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Digicel to slash emissions to nil

Telecommunications provider Digicel Group plans to become carbon-neutral by 2050, which means that it will implement projects geared at slashing its impact on the climate to nil — starting now.

The globe experienced the hottest summer on record, giving new urgency to put a check on rising temperatures.

Digicel plans to halve its carbon emissions by 2035, first by addressing its own direct carbon footprint, then to ‘net zero’ by tackling emissions linked to its own operations but which emanate from sources over which it does not exercise control. The latter is referred to as indirect emissions.

In climate change lexicon, the two categories are referred to as Scope 1 and Scope 2.

“To demonstrate our willingness to be transparent and accountable for our goals, we have released our Scope 1 and 2 emissions data for the first time, providing information around our greenhouse gas emissions,” said Digicel Group CEO Oliver Coughlan in a statement released with the Digicel Environmental Social & Governance Report 2023 report.

In alignment with the worldwide push to reduce carbon emissions, ESG metrics have become a focal point in the assessment of companies trading on global markets.

Although Digicel is a private company, it is in the process of being acquired by private equity funds that invest globally. The release of the telecoms new ESG report in October comes at an advanced stage in the takeover, which has already resulted in the naming of a new chairman-designate to replace founder and Irish billionaire Denis O’Brien. Coughlan is also stepping down as CEO this month.

Digicel Group, whose operations span 25 markets in the Caribbean and Central America, emitted some 277,900 tonnes of carbon dioxide or CO2 at year ending March 2023, according to the ESG report.

Carbon dioxide is the most toxic of the greenhouse gases that are heating up the Earth. Every second, the world emits 1,000 tonnes of CO2 from burning fossil fuels, according to NASA, the US National Aeronautics and Space Administration, which is a global authority on space and science.

For Digicel to slash its emissions, it needs to use less energy, implement renewable energy solutions like solar and wind plants, and then capture carbon by planting trees, the report said.

The company did not release any figures in its ESG report on the scope of the investment required to meet that target. Implementing these projects, however, would reduce its carbon footprint and eventually increase value to its stakeholders, the report added.

“By aligning our corporate strategy with ESG principles, we aim to create long-term value for our stakeholders and contribute to the well-being of our planet,” reasoned outgoing Chairman O’Brien in the report.

O’Brien will relinquish majority control to a consortium led by private equity funds PGIM, Contrarian Capital Management, and GoldenTree Asset Management. They are among the largest holders of Digicel bonds who negotiated an agreement with O’Brien to swap the debt for equity.

It’s still unknown the size of the stake O’Brien will be left with in the company he founded in Jamaica in 2001, before growing its footprint to more than 30 markets and then downsizing to 25. But he will remain a minority owner and continue to sit as a director on Digicel’s board.

O’Brien added that even though Digicel will embark on its carbon neutrality thrust, it still strongly supports the social aspect of ESG, particularly in Haiti, Jamaica and Trinidad & Tobago, by way of the Digicel Foundation.

Over the years, the foundation has invested US$83 million, US$44 million, and US$6 million, respectively, in these territories, the report stated. Overall, Digicel Group has invested US$5 billion to build out its telecoms operations in the region and beyond, over 22 years.

That capex programme has been financed mainly with debt that the firm can no longer service adequately — leading to its takeover by creditors.

The summer of 2023 was characterised by heatwaves around the world and the hottest average temperature on record, which led to deaths and respiratory concerns across many countries. Temperatures are set to rise by 2050 and beyond, making the global pact to reduce emissions even more urgent.

Scientists have generally agreed, as part of the pact referred to as the Paris Agreement, that to get temperatures below 1.5º Celsius (2.7º Farenheit) by 2050, emissions need to be cut virtually in half by 2030 relative to 2019 levels, according to the United Nations Intergovernmental Panel on Climate Change.

“Our long-term goal is ‘net zero’ by 2050, in line with the Paris Agreement, which aims to limit the increase in global average temperature. We realise that’s a long way out, so we’ve charted a path to get there so we can be sure that we’re on track,” said Digicel. “Rising sea levels and changing weather patterns are expected to have an outsized socio-economic impact on the Caribbean and Central America. As a company operating in small island developing states, we have experienced the devastating effects of climate change first-hand.”

Its goal focuses on reducing the effects on air pollution, rather than other factors.

“Our climate commitment explores our carbon utilisation and details our plan to reduce and neutralise our emissions over the coming decades. We recognise that other factors such as water and waste pollution have significant environmental effects, but we feel that initially focusing on one aspect will lead to greater gains in our battle against climate change,” the report noted.

At present, Digicel uses a combination of hybrid and solar solutions to generate renewable energy at its affiliated 5,090 cell sites. Currently, just 107, or 2.0 per cent of the 5,090 cell sites, are powered solely by solar energy, while hybrid power solutions are implemented at 15 per cent of them.

“To fulfil our pledge to reduce our environmental footprint, we have implemented the use of eco-friendly renewable energy resources in 24 per cent, or six of our markets across the Caribbean and Central America. Our successful installation of solar panels and wind turbines allows us to harness natural energy and use it to support connectivity, digital products, and services for our customers and communities,” Digicel said.

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