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Sustainable, or Not So Much

Sprint appears to take sustainability seriously. The company has multiple programs, including free wireless device recycling and buy back, to promote waste reduction. In 2010, Newsweek ranked Sprint sixth among its “500 Greenest Companies in America.” It offers at least three different “eco-friendly” wireless phones made with materials like corn-based bio-plastic and lead-free paint. On a strategic level, according to Sprint’s website, the company’s headquarters in Overland Park, Kansas sources 80 percent of its power from a wind farm in Spearville, Kansas, which saves the equivalent of more than 146,000 barrels of oil per year.

But here’s the twist – according to an Associated Press report dated April 28, 2011, citing Sprint-Nextel, the company experienced a net loss of 114,000 subscribers and $439 million in the first quarter of 2011, continuing a net subscriber loss streak that dates back nearly four years. Though the company won more than 1.1 million subscribers to its pre-paid brands Boost and Virgin Mobile, Sprint chalked this victory up to, “cheap service plans.” So, Sprint may be the greenest of the bunch among major U.S. telecom operators, but the numbers show that its notable sustainability efforts aren’t necessarily translating into big customer wins in the marketplace.

O2’s UK Counterpoint

It is possible that sustainability and green business practices are more attractive to customers outside of the United States. O2 spokesperson, Sarah Taylor, shared data from a recent survey in which Telefonica UK (O2 is the mobile brand for this operating unit of Telefonica) found that 44 of its customers said that green business practices do in fact influence their propensity to buy mobile phones from a specific provider.

Taylor says that O2’s, “renewed drive on sustainability is coming direct from the top,” adding that CEO Ronan Dunne, “has made it his personal ambition to see O2 recognized as a UK leader on sustainability by 2012.” She says that O2s maintained ISO 14001 compliance since 1999 and that the company has had a sustainability taskforce as part of its, “governance structure” since 2009. She says CEO Dunne chairs this taskforce that meets every six weeks himself which consists of, “top management from the across the business” and drives O2’s sustainability strategy. To convert strategy to action, a sustainability working group made up of “middle managers” executes projects focused on, “anything from carbon reduction and green working to culture and communications, or sustainable stores,” Taylor says. She adds that O2 has partnered with Forum for the Future, a non-profit group focused on sustainability in business and government, to assess its performance independently.

In terms of customer facing activities, Taylor says that O2 has paid out nearly £15 million to consumers in an effort to recycle old mobile devices. She also says that while 44 percent of its customers take sustainability into account when purchasing mobile service, 11.5 percent of the customers O2 surveyed stated that its sustainability record, “would have a strong influence on them deciding to buy a phone from O2.” O2, she says, believes that customer expectations are increasing in regards to sustainability and that 15 percent of O2’s customers are aware of the consumer-facing sustainability grading system it launched in August 2010 while four percent of customers have already used it.

Finally, Taylor says that when it comes to sustainable business, “you have to remember there’s investments before revenues.” She says O2 has invested more than £3 million up front to achieve an 18 percent improvement in energy efficiency and, “carbon savings of over 30,000 tons.” These kinds of investments clearly make sense for O2 because the company has been able to demonstrate that sustainability is important to nearly half of its customer base, making a difference not only the expense side of the equation, but on the sales side as well.

Ultimately, environmental stewardship, green initiatives, and sustainable business practices are all good things. Anyone that doesn’t wish to protect the environment that all people share is free to leave the planet at any time. But O2 appears, thus far, to be a rare case where a telecom operator has actually been able to make a connection between its altruistic environmental efforts and tangible, top line business results. The general inability of other operators to make such a connection may be evidence that no connection yet exists, but more simply may result from a lack of measuring those specific relationships.