Monitoring sustainability: Incorporating ESG into ICT policy making and regulation
12.09.2025Introduction[1]
The consideration of environmental, social and governance (ESG) information has become increasingly important to investors, companies, policymakers, governments, stock exchanges, non-governmental organizations, consumers and other stakeholders. The analysis of any sector of the economy is no longer considered solely from a financial and operational sense but also encapsulates sustainability risks and impacts. Given this growing interest, ICT regulators should consider developing an ESG framework that measures the sustainability of the sector.
Many ICT regulators and policy makers already collect operational and financial data on the ICT sector. They also have regulations related to ESG such as e-waste, universal service, data privacy and child online protection among others. A formalized ESG framework would connect ICT regulator activities more visibly to sustainability of the sector, enhancing analysis and comparability.
ESG and the SDGs
It is useful to place ESG within the context of the United Nations Sustainable Development Goals (SDGs).[2] Agreed to in 2015, the 17 goals, 169 targets and 234 unique indicators set out the world’s vision for humanity and the planet. The SDGs are collected at a country level and indicators are tracked on a regular basis.[3]
ESG reporting is used to assess how sustainable companies are. Analysts also use ESG frameworks to highlight company contribution to the SDGs.[4] Corporate ESG disclosure is increasing. One SDG indicator measures the number of companies in a country publishing sustainability reports.[5] Over 9,000 companies published a sustainability report in 2023, a figure that has increased over 300% since 2015. Of these, over 500 were ICT companies. Regulators can leverage this information to assess how their sector is facilitating or hindering achievement of SDGs as well as compare the ICT sector to other sectors in the national economy or to ICT sectors in other countries.
Figure 1.1: Number of companies with a sustainability report
Source: https://unstats.un.org/sdgs/dataportal
Investor demand for ESG information
Investment management companies have made a concerted effort to link investment efforts to ESG parameters and commitments, particularly environmental ones. ESG reporting encourages long-term, sustainable, and resilient thinking, which attracts investors. Integrating an ESG framework into licensing and regulation will promote transparency, agility and data rich compliance.
Investment into any sector is primarily focused on creating value, and previously this value was defined through a financial prism. In recent years, there has been shifts towards promoting shared value that goes beyond just generating revenue. Share value is measured along six capitals: financial, manufactured, intellectual, human, social and relationship, and natural. Further empirical data finds that attention to ESG has a positive impact on a company’s bottom line. Research by McKinsey found that investors are willing to pay a premium for companies with attractive ESG strategies.[6]
Actions and resulting interactions, inherent to the three ESG factors, are closely related and interdependent on each other. Acting on each of the ESG factors has spillover effects and consequences in all areas: investments related to environmental sustainability produce effects on the social quality in which the company operates, as well as improving the internal dynamics of governance.
Opportunities with an ESG framework for the ICT Sector
Adopting an ESG framework offers opportunities for innovation and growth, fosters a positive investor outlook and ensures that sufficient effort is put towards the promotion of biodiversity, energy efficiency, social inclusion, and ethical governance practices. The adoption of an ESG framework further provides an opportunity to meet evolving customer expectations and to attract investors who recognize sustainable business as a driver of growth and development. Below are some highlighted opportunities that an ESG framework can create for the ICT sector:
Adopting a collaborative approach to realize the opportunities that the inclusion of an ESG framework can unlock for the ICT sector is imperative. The collaboration with industry stakeholders can foster greater transparency and an evidence-based approach to traditional social obligations, compliance frameworks and license terms and conditions. Furthermore, it is best practice that when implementing a framework such as the ESG framework, there is continuous monitoring and evaluation through implementation. Through the adoption of a collaborative approach this will set an agreed upon regulatory criteria for sustainability which the regulator can leverage to inform license conditions and social obligations. As part of the regulatory mandate to protect the consumer while balancing the economic sustainability of the industry; using an ESG framework will promote transparency for consumers while boosting investor confidence.
Unpacking ESG
ESG is a holistic framework that is premised on the principle that long-term sustainability depends on environmental, social and governance impacts.
