Telstra’s 2026 Sustainability Report: Climate Progress, Digital Responsibility and the Challenge of Building Trust

Telstra Group Limited is Australia's leading telecommunications company, providing mobile, broadband, enterprise connectivity and digital infrastructure services. As of June 2026, the company reported approximately 26 million retail mobile services, 3.1 million consumer and small-business bundle and data services, and a network connecting to points of presence across nearly 200 countries and territories.

Telstra's Bigger Picture 2026 Report illustrates how sustainability priorities are becoming intertwined with the commercial responsibilities of telecommunications operators. Unlike businesses whose environmental and social exposures arise primarily from manufacturing, Telstra must manage the consequences of operating critical communications infrastructure, including network reliability, emergency connectivity, customer protection, digital inclusion and the growing environmental footprint of technology.

Reporting Background and Regulatory Context

The report covers the financial year from 1 July 2025 to 30 June 2026 and forms part of a wider reporting suite comprising the Annual Report, Corporate Governance Statement, Modern Slavery Act Statement, sustainability Data Pack and supplementary disclosures. Importantly, Telstra's mandatory climate-related statements prepared under Australian Sustainability Reporting Standard AASB S2 are presented separately within its FY2026 Annual Report.

This structure reflects Australia's transition towards mandatory climate-related financial disclosures, with AASB S2 based substantially on IFRS S2 and reporting obligations introduced progressively from 2025. Telstra also maps its wider disclosures to frameworks including GRI, the UN Global Compact, the Sustainable Development Goals and the Taskforce on Nature-related Financial Disclosures (TNFD). Its reporting generally covers Telstra Group and controlled entities, but excludes Digicel Pacific unless specifically indicated, creating an important boundary qualification for performance comparisons.

Governance Architecture and Accountability

Telstra integrates sustainability into its five-year Connected Future 30 strategy, positioning it alongside customer engagement, digital infrastructure, technology leadership and financial discipline. Climate emissions targets are incorporated into the FY2026 short-term incentive scorecard for eligible employees, providing a financial mechanism for linking sustainability performance with management accountability.

The company's governance arrangements extend into operational conduct, supplier oversight, cybersecurity and responsible AI. Mandatory Business Essentials training achieved 97.7% completion across its target audience, although this remained below its 100% objective.

Telstra disclosed 172 whistleblowing reports during FY2026, including 117 eligible disclosures, and reported that allegations were substantiated wholly or partly in 49 reports investigated during the year. These disclosures provide useful evidence of governance processes in operation, although training participation and investigation activity alone cannot establish the effectiveness of organisational culture or preventive controls.

Materiality Approach and Risk Prioritisation

Telstra conducts an annual impact materiality assessment examining how its operations and value chain affect people and the environment. The assessment draws on stakeholder engagement, internal data, sector research, peer analysis and regulatory expectations, evaluating impacts through factors including severity, scale and likelihood.

Its highest-rated topics include cybersecurity and privacy, consumer safety, workforce wellbeing, network resilience, energy consumption, emissions, responsible sales, digital inclusion and responsible AI. Telstra combines this impact assessment with separate financial risk and opportunity processes, describing the two perspectives together as its double materiality approach.

The distinction is important because this does not, by itself, establish conformity with the European Sustainability Reporting Standards' double materiality requirements. Nevertheless, the prioritisation of network resilience, privacy and accessibility demonstrates a materiality approach that recognises telecommunications-specific exposures rather than treating ESG solely as environmental compliance.

Climate, Supply Chain and Social Dimensions

Telstra has committed to net-zero Scope 1, 2 and 3 greenhouse gas emissions by 2050, supported by a Science Based Targets initiative-validated net-zero target. Its interim objectives require at least a 70% reduction in absolute Scope 1 and 2 emissions and a 50% reduction in absolute Scope 3 emissions by 2030, both against an FY2019 baseline. At FY2026, Telstra reported respective reductions of 48% and 49%, supported by infrastructure decommissioning, energy efficiency and supplier engagement.

Scope 3 accounts for approximately 66% of Telstra's emissions footprint, with purchased goods, capital goods and upstream transportation representing around 72% of Scope 3 emissions. By FY2026, 276 suppliers had agreed to contractual emissions disclosure and reduction commitments, representing more than A$4.2 billion in annual expenditure. Responsible sourcing activities included independent audits across 52 sites involving 23 suppliers and the closure of 151 corrective actions relating to priority or major findings from current or previous audits.

