The first carbon neutral towerco

The Paris Agreement on climate change agreed on a global target of net zero carbon emissions by 2050; Vertical Bridge, the largest private towerco in the US, announced it was net zero this June 4th, having been certified as CarbonNeutral^® by The CarbonNeutral Protocol, the leading global framework for carbon neutrality. The company, which owns and operates over 269,000 towers, rooftop, billboard and other sites, is the first towerco in the world to reach 100% carbon neutrality. TowerXchange discusses the process with Bernard Borghei, Co-Founder and Executive Vice President of Operations.  Join our free session on telecom energy, Greening the Network on July 15th. More details here. 

TowerXchange: When did you set a goal to become the first carbon-neutral towerco, and how long did it take to achieve? What was the process?

The official process took about six months, but it has much deeper roots. We look at being certified as carbon neutral as an evolution of everything we have done before, even going back to the Global Tower Partners days. 

Right from the get-go at Vertical Bridge, we have looked for opportunities to become more environmentally-focused. We started out doing more easily implementable things like getting rid of paper cups to reduce waste and replacing lighting systems with LEDs to reduce energy consumption. Then we looked at our operations in our offices and in the field. We have been updating our HVAC systems, replacing our sites’ back-up generators and using renewables where possible. 

Around Q419, the executive team began to start looking into what would be needed to take that next step and become a truly carbon-neutral company, and to show the industry that net zero emissions is feasible and attainable. We made the announcement on June 4.

TowerXchange: Can you tell our audience a little more detail about the programme to get certified?

The programme started in earnest in January by collecting data on our emissions. I analysed our financial records to enumerate the categories and scale of the emissions we produced. This meant looking at miles driven, air fares (including class travelled and distance flown), our office footprint, HVAC usage, generator runtime and utilities. It had to be a detailed analysis.

By early March, we began working with Natural Capital Partners, consultants who helped to guide us through the certification process. They were hugely helpful and ensured we captured all the emissions we should, including the footprint of our contractors. Capturing these scope-3 emissions was essential to become truly carbon neutral (see infobox). Mapping the actions of our contractors, what they did and what it cost in terms of carbon emissions added another five to six weeks into the analysis and data crunching. 

We had done a good job minimising our emissions, but there were also some that were unavoidable – sites need building, staff need to travel, electricity is still carbon intensive – so we started looking at offsetting credits. We chose four projects to be our first year’s contribution (see infobox).

By mid-May we were able to present our final calculation and Natural Capital Partners could certify them.

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Not all emissions can be eliminated, but they can be offset. The projects below are supported by Vertical Bridge and reduce and remove greenhouse gases, and are focused on nature-based climate solutions and resource recovery:

Grasslands Portfolio — Preserves grasslands across Colorado and Montana, locking carbon into the soil and avoiding the emissions from conversion to agriculture.

Seneca Meadows Landfill Gas — Reduces the environmental impact of landfills through methane capture, electricity generation and wetland enhancement.

Mississippi Valley Reforestation — Reforests more than 2.4 million acres of native woodland to restore the Lower Mississippi Alluvial Valley.

Darkwoods Forest Conservation – Protects 156,000 acres of Boreal forests in British Columbia, Canada, from subdivision, high-impact logging and other environmental threats.

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TowerXchange: How are emissions by tenants covered in your scheme?

As things stand we are not responsible for our tenants’ emissions, however, all our major tenants, AT&T, T-Mobile, Verizon, et cetera have announced their own ESG initiatives and are targeting carbon neutrality themselves by 2030-2040. 

Now we have achieved carbon neutrality, we will be engaging more with our tenants and other towercos to let the industry know what is possible. We had to get our certification to prove we were serious about it. We are looking forward to picking up the phone and having really productive conversations with our tenants. We will also be educating our contractors, on how to join the initiative and reduce their footprint too.

TowerXchange: Can you break down how much energy was consumed in each category, and how of your progress is in eliminating emissions vs offsetting emissions?

At the moment we produce 23,000 tonnes of carbon dioxide annually and electricity is by far the biggest part of that footprint, including aviation lighting, HVAC systems, and office running costs. 

