GS Sustain: Telecoms - The Fibre & 5G Decarbonisation Debate
Goldman Sachs Research analysts see fibre and 5G as critical technologies necessary to reducing the Information and Communications Technology (ICT) sector's overall carbon footprint and enabling low-carbon technologies across the broader economy, which we believe remains underappreciated by investors today, as evidenced by Diversified and Wireless Telecoms at -15% and -24% underweight in ESG funds today. GS Research analysts see three factors that could shift this sentiment, such as: 1) greater recognition of direct energy efficiency improvements of fibre and 5G vs. existing technologies; 2) fibre and 5G as critical enablers for scaling the digital economy, supporting additional indirect carbon benefits via smart grids and other Internet of Things (IoT) applications; and 3) greater clarity for Telecom's eligibility under the EU Taxonomy, which could see fibre and potentially 5G as aligned (green), serving as a key catalyst for recognition of the sector's low carbon contribution in the years ahead.
