Ericsson published a green financing framework to outline future investments in energy-efficient network technologies like 5G, 6G, and renewable energy.

The framework will enable the telecom network operator to issue what's known as Green Securities, which allow Ericsson to finance or refinance assets with the aim of transitioning to a low-carbon and environmentally sustainable society. Designed in line with current best practices and verified by S&P Global's second-party opinion provider CICERO Shades of Green, the framework will undergo third-party review post-issuance.

Many of the projects that will be funded through this framework fall into digitalization solutions, like those that upgrade legacy network technology or support technologies that reduce energy consumption by more than 35%. Ericsson's framework also denotes areas not eligible for Green Securities funding, like activities with an intentional use that pose social or environmental risks, such as extraction or production of fossil energy.

Ericsson's research found pre-5G digitalization solutions could limit global emissions by 15% by 2030, but 5G, IoT, and artificial intelligence (AI) will likely accelerate that transition. "Some modeling suggests an increase in 5% of the reduction potential in [the European Union] by 2030, solely by using 5G in industry use cases," the framework explained.

The operator noted ICT plays a crucial role in reducing emissions, even though it represents just 1.4% of annual global emissions. As network traffic demands continue to rise, designing enterprise services and networks that scale down energy use will help organizations achieve environmental targets across industries. M&A activity will also fall into this enterprise solutions category, as acquisitions "will be needed to position Ericsson" to aid the societal transition toward a net-zero emissions economy, according to the operator.

While enterprise sustainability is historically challenging and requires significant investment, it offers a valuable competitive advantage. Ericsson also touted its "technology leadership within mobile commutations technology is a cornerstone in our enterprise strategy, where utilizing the full decarbonization potential of ICT solutions in other sectors is one key driver of success."

The operator assessed the carbon footprint lifecycle of its portfolio and found more than 93% of the company's emissions are from the use of its products, including the fossil power used to generate electricity and run networks. Ericsson aims to reduce that figure by 50% by 2030.

The rest of Ericsson's emissions are due to extracting and processing resources, manufacturing, transportation of network components and hardware, and business travel.

With a commitment to be a net-zero emissions company by 2040, the operator plans to work with its high-emitting suppliers on setting emissions reduction targets aligned with limiting global temperature rise to 1.5°C, which will reduce the operator's scope 3 value chain emissions. Specific attention will be paid to suppliers of carbon hot spots like aluminum, diecasting, and electronic components.