The impact of ESG factors on the future of the UK Electronic Communications Code
Published on 20th Mar 2023
Environmental, social and governance issues are having a broad impact on the telecoms sector
Governance: key gaps in the Code
The Product Security and Telecommunications Infrastructure Act 2022 received royal assent on 6 December 2022 and brought about a number of amendments to the Electronic Communications Code.
The Code previously overhauled outdated 1980s legislation, however the exponential expansion of the telecoms sector has seen it amended just five years later – with some changes more favourable than others. For example, while the equalisation of Code consideration and Landlord and Tenant 1954 Act payments is a welcome change, it is generally felt that the government should have gone further by clarifying gaps in the Code and continued points of dispute (for more on this, see our Insight).
A particular disappointment is that, despite an extensive period of consultation with sector experts, the government failed to clarify what constitutes an "occupier" for the purposes of the Code. The holes in the new Act are seen once more in relation to renewals and upgrades: what should operators seek to do when "other parties to the Code Agreement" are insolvent or have been succeeded?
While the Act rightly puts greater emphasis on the need for alternative dispute resolution (ADR) to avoid the unnecessary use of tribunal resources, it has not gone far enough. For example, the tribunal will probably need to look to the Civil Procedure Rules for guidance on how it could apply the new ADR principles under the Code, to determine whether operators are correctly complying with the requirement to use ADR. Furthermore, there has been a rise in the number of litigants-in-person and this may temper the hope of using ADR to reach an agreement consensually.
Social: diversity and the ageing workforce
There is a major skill shortage across the telecoms industry, with the industry also finding it difficult to recruit new skills into the workforce and attract new talent. The sector also has an ageing workforce, with many skilled operatives across the industry approaching retirement age.
Matters are compounded by many in the industry, with decades of knowledge, leaving the sector without having put in place succession planning.
To counteract these issues, key players in the industry have begun to roll out apprenticeship schemes that aim to merge a number of different skillsets together. The benefits of this amalgamation of skills could be wide ranging, including reducing the number of site visits operators have to make to telecoms sites. A number of alternative schemes, such as sandwich placements and alternative routes to chartership are also being phased into the telecoms industry.
Environmental: renewable energy
Environmental factors are also having an impact on the telecoms sector.
With increasing energy costs and need for greater connectivity, the pressure is mounting for the sector to react. It is hardly a surprise, therefore, that some of the key operators are looking into partnering with energy providers to power sites through renewable energy sources.
"Greenfield" sites have proved the most successful, where wind turbines, solar panels and battery back-ups have been looked at to power the telecommunication equipment on site. Although operators are in an early developmental stage, they are making conscious efforts to innovate and minimise their carbon footprint.
Osborne Clarke comment
ESG influences, particularly environmental concerns, are likely to have an increasing role driving behavioural change in the telecommunications sector. With the continued push for better connectivity, the energy costs crisis, government targets to hit net zero and increasing societal and employee pressures to be more sustainable, the industry must adapt and this will undoubtedly influence the future of the Code.
The topic of this Insight formed part of Osborne Clarke's Communications Review 2023, on 1 March where a panel led by Osborne Clarke Property Disputes Partner, Emily Van Schalkwyk and comprising of sector experts, Oliver Radley-Gardner (KC, Falcon Chambers), James Tipler (Barrister, Falcon Chambers), Phil Warren (Head of Legal and Compliance for communications infrastructure provider, Cornerstone) and Philip MacCabe (Partner, Cluttons), recently discussed the impact of environmental social and corporate governance (ESG) factors on the future of the Code.
If you would like to discuss any of the issues raised, please contact your usual Osborne Clarke contact or one of the experts listed below.
This Insight was produced with the assistance of Lauren Gardner, Trainee Solicitor.