Our planet is facing an unprecedented resource crisis. The environment is threatened by overexploitation of raw materials and the effect is clear: climate change is advancing rapidly. 45% of global emissions come from the production and use of products, and the extraction of natural assets causes 90% of biodiversity loss and water stress. According to the World Resources Institute more than 100 billion tons of mineral, biological and fuel resources are consumed each year and projections indicate that by 2050 the extraction and use of materials will double from 2015 levels. And to note that the situation is not improving, reuse rates: in 2018, 9% of materials were reused and recycled. By 2020 this figure had dropped to 8.6%, and by 2023, only 7.2% of products had been given a second life. This results in a high reliance on extraction of virgin materials. This is what the World Economic Forum adheres to. Reintroducing reclaimed materials into production chains means a significant reduction in environmental impact, which is why many companies are committed to the circular economy.
This is the case of Telefónica, which sees manufacturing as an opportunity to act in a way that respects the planet while maintaining economic growth. This solution could reduce resource use by 28% or global greenhouse gas emissions by 39%. Furthermore, the European Union alone could create around 700,000 jobs and increase its GDP by even 0.5% by 2030, the year marked on the calendar for Telefónica to become a zero waste company. To achieve this, Telefónica focuses on repair, reuse and ultimately recycling, allowing materials to be reintegrated into the production and continuity cycle. Although his work is much more. The company strives to mitigate climate change with more ambitious emissions reduction targets than those set out in the Paris Agreement: net zero by 2040, including along the value chain. This is an objective ten years earlier than indicated in international agreements. In fact, they have reduced their operational carbon emissions by 80% due to the use of renewable energy and the integration of efficient technologies.
Digitization, promotion of circular economy
Digitization and connectivity are the pillars of circular economy. That is why Telefónica, a leader in this sector, promotes the circularity of other economic sectors thanks to its digital solutions and various performance measures. The MAIA project was created within this framework: by changing the network, Telefónica reuses its equipment, promoting the circular economy in eliminating processes. Therefore, the plan aims to ensure that all network equipment is reused, reconditioned or recycled by 2025. On the other hand, Telefonica avoids generating waste by reusing its equipment over its useful life.
Thanks to the company’s efforts, they were able to give a second life to more than four million electronic devices, avoiding more than 350,000 tons of CO2 emissions and creating more than 5,500 tons of waste. In fact, they have repurposed 86% of routers and decoders to refurbish them, although they continue to operate, so that this number will reach 90% by 2024. If reuse is not possible, Telefónica turns to recycling: in 2022, the telco recycled 98% of all its waste, of which 91% comes from network transformation processes created by closing copper plants. They work with their suppliers to buy products based on the circular economy, such as repair, recycling, sustainability or eliminating single-use plastics. These benchmarks begin in 2025.
A second life for mobiles
“There are currently more than five billion mobile phones stored in drawers in the world,” notes Telefónica’s Environment Director Maya Ormazabal. Hence the importance of the new sector commitment promoted by the GSMA, where Telefónica is involved in the collection of terminals for reuse and recycling. The company offers its customers buy-back services, sales of second-hand phones and recycling points in its stores. Therefore, second hand devices go through a reconditioning process which returns to the market with the highest quality and best conditions after a thorough process of repairs, checks and tests. At 40% cheaper, these phones maintain the quality of a new one. The company wants to reach 500,000 units of recycled phones by 2030. As of now, by 2022, 57% have been reused (more than 386,000 mobile phones) and the remaining 43% have been recycled.
Digital platforms for circular efficiency
To manage the large scale equipment of a company like Telefónica in 13 countries, the telco seeks to digitize processes through various platforms, enabling greater innovation in the chain and improving environmental and cost efficiency.
The company has MARA, an omnichannel model with an end-to-end approach that allows its customers to automatically evaluate their devices and access buyback programs anywhere. The company thus improves device management time and reduces logistics movements, while generating revenue from reuse and preventing terminals from being wasted. VICKY uses blockchain technology to achieve greater traceability in the value chain of modems, routers and TV decoders, allowing improved recovery rates and remanufacturing processes and useful life of equipment. This solution has been recognized by companies such as Gartner or Forbes for its innovation and development of a more efficient, faster and easier supply chain.
APOLO, for its part, improves efficiency in reverse logistics processes by using big data and analytics to optimize collection routes for uninstalled or inactive equipment at customer facilities or collection points. Finally, Telefónica has the GRETEL digital platform for the company’s waste management, allowing it to keep an accurate record within the group, to keep its end goal and to develop a strategy based on the circular economy and environmental sustainability.
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