Aspect 1: Environmental concerns

“We assume responsibility for a low-carbon society” is one of the action areas of our CR strategy. It not only expresses our commitment to minimize the impact our business activities may exert on the climate, but also our desire to tap into the opportunities for sustainable development offered by digitalization.  For further information, please refer to “Deployment of ICT products to the benefit of society” in this section under Aspect 3: “Social concerns”. In our 2018 CR report, we will discuss environmental topics where our business activities have a comparatively low impact, with examples including the preservation of biodiversity and water consumption.

Our comprehensive environmental management system is based on the international ISO 14001 standard. Furthermore, in May 2018 we published a new environmental guideline that summarizes and complements the existing voluntary commitments in force across the entire Group. You can access this guideline on our Group website.

Climate protection and resource conservation SDG 13

Demand for faster data services with full-coverage availability is growing rapidly. That is why we continue to drive forward the build-out of our infrastructure and increase data transmission rates. Our investments in the network build-out make us one of the biggest investors in the industry. Operating our network consumes energy. Increasing energy consumption is associated not only with higher costs, but can also lead to an increase in CO₂ emissions and thereby accelerate climate change. We must therefore ensure our energy consumption grows to a much lesser extent than the volumes of data we transmit and, at the same time, promote the use of renewable energies to set energy consumption apart from CO₂ emissions. We also need to harness the opportunities opened up by digitalization – which, when implemented properly, can help save energy and thus slow down climate change. For further information about the opportunities and risks associated with climate protection, please refer to the section “Risk and opportunity management”.

Our integrated climate strategy includes four aspects of climate protection: CO₂ emissions, renewable energy, energy efficiency, and sustainable products. The climate strategy applies Group-wide and is implemented on an interdisciplinary and decentralized basis at the level of the national companies. Our Board of Management set a climate-related goal as early as in 2013. By 2020, we aim to reduce total CO₂ emissions in the Group (excluding T-Mobile US) by 20 percent compared to 2008. In 2018, we modified how we calculate CO₂ emissions for our climate goal in line with the market-based method used by the Greenhouse Gas (GHG) protocol in order to place greater emphasis on the use of renewable energy as a means of lowering emissions.

In all, 40 business units in 29 countries have undertaken to work toward our climate goal. Our national companies are helping us achieve this goal in different ways and to different extents, depending on developments in their local markets. GCR reports to the Board of Management on the status quo on an annual basis. Despite the challenges posed by rapidly growing data volumes and the continuous network build-out this entails, we continue to stand by our climate goal. Over the past few years, we have succeeded in moderately reducing our emissions. According to this calculation method, we are at the level forecast for 2018. To achieve our current climate goal, we are focusing on areas that consume particularly high amounts of energy, first and foremost our networks and data centers. For instance, we are migrating our network infrastructure to IP technology, which is more powerful yet consumes less electricity. For further information, please refer to the section “Development of business in the operating segments”. We are working to process data traffic from no more than a few, particularly efficient data centers. The PUE metric serves as an indicator for enhancing energy efficiency. We determine this metric using the method recommended by The Green Grid Association, which takes the total energy consumed by data centers into account, not only that used to operate the servers. In 2018, the global PUE metric for our T-Systems data centers was 1.63. From 2008 to 2018, we reduced the average PUE metric for T Systems data centers in Germany from 1.85 to 1.57. Our data center in Biere, Saxony-Anhalt, is extremely efficient. It was also awarded the respected LEED Gold sustainability certification (Leadership in Energy and Environmental Design). By taking steps such as migrating data from inefficient data centers to Biere, we achieved a PUE metric of 1.36 by the end of 2018.

In 2017, we set about updating our climate strategy and devising new climate targets for the period after 2020. We are developing the new goals for reducing our CO₂ emissions (Scope 1, 2, and 3) based on current scientific and political conditions. In 2018, we established such goals in the United States and Hungary using the Science-Based Targets method and submitted them to the Science-Based Targets initiative, which has already endorsed those set for the United States. Our climate strategy also focuses on further increasing the share of renewable energy in electricity consumption.

