Systemic Risks from Technology Disruptions Topic Summary

Managing Systemic Risks from Technology Disruptions Topic Summary Given the systemic importance of telecommunications networks, systemic or economy-

wide disruption may result if the telecommunication services network infrastructure is unreliable and prone to business continuity risks. As the frequency of extreme weather events associated with climate change increases, telecommunication services entities may face growing physical threats to network infrastructure, with potentially significant

face growing physical threats to network infrastructure, with potentially significant social or systemic impacts. In the absence of resilient and reliable infrastructure, entities may lose revenue associated with service disruptions or face unplanned capital expenditures to repair damaged or compromised equipment. Entities that successfully manage business continuity risks, including identifying critical business operations, and

manage business continuity risks, including identifying critical business operations, and that enhance resilience of the system may substantially reduce their risk exposure and decrease their cost of capital. While implementation of such measures may have upfront costs, entities may gain long-term benefits in terms of lower remediation expenses in cases of high-impact disruptions.

Metrics TC-TL-550a.1. (1) System average interruption duration, (2) system average

Metrics TC-TL-550a.1. (1) System average interruption duration, (2) system average interruption frequency and (3) customer average interruption duration 1 The entity shall disclose its (1) system average interruption duration in minutes.

1.1

The system average interruption duration is defined as the total duration of service disruptions for the average customer during the reporting period.

1.2

A service disruption is defined as a significant degradation or interruption

period.

1.2

A service disruption is defined as a significant degradation or interruption in the ability of a significant number of end users to establish and maintain a channel of communications in a particular service offered by the entity (voice, SMS, broadband, mobile data, etc.) because of failure or degradation in the performance of a communications provider’s network.

1.3

The entity shall calculate its system average interruption duration as the

1.3

The entity shall calculate its system average interruption duration as the sum of the number of customers interrupted in each service disruption multiplied by the duration of each service disruption (restoration time),

divided by the total number of customers served, written as ∑(ri × Ni) / NT .

1.3.1

∑ = Summation function

1.3.2

1.3.3

Ni = Total number of customers interrupted in each service disruption

1.3.4

NT = Average number of unique customer accounts with active service during the reporting period 2 The entity shall disclose its (2) system average interruption frequency as a number of service disruptions per customer.

2.1

The system average interruption frequency is defined as the average number of times a customer experienced a service disruption during the reporting period.

2.2

number of times a customer experienced a service disruption during the reporting period.

2.2

The entity shall calculate its system average interruption frequency as the total number of customers interrupted divided by the total number of customers served, written as ∑(Ni) / NT.

2.2.1

∑ = Summation function

2.2.2

Ni = Number of customers interrupted in each service disruption

2.2.3

NT = Average number of unique customer accounts with active service during the reporting period 3

NT = Average number of unique customer accounts with active service during the reporting period 3 The entity shall disclose its (3) customer average interruption duration in minutes.

3.1

The customer average interruption duration is defined as the average amount of time required to restore service once a service disruption has occurred.

3.2

The entity shall calculate its customer average interruption duration as the sum of the number of customers interrupted in each incident

the sum of the number of customers interrupted in each incident multiplied by the duration of each service disruption (restoration time),

divided by the total number of customers interrupted, written as∑(Ni × ri) / ∑(Ni).

3.2.1

∑ = Summation function

3.2.2

ri = Restoration time for each service disruption, in minutes

3.2.3

Ni = Number of customers interrupted in each service disruption 4 The scope of disclosure is restricted to:

4.1

Wireline communications services

4.2

4 The scope of disclosure is restricted to:

4.1

Wireline communications services

4.2

Wireless communications services

4.3

Note to TC-TL-550a.1 1 The system average interruption duration, system average interruption frequency,

and customer average interruption duration are related metrics, and one can be derived from the other two. For example, the system average interruption duration (sub-metric 1) can be calculated by multiplying the system average interruption frequency (sub-metric 2) by the customer average interruption duration (sub-metric 3).

duration (sub-metric 3).

2 For each significant service interruption, the entity shall disclose the duration of the disruption, the extent of impact and the root cause, as well as any corrective actions taken to prevent future disruptions.

2.1

If relevant, the entity shall show costs incurred, such as those because of organisational change, training or technology expenditures required for remediation, lost revenue, payment of warranties or costs associated with breach of contract.

remediation, lost revenue, payment of warranties or costs associated with breach of contract.

TC-TL-550a.2. Discussion of systems to provide unimpeded service during service disruptions 1 The entity shall discuss business continuity risks associated with service disruptions affecting operations.

1.1

Examples of disruptions may include those caused by technical failures,

programming errors, cyberattacks, weather events or natural disasters at hosting facilities.

2 The entity shall discuss how it manages business continuity risks, including an identification of critical business operations and redundancies or other measures implemented to enhance resilience of the system or to reduce impact, including insurance against loss.

3 The entity may discuss the estimated amount of potential loss, probability of that

3 The entity may discuss the estimated amount of potential loss, probability of that loss and the associated time frame. These estimates may be based on insurance figures or other third-party or internal assessments of potential loss.

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