International Telecommunication Union Toolkit on General Specifications and KPIs Daniela Torres Telefónica

July 2011 Committed to Connecting the World Daniela Torres (Telefónica) Manuel Usandizaga (Telefónica) Piero Castoldi (Scuola Superiore SantAnna, Pisa) Raffaele Bolla (University of Genoa/National Interuniversity Consortium for Telecommunications) Hans Otto Scheck (Nokia Siemens Networks) Susanna Kallio (Nokia Siemens Networks) Daniela Torres (Telefónica) Manuel Usandizaga (Telefónica) Piero Castoldi (Scuola Superiore SantAnna, Pisa) Raffaele Bolla (University of Genoa/National Interuniversity Consortium for Telecommunications) Hans Otto Scheck (Nokia Siemens Networks) Susanna Kallio (Nokia Siemens Networks) Contributors & Collaborators 2 THANKS: Cristina Bueti (ITU) Erica Campilongo (ITU) THANKS: Cristina Bueti (ITU) Erica Campilongo (ITU)

July 2011 Committed to Connecting the World Purpose: This document targets Information and Communication Technology (ICT) organizations and companies. It focuses on: The importance to establish Key Performance Indicators for environmental management in the ICT Industry An assessment of recommended KPIs for global environmental management, risk reduction, decision making and reporting. The importance of establishing and follow up targets to improve environmental sustainability of the ICT Sector by creating business value. 3

July 2011 Committed to Connecting the World Document Content Definitions of Environmental KPIs Environmental KPIs and ICT Organizations Suggested Process for KPIs Definition Target Definition Check list Conclusions - Suggestions 4

July 2011 Committed to Connecting the World ICT Organizations Subsectors to be considered in order to identify KPIs for ICT organizations: ICT telecom operators: Networks operation and provision of telecommunication services such as telephony or data communication accesses, e.g. Telefónica, Vodafone, AT&T, China Mobile, etc. ICT manufacturers: ICT technology and infrastructure developers and distributors, e.g. ALU, Nokia, Samsung, Sony, Ericsson, Nokia Siemens Networks, IBM, Huawei, Toshiba, etc. ICT software developers: Software programing for distribution and customer use from mobile or home devices, e.g. Google, Apple, Microsoft, etc. 5

July 2011 Committed to Connecting the World ICT Environmental Impacts First order effects (or the environmental load of ICTs): the impacts created by the physical existence of ICT and the processes involved; e.g. GHG emissions, e-waste, use of hazardous substances and use of scarce, non-renewable resources, which together represent the environmental load related to ICT goods, networks and services over their life cycle. Second order effects (or the environmental load reduction achieved by ICTs): the impacts and opportunities created by the use and application of ICTs; e.g. travel substitution, transportation optimization, working environment changes, use of environmental control systems, use of e-business, e- government, etc. the Enabling Effect which represents the possible greenhouse gas (GHG) emissions reduction by five major opportunities: dematerialization, smart motor systems, smart logistics, smart buildings and smart grids. 6

July 2011 Committed to Connecting the World Definition of Environmental KPIs Commonly used environmental KPIs are: energy consumption, from fuel use or electricity consumption, or use of renewable energy; GHG emissions depending on the scope, or by type of gas; waste generated; waste recycled; water used; and recycled, hazardous materials used, etc. 7 A Key Performance Indicator (KPI) is a metric or measure used to quantify and evaluate organizational performance in relation to the meeting of the targets and objectives.

July 2011 Committed to Connecting the World Examples of Environmental KPIs by Global Organizations or Initiatives Carbon Disclosure Project (CDP) Dow Jones Sustainability Index (DJSI) GHG Protocol Corporate Standard Global Reporting Initiative (GRI) ISO ISO ITU – Study Group 5 International Electrotechnical Commission (IEC) European Telecommunications Network Operators Association (ETNO) European Telecommunications Standards Institute (ETSI) The Green Grid GSMA 8

July 2011 Committed to Connecting the World In order to build up KPIs based on organizational needs: 1. identify types of KIPs desirable for the organization, based on the specific needs and business reality; 2. collect the inputs needed for the KPIs; 3. put in place verification to ensure that the KPIs meet quality expectations in terms of decision-making. 9 Suggested Process for KPIs Definition KPI definition Define the needs KPI build up Analysis and target setting

July 2011 Committed to Connecting the World 1. identify types of KIPs desirable for the organization, based on the specific needs; Relevant characteristics that apply that apply when choosing KPIs: Relevance Measurability Uniformity KPIs can be constructed in different ways: Absolute/relative Direct/indirect Positive/negative Local/global Suggested Process for KPIs Definition (cntd) 10

July 2011 Committed to Connecting the World Suggested Process for KPIs Definition (cntd) Identify a responsible group and/or dashboard Identify the organizational and geographical boundaries Identity key actors Have a reliable database or data storing software to store and/or manage data Establish a period of data gathering Identify data/KPIs and their boundaries collect the inputs needed for the KPIs;

July 2011 Committed to Connecting the World Suggested Process for KPIs Definition (cntd) Why: Reduce data uncertainty Minimize errors in data gathering Meet investors expectations Allow a better decision-making Processes: Internal verification process Comply with ISO External verification process Third party Comply with ISO put in place verification to ensure that the KPIs meet quality expectations in terms of decision-making

July 2011 Committed to Connecting the World Target Definition Eco-efficiency targets ICT enabling effects targets Communication targets 13 One of the objectives of quantifying environmental performance through KPIs is the establishment of environmental targets. There are 3 main types of ICT-related environmental targets:

July 2011 Committed to Connecting the World Checklist example Alignment of environmental and business strategies in the short and long term 2. Definition of environmental aspects to be assessed (waste, energy, materials, GHG, etc.) 3. Identification of primary input value of the environmental aspect identified 4. Establishment of relevant KPIs for environmental performance management 5. Creation of a standardized process for data gathering and KPI build up 5.1 Identify a responsible KPI data group to carry out the process. 5.2Identify organizational and geographical boundaries 5.3 Identify key data managing actors. 5.4 Have a reliable database or data software to store and/or manage the data. 5.5 Establish time periods for data gathering. 6. Definition of environmental targets 7. Definition of activities and programs to meet the targets 8. Follow up targets and improve your environmental performance

July 2011 Committed to Connecting the World Conclusions Key Performance Indicators can help: Manage ICT environmental data in a more efficient and sustainable way Compare ICT environmental data of similar companies Facilitate decision making and effective resource allocation Improve the performance and efficiency of the company Reduce costs, while reducing environmental negative effects 15

July 2011 Committed to Connecting the World Suggestions The variety of environmental KPIs and targets defined by ICT companies suggests: need for global standards and methodologies that could help companies defining KPIs and improve their environmental performances; Some environmental issues have been neglected: need for information on KPIs to manage electric and electronic waste in ICT companies, and also in the provision of ICT products and to final customers. 16

July 2011 Committed to Connecting the World More information Contact: Cristina Bueti Daniela Torres 17