We obtain renewable energy through direct purchases, in the form of certificates for electricity from renewable sources and, to a small extent, by producing it ourselves. Whenever it is possible and practicable, we also invest in our own systems – for instance in the construction of cogeneration plants and the installation of photovoltaic systems. SDG 7

We determine the effectiveness of our climate protection measures using key performance indicators (KPIs). The KPIs Energy Intensity and Carbon Intensity for Deutsche Telekom are shown in the following graphics. Both KPIs reflect our energy consumption and our CO₂ emissions in relation to the volume of data transmitted, thus demonstrating how our network’s energy and emissions efficiency has developed in practice. The result for the Energy Intensity KPI is 163 and 41 for the Carbon Intensity KPI. For the Group as a whole in Germany, the Energy Intensity KPI stands at 110 and the Carbon Intensity KPI at 26. The Renewable Energy KPI shows how much of our Company’s overall electricity consumption is obtained from renewable sources. In 2018, this amounted to 52 percent. When calculating this KPI, we also look at direct purchases, Guarantees of Origin, Renewable Energy Certificates, the renewable energy we produce ourselves, and the proportion of renewable energy used across the countries. We use the Enablement Factor ESG KPI to calculate the positive CO₂ effects facilitated for our customers through using our products. For further information, please refer to “Deployment of ICT products to the benefit of society” in this section under Aspect 3: “Social concerns”.

Energy Intensity ESG KPI

Deutsche Telekom Group in 2018

Carbon Intensity ESG KPI

Deutsche Telekom Group in 2018

We use the internationally recognized GHG protocol to calculate our CO₂ emissions. This allows us to take measures to reduce our ecological footprint at the corporate and product levels. The standard distinguishes between three CO₂ emissions categories (Scope 1, 2, and 3). We report on these in June each year as part of the CDP.

The following graphic visualizes the emissions of the different scopes resulting from our business activities, shown as CO₂-equivalent emissions (CO₂e emissions).

CO₂e emissions (Scope 1–3)

Deutsche Telekom Group in 2018 in % and kilotons of CO₂e

We are aware that effectively combating climate change calls for everyone involved to work together and take determined action, which is why we participate in many national and international associations and organizations. Particularly noteworthy here is the Global e-Sustainability Initiative – a corporate association with the vision of making society more climate-friendly and sustainable with ICT solutions. We are also working systematically and successfully on improving climate protection throughout our supply chain. Since 2016, the CDP’s supplier engagement rating has assessed how well companies have integrated the topic of climate protection into their supply chains. In 2018, we were awarded an A rating by CDP and included on its Supplier Engagement Leader Board. Over 70 percent of our procurement volume is covered by disclosures collected from our suppliers by rating organization CDP as part of its 2018 supply chain program. SDG 17

Last but not least, handling valuable resources responsibly also plays a vital role in a holistic approach to climate protection. In light of the islands of plastic gathering in the sea, growing mountains of waste, and the resulting consequences for humanity and the environment, people are increasingly turning their attention to the topic of resource efficiency. An employee survey conducted at Deutsche Telekom in September 2018 confirmed this fact, leading CEO Tim Höttges to launch the Stop Wasting – Start Caring! initiative, which provides a new platform for the Group’s long-lasting commitment to greater resource efficiency. Its core aim is to deploy and recycle resources as efficiently as possible in keeping with the concept of a circular economy – for example by reducing the amount of plastic, paper, and packaging we use even further and pursuing alternatives wherever possible. The approach taken to achieve this goal covers everything from product procurement, design, internal processes right through to the end product and its usage. We are leading the way when it comes to taking back old devices. In addition to this, we are notably promoting resource efficiency by virtualizing our products and advocating sharing economy models through the use of our network, which help conserve resources by dispensing with the need for purchased goods. In September 2018, Tim Höttges called upon every employee to assume a creative role in the initiative at their place of work, stating: “We need to adopt a more sustainable manner of thinking in everything we do.” Our national companies are also putting resource conservation into practice in a number of projects. A prime example is the OTE group, which became the first company in Greece to offer to recycle terminal equipment (ADSL, VDSL, VoIP modems, and TV decoders), collecting and recycling a huge quantity of devices in 2018. SDG 12