Environment
Environmental criteria assess impacts on the natural environment, directly and indirectly. Environmental indicators include energy consumption, e-waste, network efficiency, carbon emissions and water use, amongst others. This includes all choices and actions aimed at maintaining a healthy and balanced relationship with the environment, such as responsible management of raw materials, water, air and vegetation resources.
ICT products and services can have a detrimental impact on the environment. Telecommunications networks, data centers and end-user devices use substantial energy resulting in Greenhouse Gas (GHG) emissions.[7] Data centers and ICT manufacturing consume notable amounts of water.[8] Digital devices that are not recycled contribute to e-waste. [9]
Social
Social criteria measure impacts on stakeholders including employees, customers, communities and supply chains. The principle behind the social criteria is that an organization is an integral part of the societal context in which they affect and by which they are affected. In relation to a company’s employees, issues such as safety, equity and diversity are relevant. Upholding human rights among workers and business relationships is also important.
In the context of the ICT sector, social issues such as digital inclusion, affordability, skills and consumer safety are important. Users of ICT services need to be safeguarded from harmful practices and their data protected. Children should be safe online.[10]
Governance
Governance encompasses company approach to ethical leadership, compliance and transparency. Measurement areas include accountability for sustainability, risk management, composition of the board of directors, tax and lobbying policy, anti-corruption controls and ethical behavior. Governance indicators tend to be generic across sectors. A study of digital companies found that having a corporate social responsibility (CSR) committee, non-executive members of the board, and the CEO’s past experience and continuity had positive and significant effect on ESG ratings. The presence of non-executive members and representation of women in boards and management had positive but marginal effect on ESG scores.[11]
Box 1.1: Difference between ESG and CSR
While both Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) are related to an organization’s sustainability efforts, the key differentiator is that CSR focuses on a company’s voluntary commitment to digital inclusion, while ESG is a framework for measuring and assessing a company’s sustainability performance through quantifiable metrics across environmental, social and governance factors. |
Regional and national ESG reporting requirements
Several regional and national ESG reporting requirements exist. These are useful to inform ICT sector regulators and policy-makers about the type of information collected, where data might be already available for their jurisdiction and potential points of collaboration.
The EU’s Corporate Sustainability Reporting directive was enacted in December 2022.[12] The directive lays out the EU’s commitment to the SDGs and the need for comparable and timely sustainability information to track progress. All companies of a certain size operating in the region are required to publish ESG information.[13] The reporting standard provides information about the specific type of information to be collected for each ESG category (Table 2.1).
Table 3.1: EU Sustainability reporting standards
Some national governments mandate reporting on specific ESGs. The Streamlined Energy and Carbon Reporting Regulation (SECR), introduced in 2019, mandates that businesses of a certain size incorporated in the United Kingdom report on their energy and carbon emissions every year. The government provides guidance on compiling the data.[14] Company disclosures are publicly available on the Companies House website.85
The United Kingdom also requires any employer with 250 or more employees to report gender pay gap data.
Table 3.2: Gender pay gap, main UK telecom companies, 2024
Note: Positive percentage means women earn less than men in pay or bonuses.
Source: Gender pay gap service (https://gender-pay-gap.service.gov.uk/compare-employers/2024).
The Workforce Gender Equality Agency (WEGA), an Australian government agency collects employee diversity data based on the Workplace Gender Equality Act 2012.[15] Aims of the act include promoting and improving gender equality, removing barriers to full and equal participation in the workforce, eliminating employment related gender discrimination and improve the country’s productivity and competitiveness through advancement of gender equality in the workplace. The data tracks and measures these goals over time. Metrics include women share of total employees, management and board members as well pay gaps. The requirement is applicable to companies with over 500 employees. Data have been compiled for the major telecom operators in Australia to generate country results.
