Lars Magnus Ericsson founded Ericsson in 1876 on the premise that communication was a basic human need and should be available to all. While the company has been innovating what communication means since then, it has always done so with a sense of importance of the role it plays in society. This is still clearly reflected in the current company purpose: “Empowering an intelligent, sustainable and connected world”.
The sustainability element of this purpose is nothing new to Ericsson. It has informed the company’s technology and industry leadership for generations, as Heather Johnson, Vice President Sustainability and Corporate Responsibility at Ericsson, explains.
“I believe that sustainability has always been deeply embedded into Ericsson’s DNA. Today, it’s more important than ever to articulate that value, and what the ICT industry can contribute not only to our traditional stakeholders – customers, employees and investors – but also society at large.”
Ericsson has long recognized its responsibility in ensuring its technology impact makes a positive contribution to society, as well as reducing risks across the company and its value chain. Ericsson therefore strives to ensure that value creation, in all its forms, is realized for all stakeholders.
"It’s a false choice to decide between doing good in society and doing business,” Johnson says. “In fact, it’s the intersection of these two where I believe we can create the most value. Embedding the sustainability and corporate responsibility strategy across the business is helping us find that intersection and realize benefits for our stakeholders.”
The integration of sustainability and corporate responsibility into Ericsson’s business strategy in 2019 clearly indicated its importance to the company. “We’re focused on driving business transformation, the type of transformation that we know will create value: from the way we run our company in terms of efficient use of resources and responsible business practices, how we develop and deliver our portfolio and services, to the partnerships and programs that we drive to improve digital inclusion in society,“ Johnson says.
With this drive, Ericsson was one of the first companies to develop science-based targets that are in line with the UN’s climate agenda to reach the 1.50 Celsius trajectory. The commitment caps off a substantial history aimed at pioneering sustainability leadership in the private sector.
Ericsson was also one of the first companies to understand and embrace the important role the private sector could play in helping to achieve the United Nations’ Sustainable Development Goals. “Through research with Columbia University, we understood that Information and Communication Technology (ICT) has the potential to help achieve all 17 of these Global Goals and in some cases, accelerate their achievement faster than target dates,” Johnson says.
In carbon emissions reduction alone, the ICT sector can play a hugely positive role. “Our own industry is responsible for 1.4 percent of global carbon emissions, but we have an enablement factor of 10, meaning that ICT solutions applied across other industries can reduce global emissions by 15 percent,” Johnson says. “For us, it isn’t just talk or ‘commitments’ – we are being concrete about what we can do as a company and how we can enable other industries to make a positive impact.”
Ericsson’s approach to sustainability is in line with other parts of the company, with significant research investment to understand challenges and make informed decisions. For example, two decades of lifecycle assessments show that the company’s biggest environmental impact is in mobile networks that are in use. “With this top of mind, we have focused on ensuring the best energy performance possible, how the products are designed, how the network could be built, managed and run, to break the energy curve,” Johnson says.
It’s this same research-based approach that has contributed heavily to the standardization of 5G. “If we look at 5G, it is by far the most energy efficient of all the generations. It will be an enormous contributor to breaking the energy curve,” Johnson says. “By reducing network energy use, we can also help to reduce what is often our customers’ largest operating cost. The shift to 5G brings an opportunity for our customers to efficiently address the overall energy cost of the existing network by modernizing and replace old equipment. The latest radio equipment also opens up for a more energy efficient way to aggregate standards and utilize sleep modes in a more strategic way.”
Exponential climate action
In 2018, Ericsson’s work with other climate thought leaders – including Professor Johan Rockström at the Potsdam Institute and the WWF – resulted in the Exponential Climate Action Roadmap which states that ICT solutions could directly reduce carbon emissions up to 15 percent by 2030.
During 2019, the same partners issued the Exponential Roadmap 1.5 in conjunction with the UN Climate Action Summit. The Roadmap illustrated 36 existing solutions across sectors that can be scaled globally to help halve global greenhouse gas emissions by 2030. As a spinoff to the Roadmap, the partners released the 1.5 Business Playbook in 2020 at the World Economic Forum, a framework for companies of any size to set targets for climate action. For Ericsson, this means working closely with the supply chain to help fully integrate climate action into their business strategies and ultimately reach net-zero emissions.
So, how will sustainability and corporate responsibility in Ericsson, the ICT industry and the wider business world change in the future? “While it is always hard to predict, I believe it’s going to be difficult to be a viable company if you are not aligning your business with the planetary boundaries and societal needs,” Johnson says. “Thinking more about sustainability and responsible business practices is a must moving forward. The expectations of the next generation’s workforce about what companies should stand for and deliver is only going to increase. We already see that the majority of investors are focusing more on sustainability in general and climate impact in particular. The companies that lead in these areas are the companies that are going to be successful in this business transition.”
Find out more about how Ericsson is creating positive impact with sustainability and corporate responsibility.