Our fuel and energy-related emissions were around 1,000 tonnes. Upstream transport was around 2,000 tonnes. Travel, waste, remote employees and other miscellaneous emissions were 1,500 tonnes. So by far, the largest contributor was electricity.

Where emissions are unavoidable, we can offset, but we are also looking at power purchase agreements with renewable companies, or are partnering with solar producers directly to reduce our emissions.

TowerXchange: You have described this as a first step, what will additional carbon-reduction projects look to achieve?

Where we have a good concentration of sites in unregulated states, we can choose our power supplier. We have signed contracts to put entire portfolios of assets on a fixed rate which is not just low price, but also choosing producers who generate certain percentage of their energy through renewable energy sources and are low carbon too. That programme started in late 2018 and is now active in 11 states. As more states change their regulations to allow us to directly purchase green energy, we will. 

We have a large portfolio of broadcast sites, and those sites tend to come with a lot of land. We can sign agreements with people deploying solar panel systems to let them co-locate on our land and, where it is legal, utilise the energy from the solar panels before falling back on the grid.

Regulation varies state by state¸ but where we can, we are looking to use renewable energy first. Even where we cannot use it, we can still make the land available for the solar power producer to sell back into the grid.

TowerXchange: Which stakeholders were the key drivers for investing in becoming carbon neutral?

The overriding reason that Vertical Bridge pursued carbon neutrality is that we believe it is our duty as corporate citizens. Our investors (Digital Bridge, CDPQ, The Jordan Company, Goldman Sachs Infrastructure Partners, Stonepeak Infrastructure Partners, The Edgewater Funds, CalSTRS and Dock Square Capital) have been supportive but they never said we must do this or that, they didn’t need to.

My co-founders and I want social responsibility to be a pillar of Vertical Bridge, which is why when we began the company, we set up our philanthropic arm, the Vertical Bridge Charitable Network (VBCN). Again, in that instance, our investors supported us but the decision to establish a charitable network ultimately lay with the executive team. 

I like to say that the three Ps – profits, people, planet – are not mutually exclusive. In six years we have become the largest private towerco in the country with over 269k assets, US$2.5bn of capital and we are profitable. The charitable network and community service hours we do through VBCN allows us to support people. Now we are turning to the planet. We want to be good corporate citizens and show that profitability doesn’t clash with people or the planet.

We also want to be positive partners to our tenants. We didn’t receive much direct lobbying to prove we were low carbon, but they have made their own commitments and we want to support them.

Moving to LED lighting or installing more efficient HVAC systems saves carbon by saving energy and money, so there’s a natural incentive there. The wireless industry has been evolving into a more efficient and safer industry for last 45 years, whether that is improving safety and setting rules around tower climbing or professionalising passive telecom infrastructure management. Our environmental commitments fits into that same tradition of continuous improvement.

TowerXchange: What guidance, support or encouragement can you offer other towercos that wish to become carbon neutral too?

The first piece of advice I’d give is: don’t go through this to check a box. You have to believe in it. We do want to be advocates for this and we are already speaking with operators that want to understand how we did this. 

The climate accounting system follows generally accepted accounting principles (GAAP), but you’ll need a partner or consultant to help you understand the data. You have to be clear on what you can you do starting today, and what information you need to start collecting so you know what to do tomorrow. Once you understand where your emissions are coming from you can then address them.  

TowerXchange: For towercos which offer power-as-a-service, especially those in emerging markets, carbon neutrality probably seems a long way off, what advice can you offer them?

It is a harder challenge. If you’re operating in India or Africa it is going to be hard to walk away from generators. Grid power is not reliable and it is far more important to deliver connectivity than to save emissions by not building a site just because it requires a genset. 

You have to look at where technology can help you. In California, we installed solar on an off-grid site and reduced genset runtime by 40%. You have to deploy capex to save on opex, that’s something towercos know a lot about, and by saving carbon-related opex you can cut emissions.

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Scope 1 emissions describer direct emissions from owned or controlled sources. Scope 2 covers your indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by the company. Scope 3 emissions cover all other indirect emissions that occur in a company’s value chain.

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Bernard Borghei will be speaking at Greening the Network II – a digital event focused on the drivers and challenges of going green. Please contact matthew.edwards@towerxchange.com if you are interested in being involved. Join our free session on telecom energy, Greening the Network on July 15th. More details here.