Table 3.3: Gender equality in Australia, 2024
Source: https://www.wgea.gov.au/
A number of stock markets also require publication of ESG data. According to the Sustainable Stock Exchanges Initiative some 41 stock markets covering over 30,000 companies require ESG reporting in order to list their shares.[16] One example is the Stock Exchange of Thailand (SET) which requires companies to disclose ESG information in order to list. SET notes the justification for the requirement:
… a company’s non-financial information, such as its vision, mission, strategy and risk factors, and especially environmental, social and governance (ESG) information, are as essential for investment decisions as financial information. It will not only help stakeholders to understand the various dimensions of a company’s operations in a more holistic way, but also increase stakeholders’ confidence in the long-term potential of the business.[17]
SET’s Sustainability Reporting Guide lists the metrics to be collected with definitions as well as links to international reporting standards.
ESG inspired policy
Materiality
Monitoring the ICT sector from an ESG perspective requires understanding of the entire digital technology value chain and interdependencies. Data on the main ICT subsectors–telecommunications networks, data centers, cloud operations, consumer devices and platforms–is necessary to inform overall ICT sector situation. A national policy position that supports the use of an ESG framework for reporting and compliance would contribute valuable data in quantifying the required efforts to abate climate change, strengthen social cohesion and encourage good governance.
One of the first steps is to prioritize relevant ESG topics. This is done through a materiality analysis where stakeholders (e.g., employees, customers, business partners, government, local communities, shareholders) are surveyed as to what issues are most important to them. This is compared to the relevant topics that the company considers important, generally in terms of their financial impact. For instance Spanish telecommunications operator Telefónica found ten topics that were of high importance to both the company and stakeholders (Figure 4.1).
Figure 4.1: Telefónica’s material issues, 2023
Source: Telefónica. 2024. How to Approach Double Materiality in Business. https://www.telefonica.com/en/communication-room/reports/telefonica-and-double-materiality-how-to-implement-it-in-business/
In order to develop a country level ESG materiality matrix, ICT regulators could review materiality assessments prepared by digital companies operating in the country. They should also consult with stakeholders about which topics they consider to be highly material.
Key considerations for an ESG driven ICT policy
The considerations set out below, are key opportunities that an ESG framework can deliver in policy making and future planning for digital technologies and the ICT sector.
Considerations |
|
Government oversight and engagement |
Governments play a fundamental role in upholding sustainable development. Engaging with digital companies ensures accurate ESG reporting and effective targets. High level recognition of the importance of ESG is essential for implementing necessary policies and regulations |
Identify type of stakeholders affected and whether the impact is positive or negative |
|
Identify specific metrics to be collected |
|
Data driven decision making |
Access to ESG data reported by licensees in a common format is crucial for government to make informed policy decisions, set realistic targets, and monitor progress. Collaboration across government entities is vital for maximizing synergies to use the data for analyzing industry sustainability. |
Data disclosure and assessment |
Addressing sustainability in the ICT sector requires data disclosure, aggregation and assessment. The ICT regulator can play a key role in this process, but capacity building will be needed. |
Technology transitions and inclusive planning |
Technology transitions in the ICT sector have the potential to improve services and reduce energy, but careful planning is required to ensure inclusivity and prevent the marginalization of vulnerable populations. Frameworks such as the Just Transition[18] framework can guide this process. Balancing sector growth with emission reduction involves planning transitions, such as decommissioning older networks, while also considering the impact on coverage, device costs and the conversion of machine-to-machine devices to the Internet of Things. |
Regulatory modifications and collaborations |
Regulations and financial incentives |
Key policy takeaways
While reporting on environmental indicators may be a new practice and one that is not typically led by the ICT Ministry or regulator; the indicators and considerations above have made a case for the policy maker to begin including this reporting in its policy prescripts. Social indicators and obligations are far more common, especially in developing countries that are still working towards universal service and access. While the policy provision for social obligations exists, often the impact and measuring of these social obligations is limited. Lastly, governance has over the past few years taken center stage, with investors considering it as a key investor criterion. Building governance indicators and imperatives into national policy can foster the confidence that investors are looking for as it sets the tone for doing business in that country. By designing a policy inspired by the ESG framework, it will encompass all fundamental priorities expected from a policy such as, sustainability, inclusion, innovation and protection.
Access to quantifiable data on emissions, social obligations and governance, using a common approach and format, equips government to make informed policy decisions. A data driven approach is instrumental to establishing realistic targets–nationally, regionally and globally–to formulate effective regulations and closely monitor progress.
