Aspect 1: Environmental concerns

We are committed not only to minimizing the impact our business activities may have on the climate and the environment, but also to tapping into the opportunities for sustainable development offered by digitalization. If harnessed properly, these opportunities can contribute, among other things, to protecting resources and saving energy.

In order to establish uniform processes in the Company and to continually improve our environmental protection efforts, we use a comprehensive environmental management system that is part of the Group-wide integrated QHSE (quality, health, safety, and environment) management, and that is based on international standard ISO 14001. Our Group-wide environmental policy collates the key aspects of our voluntary commitments. In order to handle the rising tide of regulatory requirements, especially from the EU, we established an internal, cross-divisional Green Deal task force in 2020. The purpose of the task force is to ensure that necessary measures and processes can be implemented without delay and to create the necessary transparency. Correspondingly, evaluations and indications resulting from the task force’s activities are taken into account in the Group’s various sustainability initiatives.

Climate protection

Our investments in the network build-out make us one of the biggest investors in the industry. In 2022, we invested around EUR 21 billion Group-wide, primarily in building and operating networks to meet the growing demand for faster, full-coverage data services. However, the network build-out cannot be allowed to lead to an increase in CO₂ emissions and thus accelerate climate change. For this reason, we use energy from renewable sources to decouple CO₂ emissions from energy consumption. In Europe, we have set ourselves the goal of doubling the energy efficiency of our networks by 2024. Above and beyond this, we want to further increase energy efficiency – for instance at our data centers – and thus reduce energy consumption in the medium term despite the expected rise in data consumption (2024 against 2020, excluding T‑Mobile US). The two non-financial performance indicators “energy consumption” and “CO₂ emissions” (Scope 1 and 2) were incorporated into the variable component of our Board of Management’s remuneration in 2021, and in 2022 were also made relevant for our executives (excluding T‑Mobile US). In the United States, we are forging ahead with the highly intensive build-out of our 5G network, in particular in rural areas. This initially drives up power consumption. T‑Mobile US, like the Group as a whole, has covered 100 % of its electricity requirements from renewable energy sources since 2021. There are strong fluctuations in T‑Mobile US’ carbon footprint owing to unforeseeable natural disasters and the associated temporary use of equipment such as diesel generators to restore and back up damaged network infrastructure. Consideration must be given to the special national situation in this key market, which is why the decision was taken, in respect of short-term variable remuneration in 2023, not to include T‑Mobile US in these two non-financial performance indicators. This step ensures that the right incentives are set for the Board of Management toward the sustainable development of the business, while safeguarding the stability of network operations at the same time. This applies equally to Board of Management managers and executives. The annual ambition for the performance indicators “energy consumption” and “CO₂ emissions” will continue to be set, managed, and reported for the entire Group as before, including a target value for T‑Mobile US. In the reporting year, Group-wide energy consumption remained stable year-on-year at 13,253 GWh (prior year: 13,323 GWh). Due in particular to the Group-wide use of electricity from renewable energy sources, CO₂ emissions (Scope 1 and 2) are at a low level and dropped further as a result of our measures to 233 kt CO₂e (prior year: 247 kt CO₂e). The values given for total energy consumption and Scope 1 and Scope 2 emissions are based in part on estimates, assumptions, and extrapolations, and, in part, on data provided by our external energy service providers.

For about the last two decades, climate protection has been steadily increasing in importance at Deutsche Telekom. Our Group-wide climate protection strategy covers the following aspects: “Emissions from the value chain,” “Renewable energy sources,” “Energy efficiency,” and “Enablement: positive climate-protection effects on our customers.” In 2019, the Board of Management adopted climate goals, which it stepped up again in 2021:

1. Since the end of 2021, we have been using electricity that comes from 100 % renewable sources everywhere in the Group (Scope 2, market-based method), which means we have achieved our goal.
2. By the end of 2025, we aim to reach climate neutrality across the Company. We will cut up to 95 % of our CO₂ emissions (Scope 1 and 2) with the transition to electricity from renewable energy sources and other measures. We will need to offset the remaining emissions through compensatory measures.
3. By 2030, we aim to reduce the emissions created by the manufacture and use of our products by 25 % per customer (compared to 2017) (Scope 3, categories: purchased goods and services, capital goods, use of sold products, use of leased products). These emissions account for more than 98 % of our carbon footprint. We maintain a close dialog with suppliers in order to reduce the emissions generated during production and to ensure that the products we offer consume less energy during the utilization phase.
4. We want to have reached net zero by 2040 across all three scopes. Where there are CO₂ emissions that we cannot avoid by using renewable energy, improving energy efficiency, or agreeing climate targets with suppliers, for example, we will offset these using compensatory measures that mean they are permanently removed from the atmosphere, such as through natural sinks in which natural ecosystems absorb greenhouse gases from the atmosphere. This goal is in line with the targets set out by the European Green Digital Coalition, of which Deutsche Telekom is a founding member.

