ESG Priorities for Global Telecommunications: SASB Standard

This article discusses the ESG priorities for global telecommunications based on SASB standard, accounting metrics for measuring ESG priorities, SASB ESG priority analysis, British Telecom ESG priorities, and more. It also evaluates the variances between ESG priorities listed above and that mentioned in the case and provides recommendations for making decisions based on available data.

Running head: SUSTAINABLE FINANCE
Sustainable finance
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Table of Contents
Overview of ESG priorities for global telecommunications based on SASB standard:..................3
Accounting metrics for measuring ESG priorities of global telecommunications:.........................3
SASB ESG priority analysis:...........................................................................................................4
British telecom ESG priorities:........................................................................................................5
Non-profit stakeholder’s issues:......................................................................................................6
Evaluation of variances between ESG priorities listed above and that mentioned in the case:......6
Further information for making decision:........................................................................................7
Recommendation making decision based on available data:..........................................................7
References list:.................................................................................................................................9

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Overview of ESG priorities for global telecommunications based on SASB standard:
The model that is used for scoring and evaluating the companies operating in
telecommunication sector is based on ESG factors that are environmental, social and governance
factors. Environmental factors accounted for environmental risks, management and
opportunities. Social factors on other hand covered the management of human resources of
firms, regulatory risks, partner and supplier’s risks and reputational capital and brands. Lastly,
adhere of organization to business ethics and corporate governance practices and commitment of
sustainable development are incorporated in the governance factors. Telecommunication
companies are provided with the accounting metrics by the sustainability accounting standard
that assist in accounting the measurement of sustainability performance. The two main segments
of telecommunication industry are wireless and wire line and such segments are influenced due
to expansion of usage of electronic gadgets. SASB has identified some accounting metrics that
helps telecommunication companies in making disclosure about their sustainability performance
(Clarke and Boersma 2016). In order to ensure completeness, comparability and accuracy of data
that is reported by companies, the narrative disclosure of materials factors regarding
sustainability is required. Some of the accounting metrics for measuring the telecommunication
industry ESG priorities according to SASB comprised of activity and accounting metrics.
Activity metrics are deemed to be useful for accounting metrics and a disclosure about
contextual information of company is made theory this particular metric (Churet and Eccles
2014).
Accounting metrics for measuring ESG priorities of global telecommunications:
SASB has outlined the following accounting metrics for measuring priorities relating to
ESG:

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 Frequency and duration of average interruption are some of the metrics for measuring the
technological disruptions.
 Data privacy metrics includes policies that help in collection and usage of information
about customers. Some other metrics comprised of amount of legal and regulatory fines
and customer settlements concerning privacy.
 Renewable energy percentage, grid energy percentage and total consumption of energy
by cellular and fixed network.
 Data security number metrics involve addressing of security risk by management and
breach of data security.
Some of the activity metrics are listed below:
 Wireless services subscribers
 Broadband service subscribers
 Wire line services subscribers
 Fixed and cellular network percentage and network traffic
SASB ESG priority analysis:
A systematic approach has been pursued by association of European Telecommunications
Network Operators' (ETNO) that helps in integration of social, environmental and governance
factors for enhancing returns and mitigating risks throughout the investment cycle. Association is
committed to extend itself as role model in enhancing corporate sustainability by going beyond
the business interest and creating positive impact alongside adopting the guidelines of global
sustainability reporting. Such platform enables organization in communicating the performance
of business and ESG factors in an integrated way. In relation to sustainability, ETNO has a long

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history as it make responsible use of natural resources and significantly focuses on protecting
environment (Etno.eu 2018). It furthers intends to make investigation into telecommunication
role in driving sustainability of environment. Member companies of ETNO are convinced with
the importance of effectively managing energy and natural resources along with maintaining
healthy and safety environment at workplace that helps in enhancing the productivity and well
being of workforce (Casey 2018).
British telecom ESG priorities:
British telecom intends to maintain highest standard in their financial and corporate
reporting by carrying out their operating activities according to business integrity and ethics
(bt.com 2018). In addition to this, organization manages its operations by measuring its material
impact. The list of ESG priorities of British Telecom are as follows:
 Providing protections to customers from online threats by improving their relationship
with suppliers and supporting human rights.
 Using technology to reduce the carbon footprints and helping customers in such measure
by reducing the impact of carbon emission by three times.
 Saving energy by reducing its usage by installing energy efficient lights, energy efficient
rectifier units and installing adiabatic cooling units in place of air intensive air
conditioning (Delgado et al. 2017).
 Implementation of new tech literacy which help in extending the commitment to
education in United Kingdom.

