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Inrate Study: Sector Analysis on Communication

This study explores the main environmental and social issues related to companies in the Communication Sector as well as the relevant fields of action with regards to a sustainable development. Furthermore, material sustainability themes such as data usage, energy consumption as well as anticompetitive behaviour are discussed in terms of environmental, social and governance (ESG) risks and opportunities.

Communication is a human need, which is fulfilled by a variety of complementary products and services
provided by the Communication Sector. Communication technologies have seen a rapid growth in the last decade and we have entered an age in which data is considered “the new oil”. The transition to the information age has been characterized by digitalization efforts and disruptive technologies that fundamentally changed the way people communicate and access information. Facilitated through
innovative solutions and the expansion of the network infrastructure, new business models have emerged. The Communication Sector exerts a high degree of influence on society, which presents both challenges (e.g. data privacy, information quality and energy consumption) and opportunities (e.g. social inclusion, decarbonization).

Numerous companies potentially produce a positive net sustainability impact by offering products and
services that substitute traditional activities (e.g. facilitation of geographically Independent communication instead of long-distance travelling). However, as opposed to face-to-face communication, digital communication, requiring data flows over a certain distance through a transmission medium, certainly produces negative externalities: extensive energy usage through digitalization, social exclusion due to a lack of internet access or privacy infringements caused by the exploitation of data.

The sector, as defined by Inrate, ranges from telecommunications operators to advertising and printing
companies and therefore entails a wide array of companies with diverging products and services with differing impacts on society, the environment and the economy. Further, the Communication Sector is driven by constant technological innovation and disruption, which not only transforms business models within the industry itself but also changes the business conduct across all other industries. Inrate’s ESG Impact Analysis takes all these factors into consideration in order to help responsible investors in
identifying companies that contribute to sustainable development.