Collaboration across government entities responsible for ICT, energy, economic development, trade and industry, and the environment is important to maximize the benefits from these efforts. Given the link between ESG and SDGs it is also important to liaise with the agency responsible for sustainable development as well as the national statistical agency, stock market and local UN office,
ESG driven regulation
It is important that ICT regulators only begin the implementation planning and mapping process within the ESG framework once there is clear policy commitment and mandate given to them. It is preferable that the ESG regulatory framework gets political championing from the highest level of government, through collaborative policymaking as this will contribute to investor assurance and industry participation.
This section reviews existing international ESG standards, examples of ESG data collection, frameworks used to encapsulate ESG metrics and guidelines for regulators on reporting on the country’s ICT sector ESG performance.
Box 4.1: Anatel’s ESG initiatives
Brazil’s National Telecommunications Agency (ANATEL) has a number of iniatives supporting the use of ESGs. Institutional Culture & Governance • Decision-making aligned with the 2030 Agenda for Sustainable Development • Sustainable Digital Communications Project ESG Certification ESG Requirements in Spectrum Auctions • ESG requirements will apply to bands like 6425–7125 MHz and 700 MHz, crucial for 5G and Wi-Fi expansion (by December 2025) • Bidders must present certifications or public commitments to ESG practices • Companies will be required to present annual compliance reports • Non-compliance may result in contractual penalties or exclusion from future tenders |
Importance of standards
A number of reporting frameworks exist to standardize corporate ESG disclosure and enhance comparability (Figure 5.1). The most widely adopted are the Global Reporting Initiative (GRI, https://www.globalreporting.org) and the Sustainability Accounting Standards Board (SASB, https://sasb.ifrs.org). In addition to common ESG indicators applicable to any type of company, GRI and SASB also feature sector-specific disclosures. For instance SASB’s Technology & Communications category includes six ICT industries: Telecommunications Services, Hardware, Internet Media and Services, Semiconductors, Software and IT Services and Electronic Manufacturing Services & Original Design Manufacturing.[19]
Figure 5.1: ESG disclosure milestones over the past 30 years
Source: Telefónica. 2024. How to Approach Double Materiality in Business. https://www.telefonica.com/en/communication-room/reports/telefonica-and-double-materiality-how-to-implement-it-in-business/
The SDGs, typically monitored at the country level, can also be considered a reporting standard. There are seven SDG indicators specifically related to ICTs although many other SDG indicators are relevant to ICT sector ESG monitoring (Table 5.1). Some companies use the SDGs as a reporting framework. In addition, the GRI[20] standards can be directly linked to the SDGs enhancing its analytical utility.
Table 5.1: SDG indicators directly related to ICTs
Source: https://www.itu.int/en/ITU-D/Statistics/pages/intlcoop/sdgs/default.aspx and https://unstats.un.org/sdgs/indicators/Global-Indicator-Framework-after-2025-review-English.pdf
Many companies report using international standards. For instance, as of August 2025 almost 600 Technology and Communications companies had ESG reports incorporating the SASB standard.[21] Reporting standards are also used by organizations for the comparability of indicators used in their ESG publications (See 5.3).
Regulators can leverage existing standards, reporting frameworks and monitoring indicators which provide internationally comparable data and ease the implementation burden. Using internationally accepted standards would reduce compliance costs for the ICT sector and result in more rapid implementation of an ICT sector ESG database for the country.
ESG data readiness
Data is essential for ICT regulators to shape evidence-based reporting frameworks for sustainable development of the sector as well as supporting data driven policy making. To collect the required data, the regulator must reach out to digital companies in the market. These companies are often publicly listed and/or have investment commitments that require them to report on their ESG priorities and objectives. This serves as a good starting point for the regulator without straining its resources. Given the prevalence of company ESG data, the regulator could easily aggregate indicators at a country level. ITU followed this approach to compile climate data for 30 countries.[22]
Many ICT regulators already disseminate data for the electronic communications sector and thus have the skills for manipulating statistical data. Some of these indicators such as penetration rates, network coverage, employment and pricing are already related to ESG concepts.
