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Aspect 4: Respecting human rights

We place high priority on respecting human rights. This applies not only to our Company, but also to our business partners and our approximately 20,000 suppliers in more than 80 countries – whom we explicitly place under the same obligations.

Labor standards in the supply chain and in the Group

There are still places in the world where human rights are not a given. As part of our global procurement activities, we can be exposed to country- and supplier-specific risks. These include, for example, inadequate local working and safety conditions. Violations cause severe damage to those affected and can result in reputational damage and negative financial consequences for companies.

For further information, please refer to the section “Risk and opportunity management.”

As a responsible company, we have made an express commitment to upholding the UN Guiding Principles on Business and Human Rights adopted by the United Nations Human Rights Council in 2011 (Ruggie Principles). The obligation to respect human rights is anchored in our core regulations – i.e., our Guiding Principles and our Code of Human Rights & Social Principles policy statement, both of which have been approved by the Board of Management. This underscores our commitment to protecting human rights and to the goals of the German National Action Plan on Business and Human Rights adopted by the Federal Government in 2016. At the same time, the code embodies our commitment to complying with the principles laid down by the International Labour Organization (ILO), the Organisation for Economic Co-operation and Development (OECD), the Universal Declaration of Human Rights, and the UN Global Compact. In addition to these obligations, we also recognize the minimum social standards which, in line with the new EU Taxonomy Regulation, are necessary conditions for the taxonomy-alignment of economic activities. We are also in favor of the new Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz) in Germany. We have carried out regular human rights audits for years. In 2021, we analyzed these in regard to the new act and will adapt them accordingly in the future. We also require our suppliers to comply with all our guidelines related to human rights. Within the Group, the main focus of our attention is on preserving the right to collective agreements, and on ensuring diversity and equity.

For further information, please refer to the sections “Collaboration with employees’ representatives/trade unions” and “Diversity, equity and inclusion.”

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

In order to meet the requirements of the UN Guiding Principles, we have developed an extensive program to implement these Principles throughout our Group and introduced an ongoing process comprising several interconnected measures and tools. The program includes the policy statement, promoting awareness, a mechanism for lodging complaints, a risk and impact analysis, and reporting.

We use two main instruments to review our Code of Human Rights & Social Principles in the Group: Firstly, we compile a central Human Rights & Social Performance Report each year. For 2021, all 111 of the companies surveyed declared in this report that they comply with the rules and principles of the Code of Human Rights & Social Principles. We additionally included five joint ventures in the survey for 2021. The report indicated no violations for 2021. Secondly, we have established a central point of contact for human rights issues, which can be reached via the email address “humanrights@telekom.de.” Further contact options and an anonymous whistleblower system are available on TellMe, our Group-wide whistleblower portal. We look into all tip-offs received and introduce countermeasures, provided the information is identified as plausible. In 2021, seven tip-offs relating to human rights were received via the point of contact and the whistleblower portal. Not all of these tip-offs were deemed plausible. Whenever necessary, we carry out review processes at our national companies to assess employer-employee relationships. To do so, we compile five human rights-related key performance indicators, such as employee satisfaction and the health rate, then assess these using a traffic light system.

For further information about employee satisfaction, please refer to the section “Employees.”

In addition, we conduct an annual formal review of compliance with our Employee Relations Policy. In September 2021, an Employee Relations Policy review was conducted at OTE in Greece. After a review like this, the results are discussed with the regional managers in our national companies. If necessary, we agree measures such as a Human Rights Impact Assessment and Engagement – a process for estimating the actual and potential effects of business activities on human rights, as well as the ability of the organization to prevent, mitigate, or eliminate negative effects. In view of the coronavirus pandemic, we were unable to perform any further routine assessments abroad in 2021. The pandemic also prevented us from holding on-site training courses to raise awareness among managers and employees for human rights issues. Instead, we organized a Human Rights Risk Assessment at Group Headquarters in 2020, in the course of which we identified further Group-wide challenges as regards human rights; among other things, these will make it necessary to adjust individual policies and communications measures. The relevant measures, such as adapting our Code of Human Rights, are implemented on an ongoing basis. For example, in 2021 we set up a human rights working group and carried out a more in-depth review of the procurement process.

Our perception of ourselves as a company that acts in a socially and ecologically sustainable way includes assuming responsibility along our entire value chain. We have been working to improve sustainability throughout our supply chain for many years. Our strategy for sustainable procurement practices is embedded Group-wide in our procurement processes. The heads of the CR and Procurement units are jointly responsible for its implementation. On January 1, 2022, responsibility will be transferred directly to the department of the Chairman of the Board of Management. An escalation process calls for decisions to be made at Board of Management level in severe cases. The Sustainable Procurement Group, a working group that has had an international focus since the reporting year, supports our national and international procurement units in implementing the sustainability requirements. The aim is also to foster dialog among procurement employees. Our sustainability principles for procurement are set out in the Group’s Global Procurement Policy. The supplementary Procurement Practices provide specific guidelines for procurement in Germany and serve as templates for implementation in the different national companies. The section of the Procurement Practices covering sustainability gives purchasing officers an overview of the CR criteria that are to be taken into account in each stage of the procurement process. An e-learning tool is available to our employees throughout the Group providing training videos on the issue of sustainability in procurement.

