How AI and automation are impacting Telefónica's sustainability stratgey

Over the last decade Telefónica has lowered its total overall CO2 emissions by 49%. Insight caught up with Nilmar Seccomandi, Director of Autonomous Network and Infrastructure in the Group's Global CTIO Office, and Maya Ormazabal, Global Director of Sustainability at Telefónica, to discuss what's next as the company sets its sights on achieving net zero emissions by 2040.

Like other telcos, Telefónica has benefited from huge, one-off infrastructure replacements, namely decommissioning its copper access network, or moving wireless traffic from 4G to 5G. This has helped it reduce by 91% its Scope 1 and 2 CO2 footprint, which represents emissions from its own operations. Fiber broadband networks, points out Seccomandi, are 85% more energy efficient than copper, thanks to technologies such as XGS-PON. The company has also benefited from network virtualization, which is 30% more energy efficient than bare metal servers, says Seccomandi.

This period of large network upgrades, however, is largely over. The next stage of decarbonization will take place amid growth in AI usage and the company is turning to operational automation, including the development of autonomous networks, and the use of systems such as digital twins, to make some of the next advances in energy saving and emission reduction.

Automating energy efficiency

Telefónica has a relatively long history in promoting sustainability, having established its climate change office 20 years ago. In addition to setting corporate climate targets, the office supports operating companies in Spain, Brazil and Germany in advancing their own initiatives.

Over time, collaboration between technology and climate teams has deepened, according to Ormazabal and Seccomandi. Whereas synergies between technology and climate teams initially focused on energy efficiency and the use of renewable energy sources “now we have broadened the objectives, and we are working in a lot of different initiatives,” says Ormazabal. “We work very closely, not just to define our targets, but also in the projects we are implementing,” agrees Seccomandi.

When it comes to autonomous networks, for example, Seccomandi emphasizes the importance of being guided by sustainability principles from design through to deployment. “When we created our AN program one of our main targets was energy efficiency by design, sustainability by design,” he says.

Indeed, out of the eight principal KPIs Telefónica has developed to measure autonomous network progress, two relate directly to sustainability, namely energy efficiency and improvement of its CO2 footprint.

AI pros and cons

However, as Ormazabal points out, AI “offers opportunities to reduce the energy consumption and efficiency in the networks, but also has challenges related with the water consumption and energy consumption of data centers [that are] not affecting directly our own infrastructure ... and ... challenges related to traffic increase.”

Examples, of how AI helps reduce both energy costs and emissions include one of Telefónica’s high value autonomous network (AN) scenarios, implemented by Vivo in Brazil, called the Fractal project. It uses artificial intelligence to perform data analysis that helps engineering and implementation teams optimize network capacity planning. Vivo uses the system to autonomously identify the best network expansion points and to minimize commissioning and maintenance costs.

Another area where Telefónica is marrying sustainability and cost control is in its management of token consumption for different AI models as part of a GSMA program.

“We have been implementing agents, some cases in production, in some cases in MVP (Minimum Viable Product) or trial. We are realizing that the observability layer offers a view of the performance of the agents but also the tokens they are consuming,” according to Seccomandi. “It's very important because in some cases we are seeing that some agents are not so precise and they are consuming many more tokens than necessary. We are not just ... implement[ing] ... agents, but also analyz[ing] ... KPIs to be efficient in both costs and sustainability.”

Other examples of the use of AI to inform more sustainable choices include a digital twin that shows via a thermal map where the cooling systems of Telefónica's data centers are wasting energy and could apply power-saving features. Wider initiatives to reduce Scope 1 and 2 emissions related to network operations include the use of renewable energy, smart metering, and lithium batteries to create what Seccomandi calls smart sites.

Collaborating on Scope 3

Lowering Scope 3 emissions, however, is a stubbornly difficult challenge for most businesses because they result from activities that lie beyond their direct control, such as the way customers use services, or how suppliers develop or deliver products and services. They also typically represent the biggest — and in the case of some telcos, an expanding — slice of the overall carbon footprint. Telefónica is notable in its achievement of reducing its Scope 3 emissions by 34% over the last decade. Nonetheless, reductions in Scope 1 and 2 emissions over the same period mean that Scope 3 still represents more than 90% of its total emissions.

As a result, the company is working hard with suppliers and customers to further lower Scope 3 numbers. When it comes to end customers, initiatives include the development of an energy-efficient WiFi 7 router which contains 70% recycled materials as well as durable materials that extend its estimated lifespan, and a HomeBox 4 router that also incorporates energy-saving features and recycles materials. 

Ormazabal says she is also seeing greater collaboration with suppliers and “more specifics on ...lifecycle assessment information related ... to carbon emissions of specific products.”

In particular, “there is more action because we have better data, and because we are talking [a] ...common language," she says. “It's a really holistic approach. The most advanced suppliers and the most advanced companies have had the same challenges, so we have specific conversations that we find very, very useful.”

CDP, which runs an independent environmental disclosure system for companies, capital markets, cities, states and regions, recently acknowledged Telefónica’s efforts and awarded the company the highest rating (A) in CDP’s Supplier Engagement Assessment (SEA) for the seventh year running. Telefónica and Telefónica Brasil are among the 40 global telecoms companies and 1,400 companies across all sectors on CDP’s SEA ‘A List’.

Further industry collaboration, and better data, are still needed, however, to further reduce Scope 3 targets.

“We are having more quality conversations with our suppliers,” explains Ormazabal. “If we have better information, more accurate information, and more collaboration within the whole sector, we will be able to reduce it.”

Here, she sees European regulation playing a helpful role, including when it comes to managing the impact of AI. “There are some pieces coming in Europe [that will help] ...everyone to make better decisions, and to choose whether we need to use AI or not, because it's not only about suppliers, it's also about customers,” says Ormazabal. “It's about improving transparency, giving more information, and raising awareness, and also putting [in place] the legal framework.”