Some regulators have gone further and are compiling and disseminating specific ESG indicators typically relating to climate. For instance ICT regulators in Belgium[23], France[24], Norway[25] and Rwanda[26] have published reports with climate indicators for their ICT sector. Apart from the ICT regulator, statistical agencies and other sector regulators publish climate-related data relating to the ICT sector. For instance data collected by Ireland’s Central Statistical and Singapore’s Energy Market showing continuing rises in electricity consumption by the ICT sector has caught the attention of policy makers resulting in regulatory measures to stem the increase.[27]
The common limitation with data collection in developing nations is typically due to capacity constraints in the regulator and the statistics bureau to collect and process the data. Here ICT regulators can liaise directly with digital companies that publish ESG reports as well as partner with energy regulators, stock exchanges, statistical agencies and others to gather baseline data. These varied data sources can provide the ICT regulator with information to create a baseline report and develop a reporting framework that would begin to provide a more holistic picture of the ESG priorities and begin to make data driven policy recommendations and regulatory frameworks.
Establishing an ESG reporting framework
In establishing a framework for the reporting on ESG indicators, it is important that the regulator collaborates with all relevant stakeholders. There needs to be a clear set of objectives and impact indicators that are agreed upon by all stakeholders involved.
The second phase of establishing a reporting framework is ensuring the availability of data as some data may not reside with the ICT regulator. Here it is useful to refer to digital company reports as many are likely to already be disclosing ESG indicators based on international standards.
A method of categorizing the indicators needs to be established. Here regulators could simply use environmental, social and governance as the topics. Or they could adapt frameworks developed by others.
Mobile industry association GSMA’s ESG Metrics for Mobile Benchmarking features four categories (environment, digital inclusion, digital integrity and supply chain) and 13 indicator topics (Table 5.2). Most are based on international reporting standards such as GRI and SASB.
Table 5.2: GSMA ESG Metrics for Mobile Benchmarking framework
Source: GSMA. 2024. ESG Metrics for Mobile. https://www.gsma.com/solutions-and-impact/connectivity-for-good/external-affairs/wp-content/uploads/2024/06/ESG-Metrics-for-Mobile-June-2024.pdf
The World Benchmarking Alliance (WBA) publishes reports on the ESG performance of digital companies. The framework WBA uses for its Digital Inclusion Benchmark consists of six categories (Access, Skills, Use, Innovation, Sustainable Value Creation and Social) and 18 indicator topics (Table 5.3). The benchmark also indicates which indicators are aligned with the SDGs.
Table 5.3: WBA Digital Inclusion Benchmark framework
Area |
Focus |
Indicators and standards |
---|---|---|
Access |
This measurement area looks at the extent to which a company helps to make digital technologies widely available, affordable and accessible. While some companies contribute to enhancing digital access through their business practices, best practice involves going beyond that and reaching people who lack digital access, typically from low-income groups and living in areas where the potential revenues from providing digital access are often lower than the cost of providing it. |
Digital technology access SDG 5.b; SDG 9.c.1; SDG 17.8.1 School digitalisation SDG 4.a.1 Inclusivity for people with disabilities SDG 10.2 |
Skills |
A lack of digital skills remains a significant barrier to digital inclusion. Vulnerable groups, such as women and girls, those with limited income, older adults and people with disabilities, are disproportionately affected by gaps in digital literacy. Addressing these disparities requires targeted efforts to provide accessible training and support for these groups, empowering them to participate fully in the digital economy and society. Moreover, as technology evolves, more advanced digital skills are increasingly essential for many jobs. For workers, this means continuous upskilling to stay relevant in a rapidly changing job market. |
Digital literacy SDG 4.4.1; SDG 5.b Digital skills development SDG 4.4.1 Workforce resilience GRI 404 |
Use |
This measurement area covers company practices that ensure safety of information assets, safeguard personal data, respond to security threats and respect child rights in the digital environment. While many factors affect use of digital technologies, trust is one of the most critical. Users need to be confident that digital technologies are safe and secure. Data security and customer privacy are considered highly material for digital companies. |
Cybersecurity SASB TC-SI-230a.2; SDG 9.1 Personal data GRI 418-1; SASB TC-IM-230a.1; SASB TC-TL-220a.4; SDG 16.10 Child rights in the digital environment SDG 3.4; SDG 16.2 |
Innovation |
