The Telecommunications sector includes fixed-line and wireless telecommunication networks for voice, data and high-density data. Together, the wireless and integrated sectors have a market cap of $167.8 billion (New York Times 2011).
Physical Exposure Risk. This industry manages a vast physical network and is therefore vulnerable to the physical impacts of climate change.
- More frequent and severe weather events can damage infrastructure, such as telephone poles and high altitude communications platforms;
- Flooding can affect the ground stability and buried cables;
- Hotter temperatures would require more energy to power air conditioning for data centers; and
- Changes in precipitation can affect mobile phone signals(Engineering the Future 2011).
Policy & Regulatory Risk. This is a low risk for the industry, but the industry will be affected indirectly by high energy prices.
Reputational Risk. The industry is a relatively low emitter of GHGs, although it has been in the news lately for the energy usage of its data centers. In April 2011, Greenpeace named Apple, Twitter, and Facebook as having the ‘dirtiest’ data centers, that is, they are powered by coal-based energy (Albanesius 2011).While this won’t have a major effect on consumer sales or usage, it does reflect negatively upon their overall brand value.
Competitive Risk. The industry needs to consider mitigation and adaptation measures for its physical network and account for climate change in future planning. The industry may actually benefit greatly in a carbon-constrained world. For example, telecommuting and teleworking for workplaces that are looking to reduce transportation miles and be more sustainable are growing more popular. The industry will also be central in the development of the smart grid, which would help utilities and consumers track, communicate, and reduce energy usage (Llewellyn 2007).