Opportunities associated with climate change

[G4-EC2] The ICT sector is required to play an important part in the fight against climate change by promoting the replacement of physical products and traditional services with digital products and processes (also see Digitisation, connectivity and social innovation/ innovative services chapters) that can promote the virtualization of the company by reducing the need for people and goods to travel. In general:

• Audio/video conferencing services and teleworking reduce the need for people to travel.
• on line invoicing and payments, in addition to saving paper and therefore the energy required to produce and transport it, eliminate the need for transport to make payments;
• telemedicine services reduce the need for doctors to meet patients in person;
• infomobility systems, using information obtained from mobile handsets, allow the optimisation of traffic flows, reducing travel times and the emission of greenhouse gases;
• systems for the monitoring and analysis of consumption allow the optimisation of the energy efficiency of offices and dwellings.

The efficiency improvements, savings achievable in economic terms and reduced environmental impacts associated with the use of these services are an interesting business opportunity for the Company, particularly considering the sensitivity of its stakeholders and citizens in general to the need to achieve significant reductions in greenhouse gas emissions to ensure a sustainable future for the planet and society. One example is illustrated in the box and relates to the Digital Life TIM Programme.

The foregoing obviously also applies to Brazil, where the development of solutions for mitigation and adaptation to climate change also have significant weight. One example is the partnership agreement signed with the Ministry of Science, Technology and Innovation (MCTI) for the installation of platforms to collect rainfall data at Radio Base Stations situated in the proximity of areas at high risk of natural disasters.

Finally, in order to prevent situations where there is a shortage of electricity for opposite reasons, namely a lack of rainfall, TIM Brasil is promoting initiatives aimed at reducing the consumption of services and installations.

In Brazil too, climate change can affect the behaviour of investors, who increasingly tend to give priority to companies that are transparent about how they manage emissions and show that they know how to assess and anticipate potential risks and seize opportunities. As a demonstration of its commitment, in 2016 TIM Participações S.A. was included in BM&FBovespa’s Corporate Sustainability Index (ISE) for the ninth year running, as indicated in the Indexes/recognitions paragraph in this report.

Moreover, TIM Brasil measures and communicates transparently since 2008; the CDP questionnaire was completed in 2007 and the company has been involved in the national EPC (Empresas pelo Clima) programme since 2010 and this could be a competitive advantage.

In 2013, for the first time the company formalised the voluntary acquisition of “Carbon Credits” to offset its direct emissions (Scope 1); in 2015 others were acquired for an overall total of 6,000 tCO₂ and generated by the REDD+ Jari-Amapá project¹ (reduction of emissions from deforestation and forest degradation) which was pursued through a partnership between the Jari Group and Biofilica in the Jari river valley, in the state of Amapá. The direct emissions produced in 2013 and 2014 were completely offset, while the remaining credits (amounting to 4,374 tCO2e) were used to offset the direct emissions produced by TIM’s vehicle fleet, electricity generators and refrigerating gas losses in 2015, amounting to 29% of the direct emissions (Scope 1).

TIM Digital Life Programme

The European Digital Agenda, presented by the European Commission in 2010, is an initiative specifically developed to encourage growth in the countries of the European Union in terms of infrastructural modernization, innovation and the efficiency of resources and services for both the public administration as well as citizens and businesses. All Member States have signed up to the European Digital Agenda, which aims to create smart, sustainable and inclusive growth through the extensive and broad adoption of new IT and telecommunications technologies.

On 1 March 2012, transposing what was agreed in the European sphere, Italy defined the Italian Digital Agenda and prepared its own domestic strategy, identifying the priorities and methods of intervention, as well as the actions to take and measure on the basis of specific performance indicators in line with that identified by the European Union - the DESI (Digital Economy and Society Index) - to assess the level of digitisation of the countries of the European Community.

n this context TIM launched the Digital Life Programme, a set of solutions which aim to provide new services dedicated to security, the environment and optimal energy management, providing a global response to the needs of the territory and cities and towns. The aim is to promote the “smart city” model to improve quality of life by developing innovative digital services. The Digital Life solutions that have had positive benefits on the environment are:

NUVOLA IT URBAN SECURITY (2016 revenues of around €350.000): the cloud platform providing services to optimize penalty processes carried out by the municipal police (including positive impacts on the containment of process-related paper documentation), the integrated management of urban security, environmental monitoring and smart mobility;

NUVOLA IT YOUR WAY: the integrated solution for managing commercial vehicle fleets and planning movements as part of fleet management and infomobility (with positive impacts on atmospheric pollution);

NUVOLA IT ENERGREEN (2016 revenues of around €650,000): the system that allows companies to monitor energy consumption and its efficiency through implementation instruments with sensors placed locally within the company. The energy saved can be estimated at around 10%, if only the metering & reporting function is implemented, but it can rise to over 50% for specific energy efficiency projects.