Innovation in goods and services is a critical enabling mechanism through which a company can aid both digital technology access and use. Innovation also drives the creation of new digital technologies with cross- cutting potential to accelerate achievement of the SDGs. This measurement area looks at a company’s support for open standards and open source technology that help drive innovation, investment in bottom- up innovation, implementation of ethical AI and diversity and inclusion in research and development (R&D). |
Open innovation and tech ecosystem support SDG 8.3; SDG 9.b; SDG 17.16 Ethical artificial intelligence SDG 10.3 Diversity and inclusivity in research and development GRI 405; SDG 5.5.2; SDG 8.3; SDG 9.b |
Sustainable value creation |
Many digital companies generate substantial economic value by offering digital goods and services worldwide, often through minimal local infrastructure, while benefiting significantly from business and consumer interactions in each market. This approach can create economic value for companies, but it also raises questions about their contributions to local economies through taxes, job creation and investment. Additionally, digital companies’ activities contribute to greenhouse gas (GHG) emissions, which must be measured to mitigate environmental impacts. Resource efficiency, including energy and water use, is equally important. |
Economic contribution GRI 201-1; GRI 203-2; GRI 207-4; SDG 7.1; SDG 8.3 Greenhouse gas emissions CDP 5.5, 7.5, 7.6, 7.7, 7.8, 7.10, 7.11 (2024a); GRI 305-1, 305-2, 305-3 (2024); SDG 13.2 Resource efficiency GRI 302; GRI 303; SDG 6.4; SDG 7.2.1 |
Social |
The Social Benchmark assesses whether companies are taking steps towards fulfilling societal expectations to foster a more equal and inclusive world. This methodology outlines 18 fundamental core social indicators which assess companies’ contribution to a systemic transformation that leaves no one behind. Achieving the UN Sustainable Development Goals (SDGs) requires companies to engage in socially responsible business conduct by respecting human rights, providing and promoting decent work, and acting ethically. |
Respecting human rights GRI 103-2; GRI 412-1 and 414-2; Providing and promoting decent work GRI 403-9; GRI 405; Acting ethically GRI 207; GRI 205; GRI 415 |
Source: World Benchmarking Alliance. 2024. The Methodology for the 2026 Digital Benchmark. https://www.worldbenchmarkingalliance.org/research/the-methodology-for-the-2026-digital-benchmark/
The World Economic Forum (WEF) provides a generic categorization applicable to any type of industry. Its Stakeholder Capitalism framework features five pillars (People, Planet, Prosperity Governance) and 22 core indicators.
Table 5.4: WEF Stakeholder Capitalism framework
Note: Excluding expanded metrics.
Source: World Economic Forum. “Explore the Metrics.” https://www.weforum.org/stakeholdercapitalism/our-metrics/
ESG Reporting Priorities
While there is a myriad of reporting standards and frameworks, and most vary only slightly from one region to another, there is consensus on the basic principles that need to be part of ESG reporting, and these can be adapted for the ICT sector by the regulator. The guiding checklist below can be adapted to suit the Regulator’s national context and the ESG policy that has been adopted:
Reporting Template |
|
Policy and Regulatory Overview and External Environment |
This section provides a snapshot of the policy landscape, the national and regional commitments, the mission of the policy positions and the context in which it is being implemented. This may include insights into economic conditions, sector performance, regulatory changes and market trends. |
Defining the ESG policy and regulatory framework |
This section outlines the ESG policy in detail, the future intended outcomes, the monitoring measures and the impact. This section also connects the dots between policy imperatives and regulatory implementation; the resources required, and the roadmap adopted. |
Opportunities and Risks |
This section will highlight any opportunities and risks that could affect implementation and the value creation mandate. |
ESG Performance |
The reporting in this section will be guided by the indicators that the policy and regulations have adopted. The themes of environmental, social and governance obligations would guide this reporting section. |
Measuring Impact |
Constant monitoring is imperative, it is futile to conduct monitoring and evaluation at the end of the policy period; constant monitoring allows for changes to be made when implementation proves to be a challenge. This section serves as a constant monitoring and evaluation feedback on the implementations and the performance on the ESG indicators. This section is very important, and this is where evidence-based regulation takes shape. The indicators set out in the table above form the baseline for monitoring the impact. |
Future Outlook |
This last section not only lays out the plans for the upcoming implementation period but also considers the performance and impact of the reporting period and raises any changes that need to be implemented to still align to the objectives of the policy. |
Conclusion
The increasing adoption of ESG criteria by investors demonstrates the importance of measuring sustainability risks and challenges. The ESG framework expands traditional financial reporting to consider the wider impacts of companies on sustainable development.
