The OECD report “Environmental Sustainability of Communication Networks” (2025) analyses the key role of digital infrastructure in the transition to a decarbonised economy. It highlights the need to balance two key dimensions: minimising the direct environmental footprint of communication networks while maximising their enabling effect to reduce emissions across other sectors.
Telefónica stands out as a leader in this field, having been recognised multiple times for its best sustainability practices. In 2025, it was ranked among the world’s top 10 most sustainable companies by Time and Statista and, for the eleventh consecutive year, it was included in CDP’s prestigious ‘A List’.
The company has integrated decarbonization into its core strategy with a Climate Action Plan and has set ambitious targets: reducing its direct emissions by 90% by 2030 and achieving net-zero emissions, including its value chain, by 2040, neutralizing the 10% of emissions it has not been able to reduce. All of this is in line with OECD recommendations to adopt clean technologies and circular models.
The Enabling Power of Communication Networks
The OECD explicitly acknowledges the enabling effect of communication networks: for every tonne of CO₂ emitted by the ICT sector, up to 10 tonnes are avoided in other economic sectors through digital solutions. This impact is evident in:
- Smart grids that optimise energy consumption.
- Connected transport systems that reduce urban congestion.
- Precision agriculture using IoT sensors to minimise resource use.
However, the report highlights a regulatory paradox: while the OECD quantifies this positive environmental impact, the European Union has yet to fully integrate these externalities into its regulatory framework. This creates asymmetries in the cost-benefit evaluation of digital infrastructure investments.
Advanced networks not only enable emissions reductions but also improve their own energy efficiency. The deployment of 5G and next-generation fibre optic networks reduces energy consumption per unit of transmitted data by up to 90% compared to previous technologies.
This paradox also affects the EU’s sustainable finance regulatory package, as telecommunications networks are not included in the Taxonomy of Sustainable Activities. This means that investments in them could not be classified as “green,” nor are environmental criteria established for their deployment, posing a new obstacle to their financing. Moreover, they are not regulated in favour of climate objectives, despite being a key sector in economic and social development over the next decade.
The Path to Climate Neutrality
The OECD stresses the need for harmonised metrics to measure the environmental impact of networks. Telefónica demonstrates transparency by reporting:
- Energy consumption per unit of traffic (ratio has improved by 90% since 2015).
- Percentage of renewable electricity usage in own facilities (89.1% in 2024).
- Recycled electronic equipment (30% in 2024).
Telefónica is also, as the OECD report indicates, one of the few companies that has set a corporate goal of achieving “zero waste” by 2030, through eco-design, circular purchasing, reuse and recycling.
The report also warns of regulatory risks: only 50% of European regulators have explicit mandates on environmental sustainability. This could hinder investment in efficient networks if economic incentives are not aligned with climate objectives.
A Regulatory Framework that Integrates Environmental Benefits
The report reveals that while over half of OECD regulators have some responsibility for the environmental impact of networks, most lack a direct mandate or an integrated methodology to ensure these benefits are recognised. The OECD urges governments to strike a balance in decision-making to extend sustainability across the telecom sector.
The EU is making progress in this area. Although not legally binding, the State Aid Guidelines for Broadband Networks allow for sustainability-based evaluation criteria. Additionally, BEREC has had a sustainability expert group since 2020 to expand knowledge and contribute to new policy developments.
Recently, BEREC launched a public consultation to assess how national regulators consider environmental benefits when evaluating network-sharing agreements. Findings revealed that most regulators have not integrated sustainability into their decision-making, focusing solely on competition issues. This represents a missed opportunity to include environmental considerations in regulatory evaluations and to encourage telecom operators to align with sustainability goals.
The OECD Competition Committee has also addressed the integration of environmental factors into competition law and policy. A key takeaway is that competition authorities must incorporate environmental objectives into their work, given the urgency of the climate crisis.
In this regard, the revision of the EU’s Horizontal Guidelines under Article 101(3) TFEU, mentioned in Teresa Ribera’s mission letter, represents an opportunity to incorporate sustainability efficiencies into the overall competitive impact assessment of horizontal cooperation agreements.
Additionally, the OECD report highlights spectrum policy as another area where regulatory decisions significantly impact both the environmental sustainability of telecoms and their ability to facilitate emissions reductions in other sectors. The availability of sufficient spectrum for mobile network deployment is key to meeting the rising demand for coverage and capacity while ensuring the most sustainable approach to expanding connectivity.
The green transition requires intelligent and sustainable digital networks. As Telefónica demonstrates, decarbonising the telecom sector is not only technically feasible but also economically viable when integrated into corporate strategy.
The OECD’s findings highlight an urgent regulatory challenge: policymakers must create frameworks that recognise the dual environmental role of communication networks—as clean infrastructure and as a key enabler of emissions reduction—to accelerate the transition towards a decarbonised economy.
