Ambitious ESG targets for digital infrastructure are achievable with the right tools: space and satellite

Digital infrastructure’s greatest contribution to the transition to a sustainable global economy lies in its critical role as the conduit for other sectors’ sustainability improvements. But it also needs to look at its own direct impacts, risks and opportunities, especially as regulatory requirements and social pressures assert themselves. The most important ESG risks and challenges include: energy intensity and carbon footprint, data privacy and security, impact on local communities, labour practices, as well as governance and reporting.

Sustainability initiatives can serve as a powerful driver of innovation, business transformation and growth. They have the potential to shape evolving markets, driving positive change across the sector.

This article is the last in our series of five, and focuses specifically on space and satellite telecoms. It presents a selection of the sustainability initiatives that can help investors in, and operators of, satellite assets outperform their peers. All of these articles are based on research from Analysys Mason’s dedicated sustainability research team, and draws on our recent client project work.

The space sector is seeing robust growth but attracts significant criticism for the carbon cost and pollution of satellite launches and the increasing problem of space debris. There are also concerns over privacy and surveillance, and governance challenges related to transparency and ethics. The following initiatives are among the most effective for operators seeking to make their digital infrastructure fit for the future:

Connect the unconnected and crisis management: With approximately one third of the world’s population still without internet connection, the satellite industry is well positioned to address one of the more substantial challenges to economic growth. Satellite services help to bridge the digital divide by offering affordable connectivity to the most remote and inaccessible areas. This connectivity extends to disaster recovery, where satellite imagery of natural disasters, mission-critical communications and telehealth offer significant potential.

Optimise teleports: Teleports are ground-level hubs that connect satellites in various orbits with terrestrial telecoms networks. As the satellite industry begins to move towards low Earth orbit satellite technology, demand for teleports is set for growth. Providing shared ground segment as a service for multiple operators, in particular for new players, minimises infrastructure and building works, and reduces day-to-day operational impacts on the environment whilst delivering a significant opportunity to capture revenue.

Limit debris in space: Active debris removal (ADR) services remain at an early stage of development. However, there are growing opportunities for space players to engage with the topic (e.g. via promotional campaigns) in a way that signals sustainability intentions to shareholders and potential employees as well as shaping future market developments. Opportunities in the ADR sector are explored in our report on In-orbit satellite services, 7th edition.

Drive innovation and re-use: In a sector not known for its environmental credentials, several innovative developments to improve reusability have emerged. Starlink’s reusable rocket, the Falcon 9, is a concept that has already been proven, and the European Space Agency’s Themis project is developing a rocket prototype focused on reuseable technology. The extent of the environmental benefits has yet to be seen, but these pioneering developments signal the level of ESG-related innovation and ambition in the sector. More detailed analysis of how space companies are building ESG into their strategies can be found in A re-think on ESG for the space sector.

Strengthen cyber security: The growing challenges related to data security in the telecoms, media and technology (TMT) sector are provoking louder calls for new and stronger protective measures, which are becoming an increasingly important element in ESG activity and standardisation. With greater take-up of artificial intelligence (AI) tools comes an increase in concern over potential new risks, but enhanced engagement with cyber security should support progress while minimising risk. For the space and satellite industry, which offers a variety of high-sensitivity services (notably for the military and intelligence services), this is especially important. By developing robust and forward-looking ESG strategies, the satellite communications industry can build on the growing protections it already offers, and thereby position itself to address evolving stakeholder concerns and further mitigate future risks.

More details on these and other developments in the space and satellite industry – with a focus on the different stakeholders – can be found here.

The telecoms industry has always thrived on innovation, and finding creative solutions to technical questions. The increasing pressure to find sustainable paths for growth offers new opportunities for that innovation and creativity.

Analysys Mason is the leader in telecoms-related ESG analysis and consulting. We operate at the nexus of digital infrastructure and sustainability. To speak to one of our experts, get in touch.