This document has provided many references to guide ICT regulators in developing an ESG framework and the integration of ESG into policy and regulation. This will help ICT regulators to not only communicate to investors the government’s commitment to sustainable growth of the industry but also provides market certainty and policy assurance to the ICT sector. Regulatory reporting should be designed to leverage the existing globally accepted ESG standards without adding further compliance obligations.
Obtain ESG mandate: Having high level political support for the implementation of an ESG framework is important. The ICT regulator, in consultation with other stakeholders, should lay out the rationale for using an ESG framework to monitor the sustainability of the sector.
Collaborate and co-build the data collection with other stakeholders: Collaboration is key to successful development of an ESG framework. Stakeholders include other government agencies including the national statistics agency, stock markets, research institutions, industry players and the public. This phase of dialogue and engagement allows for the stakeholders to become familiar with the process and contribute to knowledge exchange. This will facilitate the development of an ESG framework and identification of priorities based on a materiality exercise. It is important to identify the digital companies operating in country already publishing ESG reports. This includes subsidiaries of multinationals who may not have their own ESG report but where disaggregated country data may be found in the group’s reporting.
Base data collection on international standards and methodologies already used and recognized: Use existing indicators and methodologies to provide a baseline; this will also maximize the response rates. Begin with key indicators that are based on international standards (e.g., GRI, SASB) and national standards (e.g., stock exchange ESG guidelines). The regulator can gradually expand the list as capacity grows and familiarity with the process increases. Note that digital companies in the country may already be using such standards in their sustainability reports which will ease the data burden and comparability of the data.
Begin with the telecommunications industry: Many regulators already collect data from telecommunications operators. Anecdotal evidence suggests that regulators could collect ESG data from telecom operators without the need to change any laws or regulations. Starting with the telecoms sector would likely not require many more resources and would allow the regulator to build up capacity before expanding ESG data collection to other digital industries. As the regulator is already collecting data it would have the expertise for collecting statistics and it would not be a giant leap to collect ESG data. Note that is not necessary to collect from every possible company. It is common practice with government or stock exchange sustainability reporting rules to specify the parameter of companies obliged to provide data. When compiling at a sector level, a rule of thumb could be companies whose combined market share is at least 80%.
Gradually expand to other ICT industries: It is essential to eventually cover more segments of the ICT sector. While telecommunications is typically the biggest ICT industry and most likely has the data available, it is critical to have a holistic picture of the digital ecosystem and collect from all industries that form part of the ICT sector. Regulators should create a topology of their respective ICT sector to guide prioritization of data collection.
Develop in-house ESG skills: Training is critical for the collection, processing of data, as well as crafting policy and regulatory priorities. Expertise will be needed to understand the impact of the data, new issues to consider in the ESG categories, define the right indicators and be able to dialogue with stakeholders.
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This article was developed under the coordination and guidance of the Regulatory and Market Environment Division & Climate Change and Emergency Telecommunications Division, Telecommunication Development Sector (ITU-D), ITU.
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Large undertakings that are public-interest entities with an average number of employees in excess of 500, and to public-interest entities that are parent undertakings of a large group with an average number of employees in excess of 500 on a consolidated basis, respectively. Therefore, third-country undertakings which generate a net turnover of more than EUR 150 million i ↑
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