Beyond climate, Telstra reports progress on nature-related risk identification as an early TNFD adopter and on electronic-waste reduction through device recovery and circularity programs. These initiatives indicate increasing attention to lifecycle impacts, although measurable biodiversity outcomes and supplier-level decarbonisation attribution remain areas for further development.

Employment

Telstra reported an employee engagement score of 81 in FY2026, two points above the global top-quartile benchmark used by the company, with an 83% employee survey response rate. It invested more than A$20 million in training and development, including leadership programs, cybersecurity capabilities and responsible AI education.

Women's representation reached 40% of the CEO Leadership Team, including the CEO, while women accounted for 37.4% of the global workforce. The latter remains below Telstra's 2030 gender representation ambition under its 40:40:20 framework.

Employee relations are supported by enterprise agreements, union consultation and flexible working arrangements, with 23 formal consultation meetings involving unions and workplace delegates during FY2026. The emerging workforce challenge is whether Telstra can translate extensive digital and AI training into durable employee mobility, equitable opportunities and measurable capability development as automation changes job requirements.

Health and Safety

Telstra's occupational health and safety management system is certified to ISO 45001, and its FY2026 Total Recordable Injury and Illness Frequency Rate improved to 3.66 from 3.72 in FY2025. The company also introduced an enhanced critical-risk framework and expanded initiatives addressing road safety, workplace aggression, ergonomics and psychosocial health.

However, a Telstra employee died in July 2025 following a bird strike involving a chartered helicopter in the Northern Territory. Telstra reported that subsequent investigations found no fault or regulatory breach by the company, while approved aviation suppliers were required to review bird-strike prevention controls.

The incident underscores the significance of high-consequence operational risks even where overall injury indicators improve. Telstra also identified unacceptable customer behaviour as its most frequently reported incident category, highlighting the importance of protecting frontline employees from increasingly complex physical and psychosocial risks.

Product or Service Responsibility

For telecommunications providers, product responsibility extends beyond technical service quality to customer safety, affordability, privacy, accessibility and uninterrupted access to essential communications. Telstra reports blocking an average of more than 24 million scam calls and nearly five million scam texts each month, alongside initiatives to strengthen cybersecurity and digital accessibility.

Nevertheless, historical customer conduct remains a significant governance concern. In October 2025, the Federal Court ordered Telstra to pay an agreed A$18 million penalty, plus A$300,000 in costs, for false or misleading representations concerning Belong upload speeds in 2020. Telstra also describes its ongoing remediation of First Nations customers affected by earlier mis-selling practices.

Network resilience is another defining responsibility, particularly where service interruptions affect emergency communications. A major outage in July 2026, after the reporting period, affected customers including some attempting to contact Triple Zero, reinforcing the need to evaluate service reliability and remediation as central social and governance outcomes.

Philanthropy

Telstra reported social and community investment valued at A$41.3 million during FY2026, alongside programs addressing digital access, affordability and technological literacy. Its digital inclusion activities supported approximately 177,000 people during the year, contributing towards its ambition to support one million people by FY2030.

The Telstra Foundation committed A$6 million, supplemented by approximately A$929,000 in shareholder and customer donations, to partners and programs supporting children and young people. Its activities included partnerships with 17 purpose-driven organisations, with priorities spanning digital access, safer online experiences and youth participation.

Telstra also supported more than 1.4 million customers in vulnerable circumstances to remain connected, including over A$4 million in value distributed through Telstra Top Ups. The analytical distinction is between program reach and sustained social outcomes: long-term changes in affordability, digital capability and participation would provide stronger evidence of impact than expenditure and beneficiary counts alone.

Metrics, Targets and Data Robustness

Telstra's disclosure presents measurable trends across emissions, electricity consumption, circularity, workforce composition and customer support. Energy efficiency and infrastructure decommissioning initiatives delivered estimated annualised electricity savings of 46,215 MWh, while Australian electricity consumption was approximately 30% below its FY2019 level.

The company's renewable-energy achievement requires careful interpretation. Telstra enabled renewable electricity generation equivalent to 121% of its consumption by December 2025, increasing to 138% across FY2026, through power purchase agreements. However, Telstra explicitly states that it has not claimed consumption of renewable electricity from these projects or counted them directly towards its 2030 Scope 1 and 2 reduction target.