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Non-profit stakeholder’s issues:
The nonprofit stakeholders of organization have been impacted by return on investments
and loss of legitimacy. There is increased pressure on such stakeholders to enhance their
performance. For nonprofit organizations, one of the most underappreciated elements is human
resource. Valuing workplace and people, managing of ESG risks in business activities,
advancement of environmental management, focusing on ESG for pursuing services and
products of organization are some of the issues concerning nonprofit stakeholders of
organization. Non profit stakeholders are also monitored in terms of environmental issues with
further issues being reported on matters relating to integrity and compliance. Such stakeholders
should be provided insight into the way company does the identification of key ESG risks and
opportunities. ESG risks are prioritized in terms of the possible outcomes and likelihood of risk
manifestation.
Evaluation of variances between ESG priorities listed above and that mentioned in the
case:
The timing of case study is the partial reason attributable to variances between the ESG
priorities that have been identified above and those that are mentioned in the given case study.
Modification in above listed ESG priorities along with its evaluation is done according to
alterations in the standard due to changing environment of doing business and the information
depicted in the vase study has happened or occurred long time back. The process of constructing
scores of ESG relating to individual companies helps in generating of metrics that is presented in
the case study. The given case study has identified a lower level of qualitative and quantitative
metrics as against the priorities that have been identified above. Furthermore, several facts and

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aspects are considered for rating the organization on ESG rating as lower or higher compared to
facts and aspects that are different in determining today’s ESG priorities (Aziakpono et al. 2014).
Further information for making decision:
Decision making within organization is attained by integration of ESG data with
reporting on other data including financial figures in the annual report. In order to allow
spreadsheet integration, it is essential to make reporting on benchmark data of industries along
with raw data on ESG. Outlining the importance of ESG is considered essential and explanation
of aspects would assist organization in implementing strategic decision (Jitmaneeroj 2016).
Moreover, organization should determine topics relating to ESG that are relevant for current,
future and own business activities of company. Analysts and financial investor’s expectations are
met by communicating information with respect to completeness, scope, frequency and details.
Such information should be adequately explained, transparent, consistent and quantified which
would further provide assistance in comparing such information and facilitate decision making.
The future prosperity and sustainability of business is determined by some non financial matters
and such non financial information is of considerable importance in financial decision making of
investors. Sustainable development information of company presenting the efforts of corporate
social responsibility should be incorporated (Aragón et al. 2016). It is so because such
information forms a fundamental part of statutory and legally sorted financial reporting.
Recommendation making decision based on available data:
It is required to take into account benchmark data for collecting of ESG data in a more
efficient way. In relation to audit proof collection and data documentation, recommendation
should be provided. There should be methods suggested for extrapolating information in an

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efficient manner along with reporting data in a systematic way so that data reliability is done at
high level. The prepared ESG report and the data incorporated should be reported, documented,
analyzed and disclosed that would provide assistance in external and internal audit review
(Daszynska et al. 2016). Reporting on ESG matters should be well aligned with the capital
market. However, in relation to reporting on available data for facilitating decision making
among investors, some of the recommendations can be made that are listed below:
 The methods used by organization for computation of figures should be disclosed
 Data relating to ESG should be well incorporated in the annual report of company.
 Alterations in the content and scope of data should be made when it is possible to provide
justification for the same.
 The presentation slides should also present key financial data
 Principles of effective financial communication should be followed by company when it
is required to make external presentation of ESG information (Ortas et al. 2015).
 The annual report should adequately make disclosure of key financial indicators in the
table format. This would help in facilitation of extracting and comparing data with ease.

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References list:
Aragón-Correa, J.A., Marcus, A. and Hurtado-Torres, N., 2016. The natural environmental
strategies of international firms: old controversies and new evidence on performance and
disclosure. Academy of Management Perspectives, 30(1), pp.24-39.
Aziakpono, M., Bauer, R. and Kleimeier, S., 2014. Financial globalisation and sustainable
finance: Implications for policy and practice. Journal of banking and finance, 48(11), pp.137-
138.
Casey, T., 2018. Corporate Social Responsibility in Nonprofit Organizations: How Nonprofits
Leverage CSR and Sustainability Reporting.
Churet, C. and Eccles, R.G., 2014. Integrated reporting, quality of management, and financial
performance. Journal of Applied Corporate Finance, 26(1), pp.56-64.
Clarke, T. and Boersma, M., 2016. Sustainable Finance? A Critical Analysis of the Regulation,
Policies, Strategies, Implementation and Reporting on Sustainability in International
Finance. UNEP-Inquiry: Design of a Sustainable Financial System.
Daszynska-Zygadlo, K., Slonski, T. and Zawadzki, B., 2016. The market value of CSR
performance across sectors. Engineering Economics, 27(2), pp.230-238.
Delgado-Márquez, B.L., Pedauga, L.E. and Cordón-Pozo, E., 2017. Industries Regulation and
Firm Environmental Disclosure: A Stakeholders’ Perspective on the Importance of Legitimation
and International Activities. Organization & Environment, 30(2), pp.103-121.

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Etno.eu. (2018). [online] Available at: https://etno.eu/datas/positions-papers/2018/UN
%20Global%20Compact%20CoE2018.pdf [Accessed 6 Aug. 2018].
Home.bt.com. (2018). Fibre Broadband, TV Packages, BT Sport & Mobile Deals | BT. [online]
Available at: https://home.bt.com/ [Accessed 6 Aug. 2018].
Jitmaneeroj, B., 2016. Reform priorities for corporate sustainability: environmental, social,
governance, or economic performance?. Management Decision, 54(6), pp.1497-1521.
Ortas, E., Álvarez, I. and Garayar, A., 2015. The environmental, social, governance, and
financial performance effects on companies that adopt the United Nations Global
Compact. Sustainability, 7(2), pp.1932-1956.
Ortas, E., Álvarez, I., Jaussaud, J. and Garayar, A., 2015. The impact of institutional and social
context on corporate environmental, social and governance performance of companies
committed to voluntary corporate social responsibility initiatives. Journal of Cleaner
Production, 108, pp.673-684.