Our suppliers must accept the principles of our Supplier Code of Conduct and meet the associated requirements. Nonetheless, we cannot guarantee that all of our suppliers are up to the standard. We review their compliance regularly to minimize risks and support suppliers in further developing their sustainability performance, working closely with them on these issues. Leading up to the supplier evaluation, we classify our categories as critical or non-critical based on risk and opportunity. We have defined 14 Corporate Social Responsibility (CSR) risk criteria and 4 CSR opportunity criteria on the basis of expert interviews.

For the supplier evaluation itself, we use a multi-stage approach: The Supplier Code of Conduct, for instance, is an integral part of all supplier agreements and binding for all of our suppliers. Ethical, social, and ecological principles as well as fundamental human rights are codified in this document. When selecting a supplier after issuing an invitation to tender, sustainability factors are given a weighting of 10 %. In addition, all new suppliers undergo a review by a company specializing in the analysis of published ESG risk data (excluding T‑Mobile US). In this way, we can find out at an early stage if there is any increased risk with regard to specific sustainability criteria at any of our suppliers.

We are constantly working to enhance the social and ecological sustainability of our value chain. During the reporting year, we again carried out a dedicated process to review IT and network products on the basis of specific sustainability criteria, which we had already tried out in 2020 as part of a pilot project. On the basis of our findings, we worked with the telecommunications company Orange to draw up a harmonized set of criteria that was then piloted in selected invitations to tender for hardware products. As of 2022, these harmonized criteria are to be applied in all tenders for hardware products and have a weighting of 20 % when selecting suppliers.

Sustainability assessments and reviews are additionally conducted for selected suppliers of critical categories. Depending on their individual sustainability performance and risk classification, we use a range of instruments, for instance, the information system EcoVadis, mobile employee surveys, and on-site supplier audits (social audits). Our focus here is not only on our direct suppliers but also, wherever possible, on downstream suppliers. We increase the effectiveness of our audits through our cooperation with Joint Audit Cooperation (JAC), which currently consists of 17 telecommunications companies. In 2021, we completed a total of 88 social audits (71 audits and 17 mobile surveys) – 34 at our direct and 54 at our indirect suppliers. Since 2010, we have carried out 812 audits within the framework of the JAC.

We work in close cooperation with our strategically important suppliers on improving their sustainability performance, for example, in terms of environmental protection, working hours regulations, and occupational health and safety. This is done primarily as part of the development program we initiated for suppliers. Since 2018, we have been implementing this program on the basis of a voluntary industry-wide approach known as the Sustainable Development Program (SDP). The SDP has been continued in the Joint Audit Cooperation (JAC) since 2021. Alongside Deutsche Telekom, which heads the project, Telefónica, Swisscom, and Orange are working together to refine the SDP on an ongoing basis in accordance with the JAC sustainability targets. In the reporting period, four further suppliers (two of Deutsche Telekom and two of Swisscom) were included in the SDP. Since the launch of the program in 2014, a total of 29 suppliers have completed the SDP, achieving measurable ecological, social, and economic progress. For example, one supplier was able to reduce energy consumption by 2.45 % and save 681.54 metric tons of CO2e emissions. Another supplier has established regular employee satisfaction surveys, achieving a satisfaction rate of 80 % in the second half of 2021.

Sustainability in procurement is measured based on the following ESG KPIs: the Procurement Volume Without CR Risk ESG KPI – for which the target is 95 % by 2025 – measures the procurement volume from direct business partners on whom an established external service provider carried out checks in the reporting period for negative reports in the media and found no irregularities. It also includes suppliers for whom irregularities were identified, but where corresponding corrective action was taken. The share of this procurement volume subjected to a risk assessment amounted to 99.7 % in 2021 (prior year: 99.6 %). The Procurement Volume Verified as Non-Critical ESG KPI – target for 2025: 60 % – by contrast, measures the share accounted for by suppliers checked for social and ecological criteria by means of dedicated reviews – e.g., through EcoVadis, the CDP, social audits, supplier visits, or our Supplier Development Program. In 2021, the share of these CR-verified suppliers was 60 % (prior year: 62 %). In each case, the calculation is based on the Group-wide procurement volume that is already uniformly mapped to a large extent (excluding the Network Capacity category and T‑Mobile US), but on different levels of supplier relationships.

Detailed information on our supplier management system will be published in our 2021 CR report.

CDP
An initiative by institutional investors that aims to promote dialog between investors and companies on climate change issues. The project counts the world’s largest companies among its members. The companies disclose data on their greenhouse gas emissions and climate protection strategies. The CDP collects and publishes the data on an annual basis.
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