Likewise, its circular economy performance of 32 recovered, reused, repaired or donated smart devices for every 100 sold should be assessed against its FY2030 ambition of 50 per 100. Clear disclosure of accounting boundaries, baselines, estimation methodologies and target definitions remains essential to avoiding misleading comparisons.

Assurance, Credibility and Comparability

Deloitte Touche Tohmatsu provides limited assurance under Australia's ASSA 5000 over selected sustainability information, including greenhouse gas emissions results and disclosures associated with the Modern Slavery Act Statement. ASSA 5000 is Australia's counterpart to the international ISSA 5000 sustainability assurance standard, supporting more consistent assurance practices across sustainability topics.

However, limited assurance over selected information is not equivalent to independent assurance over the entire Bigger Picture Report. Users should distinguish assured metrics from unaudited narrative statements, program descriptions, forward-looking assumptions and other reported outcomes.

Comparability is further influenced by the exclusion of Digicel Pacific from much of the reporting boundary and by uncertainties associated with Scope 3 estimates and supplier data. Readers seeking comprehensive assurance conclusions should examine the separate Deloitte assurance statements, Telstra's Data Pack and the mandatory climate statements in its Annual Report.

Strategic Implications for the Sector

Telstra's reporting illustrates how telecommunications ESG performance increasingly depends on the interaction between digital infrastructure, climate adaptation and responsible technology. Network operators face simultaneous pressure to accommodate growing data demand, decarbonise electricity-intensive assets and maintain service reliability during extreme weather events.

Artificial intelligence adds another dimension, creating potential efficiency gains while increasing demand for processing capacity, connectivity, electricity and associated upstream services. Telstra's discussion of AI-related emissions, water requirements and cloud-provider dependencies demonstrates the importance of evaluating the full technology ecosystem rather than only directly operated assets.

The company's emphasis on supplier climate commitments also reflects a wider shift towards contractual and operational mechanisms for managing value-chain impacts. For telecommunications companies, future reporting quality will increasingly depend on demonstrating that these mechanisms deliver measurable reductions, improved resilience and better customer outcomes.

ESG Maturity and Future Positioning

Based on the report, Telstra demonstrates a relatively developed sustainability management structure, supported by quantitative targets, board-level governance arrangements, external assurance over selected information and established stakeholder programs. Its reporting also acknowledges difficult issues, including workplace fatalities, regulatory penalties, supply-chain uncertainty and network service disruptions.

Nonetheless, institutional maturity should not be confused with uniformly strong outcomes. Continued progress will depend on closing the remaining emissions reduction gap, broadening reporting boundary consistency, strengthening evidence of supplier performance and improving the measurement of social impact.

Telstra's future ESG position will therefore be shaped less by the expansion of sustainability narratives and more by its ability to provide comparable, independently supported evidence of progress in climate resilience, responsible AI, customer protection and digital inclusion.

Pacifica ESG View

Telstra's FY2026 Bigger Picture Report presents a detailed account of sustainability performance in a sector where climate, social responsibility and essential infrastructure are closely connected. The company's emissions reductions, supplier engagement mechanisms and investments in digital inclusion indicate an established approach to managing material ESG issues.

However, its performance must be considered alongside customer-conduct penalties, a workplace fatality and continuing network resilience challenges. The exclusion of Digicel Pacific from key measures and the limited scope of external assurance also warrant attention.

Pacifica ESG considers Telstra's reporting approach relatively mature, while recognising that the decisive test will be whether management systems consistently produce measurable improvements in operational reliability, customer outcomes and value-chain environmental performance.

Implications for the wider market

Telstra's experience demonstrates that telecommunications sustainability should not be evaluated predominantly through carbon emissions or renewable-energy commitments. Critical network resilience, consumer protection, cybersecurity, AI governance and equitable digital access are equally relevant to the sector's long-term risk profile.

Australia's mandatory climate reporting regime and the emergence of ASSA 5000 provide a stronger basis for comparable, independently assured disclosures. Companies operating internationally should also consider how ISSB-aligned standards, TNFD recommendations and evolving supply-chain expectations may influence stakeholder scrutiny.

For investors and sustainability professionals, the priority is to distinguish policy commitments and reported activities from verified outcomes, particularly where operational complexity, supplier dependencies and emerging technologies create material uncertainty.

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