NUVOLA IT MESSAGE CUBE: the cloud platform for providing Unified Communications and Collaboration services for companies and public administrations (with positive impacts on the containment of process-related paper documentation and containing movement between sites);

LIGHTING SUITE (2016 revenues of around €343,000): the public lighting management service, which provides energy efficiency by controlling lighting units, transforming it into an outdoor city network offering added value services in a metropolitan context (for further information see the chapter Digitisation, connectivity and social innovation).

Energy saving is estimated within a range of values between 15% (light produced by high-efficiency lamps, e.g. LEDs) and over 30% in the case of light produced by old style lamps (e.g. sodium vapour or incandescence). Added to these values is the option of varying lighting by switching on and/or reducing the intensity of individual lamp posts. Assuming that average per capita energy consumption in Italy is 107 kWh1 and applying a 20% reduction (the replacement of conventional lamps with high efficiency ones is in progress in many towns) a town of 100,000 inhabitants would be able to achieve a total annual saving of 2,140,000 kWh, corresponding to 827 t of CO₂ emissions avoided².

SMART BUILDING: ad hoc solutions for the smartmanagement and automation of buildings able to be implemented on a project basis through the components of the Lighting Suite and Nuvola IT Energreen (for details refer to the Digitisation, connectivity and social innovation solution). The energy saved can be estimated at around 10%, if only the Metering & Reporting function is implemented, but it can rise to over 50% for specific energy efficiency projects. The revenues trend envisaged by TIM for the overall programme in the next three years is + 10% YoY.

OLIVETTI solutions

SMART CLEAN AIR: solutions to monitor air quality and reduce particulate matter and the main polluting substances in indoor and outdoor environments. The solution, integrated into the TIM cloud, is comprised of a field device located in the territory which draws in polluted air, filters out the harmful substances and detects the measurements of a series of environmental parameters which are then sent to the central system; the device, integrated into Olivetti’s IoT platform, is managed remotely through a specific Cloud application. The device is comprised of a telemetry module that transmits the relevant data to the Cloud application, an “electronic nose” made up of sensors to detect particulate matter, heavy metals and other harmful substances, and lastly a scrubber which performs a clean-up thereby reducing the polluting substances (PM 10 ~ 99%) without using filters and without generating special waste. Smart Clean Air requires infrequent maintenance, very limited energy consumption, and is particularly suited for industrial environments, offices or factories, as well as highly frequented outdoor areas such as railway and subway stations, shopping centres and bus stops. The efficient reduction of polluting agents varies depending on the specific characteristics of the installation site. Measurements taken in an outdoor city environment, in highly frequented areas, show efficient reduction, that is a percentage reduction of particulate matter with respect to the initial concentration, which ranges between 19% and 100% in relation to the different sizes of the particles.

SMART AGRICULTURE: a cloud solution which enables the monitoring of environmental parameters and the implementation of actions to optimize the yield and quality of the crop. The solution permits the monitoring of parameters through a system of probes applied to the growing medium, connected to a data acquisition and processing switchboard. A special alerting system allows users to receive early warnings via email or text message in the event of risks associated with the harvest (frost, heat waves, need for irrigation, ...). 1 Fonte: dal blog del Commissario governativo italiano per la Spending Review 1 Using the 2009 conversion factor for Italy calculated by the GHG Protocol, which is 0.3864 kgCO₂/kWh

The continuous recording of environmental data results in a series of historical records which are useful for agronomic studies and the modelling of natural phenomenon. The solution enables a series of benefits to be obtained, such as:

• minimized use of water resources: thanks to humidity sensors distributed over the ground and knowledge of the specific crop requirements, the water cycles can be optimized based on the actual state of the ground, thereby avoiding unnecessary waste.
• reduced use of fertilizers: if the crop is watered too often, some of the fertilizer spread over the ground is drained away together with the water; automated irrigation optimizes the yield of fertilizers.
• energy savings: automation of the irrigation system reduces the water use cycles and as a result reduces the energy consumption associated with water transportation.

¹ www.biofilica.com.br/web/projeto-jari.php