Strategic and organizational approach to sustainability

We see ourselves as a responsible company and have made that a core element of our Group strategy. We are committed to implementing sustainability along our entire value chain – and to playing an important role in meeting today’s environmental, economic, and social challenges. We are expressly committed to the principles of the United Nations Global Compact, the German Sustainability Code, and the Code of Responsible Conduct for Business. Furthermore, we support the Sustainable Development Goals (SDGs) of the United Nations (UN), in particular contributing to the following goals: 3. Good health and well-being, 4. Quality education, 5. Gender equality, 8. Decent work and economic growth, 9. Industry, innovation and infrastructure, 11. Sustainable cities and communities, 12. Responsible consumption and production, 13. Climate action, and 16. Peace, justice and strong institutions.

The defining priorities of our CR strategy remain the same. However, our experience has shown that the three action areas of our CR strategy: “Connected life and work – enabling a sustainable lifestyle in a digital world,” “Connecting the unconnected,” and “Low-carbon and circular society” overlap in places. “Enabling a sustainable lifestyle in a digital world” in particular cannot be considered in isolation from the other two action areas. In addition, the issue of corporate digital responsibility has grown more important in recent years. We have therefore adjusted and expanded the wording of our action areas: “Climate protection & resource efficiency,” “Digital responsibility,” and “Digital participation.” Underpinned by clear governance, all three action areas help enable sustainable digitalization. The other key areas of our sustainability management remain unchanged: data security and data privacy, human rights and sustainable supply chains, sustainable finance, social commitment, and being a responsible employer. In addition, the principle of responsible corporate governance remains an important component of our sustainability activities.

During the reporting year, we brought many of our CR topics together under the headings #GreenMagenta and #GoodMagenta. Our aim is to position our commitment to sustainability more strongly in our communication with stakeholder groups such as employees and customers. We also use these two categories to label those of our products and initiatives that bring sustainability benefits. #GreenMagenta encompasses Deutsche Telekom products, services, projects, actions, and initiatives that make a positive contribution to climate protection and the more responsible use of resources. #GoodMagenta describes projects, actions, and initiatives that make a positive contribution to overcoming social challenges in the digital world. These labels help us increase the transparency of our CR communication. We also aim to increase transparency for CR experts by bringing our CR strategy in line with the ESG perspectives.

Our Board of Management bears overall responsibility for our CR goals, discussing and making decisions on key CR-related issues. The Group Corporate Responsibility (GCR) unit develops Group-wide policies and guidelines. Its aim is to further develop our corporate culture, particularly in terms of sustainable innovation and social responsibility. The increasing importance of sustainability for Deutsche Telekom led to the decision to transfer the GCR unit from the Human Resources and Legal Affairs Board of Management department to the department of the Chairman of the Board of Management as of January 1, 2022. By taking this decision, the Supervisory Board and the Board of Management are emphasizing how seriously we take our social and environmental responsibility. The CR managers from the different business units and national companies are responsible for implementing our CR strategy and work together in the international CR Manager Network. GCR is also advised by the CR Board, which is composed of the heads of the Group’s key areas.

Our values and basic principles are anchored in our Guiding Principles, the Code of Conduct, the Code of Human Rights & Social Principles, and other subject-specific policies. The cornerstones of our sustainability management activities are formally set out in our CR Policy, which is binding for all Group units. As part of our CR controlling activities, we record environmental, social, and governance (ESG) data and performance indicators. We use this data primarily to calculate our Group-wide ESG KPIs (key performance indicators), which we use to measure and manage our CR performance. Alongside the ESG KPIs, we also report other metrics and quantitative disclosures with the aim of meeting all internal and external transparency requirements. In some cases, the KPIs and other metrics can also be linked to the SDGs to show the progress we are making in the SDG focus areas. CR controlling was included in Deutsche Telekom’s internal control system (ICS) as a strategically relevant process in the reporting year for the first time. With this in mind, specific ICS principles for CR controlling have already been drawn up and approved by those business units subject to reporting requirements. The ICS principles apply to all indicators that are currently systematically recorded locally and consolidated at Group level. Their aim is to ensure that the process delivers high-quality data, on time and transparently.

Growing numbers of investors take sustainability aspects into account in their investment decisions (Socially Responsible Investments, SRI). SRI investment products consist of securities from companies that have been reviewed based on environmental, social, and governance (ESG) criteria. The development of demand from socially responsible investors for the T-Share is an indicator we can use to assess our sustainability performance. The Socially Responsible Investment ESG KPI indicates the percentage of Deutsche Telekom AG shares held by such investors. Our commitment to greater sustainability is paying off: As of September 30, 2021, around 12 % of all T-Shares were held by investors who show at least a partial concern for environmental, social, and governance criteria, and 10 % were held by investors who manage their funds primarily in accordance with aspects of socially responsible investment (SRI).

We are making our contributions towards solving social challenges measurable. To this end, we have developed a process and methodology to evaluate the external impact of selected products, solutions, and measures. This helps us to keep our key sustainability activities results-oriented and to make our contribution to achieving the SDGs visible.

Detailed information on this will be published in our 2021 CR report.