We developed our Group-wide climate goals in line with the current scientific and political conditions. The Science Based Targets initiative (SBTi) has confirmed to us that our climate protection targets contribute to compliance with the Paris Climate Agreement. Internal preparations were made during the reporting year for a fresh review of our current climate goals in line with the SBTi guidance. The review is to be completed in 2023. The SBTi also gave a positive assessment of the targets set by our subsidiaries in the United States and Hungary. The national companies are taking different steps to achieve these targets. These include power purchase agreements (PPAs) for procuring electricity from specific sustainable sources, such as wind and solar power. At the end of 2022, we were obtaining 27.7 % of our electricity through these PPAs (prior year: 23.1 %). . By 2025, we intend to increase this percentage in Europe to 50 % of our power consumption. Our aim is to actively support the sustainable production of green energy.

We calculate our CO₂ emissions across the Group in line with the Greenhouse Gas (GHG) protocol. The market-based method is used for Scope 2 emissions. The standard distinguishes between three categories of CO₂ emissions (Scope 1, 2, and 3). 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 2022 in % and kilotons (kt) of CO₂e

We will publish detailed information on the year-on-year development of data in our 2022 CR Report at the end of March 2023.

Another important metric for us is the Renewable Energy KPI. It shows how much of our Company’s overall electricity consumption is obtained from renewable energy sources. In 2022, this amounted to 100 % across the Group. Direct procurement, guarantees of origin, and own energy production are included in this calculation.

The Power Usage Effectiveness (PUE) metric serves as one indicator for the efficiency enhancement in our data centers. We determine this metric using the method recommended by the standard DIN EN 50600 for data centers, which takes the total energy consumed by data centers into account, not just that used to operate the servers. In 2022, the global PUE metric for our T‑Systems data centers was 1.59 (prior year: 1.58). Our most-efficient highly available data center has a PUE of 1.30. We determine the effectiveness of our climate protection measures using key performance indicators (KPIs). The KPI for Energy Intensity for Deutsche Telekom (fixed-network and mobile entities) is shown in the following graphic. The KPI reflects our energy consumption in relation to the volume of data transmitted, thus demonstrating how our network’s energy efficiency has developed in practice. The result stands at 91 (prior year: 102). Effective the reporting year, we no longer report the Carbon Intensity ESG KPI due to consistently low CO₂ emission levels (Scope 1 and 2), which diminished the usefulness of this KPI compared to previous years.

Energy Intensity ESG KPI

Deutsche Telekom Group (fixed-network and mobile entities) in 2022

We are also applying our climate protection efforts to our mobility: Our goal within the Group is to progressively increase the proportion of electric vehicles in our fleet in order to have fully electric mobility in place as soon as possible. We are committed to buying only electric company vehicles in Germany from 2023 onward, for example. As soon as charging infrastructure provides full coverage and sufficient suitable electric vehicles are available, we will also be able to implement full e-mobility in our service vehicles. Currently, around 35 % of new company vehicles ordered in Germany are electric (prior year: 30 %). In addition, our subsidiary Comfort Charge provides e-mobility charging infrastructure in Germany. Comfort Charge currently offers 161 rapid charging stations, and this is set to increase to more than 250 by the end of 2023. Both our own fleet and third-party vehicles can use the vehicle charging stations.

In order to effectively curb climate change, many relevant players must work together, which is why we participate in national and international associations and organizations, such as the Global Enabling Sustainability Initiative (GeSI) and econsense. We are also working systematically on improving climate protection throughout our supply chain. Since 2016, the CDP supplier engagement rating has assessed how well companies have integrated the topic of climate protection into their supply chains. In 2021, we were awarded an A rating by CDP and included on its Supplier Engagement Rating Leader Board. The supplier engagement rating had not yet been confirmed for the reporting year at the time of the publication of this report. Our CDP Supply Chain Coverage ESG KPI indicates the degree to which our procurement volume was covered by our suppliers’ participation in the CDP Supply Chain Program in 2022. A total of over 52 % (prior year: over 70 %) of the procurement volume was covered in 2022 (excluding T‑Mobile US). In the reporting year, 247 suppliers took part in the program (prior year: 268).

Resource conservation

Our goal is to make our product portfolio increasingly sustainable. To achieve this, we take a holistic approach to resource conservation and are committed to the responsible use of resources along our entire value chain. We aim to make products and materials as durable as possible and to ensure they are always recycled at the end of their lifetimes. Also, by providing innovative, network-based solutions, we support our customers in reducing their own CO₂ emissions and contributing to climate protection.

Sustainable products are a key factor in competition for us. Using the Sustainable Revenue Share ESG KPI, we determine how much revenue we (excluding T‑Mobile US) generate from products that make a contribution to sustainability. Revenues for individual product clusters are partially determined using a percentage allocation based on assumptions. In 2022, this share amounted to just over 42 % (prior year: 42 %). We have recorded this indicator since 2014 using our own methodology, which we adapted in 2022. As previously, a product can only be assigned to the sustainable product portfolio provided it is highly likely that the product does not entail any of the seven risks defined in our methodology. Additionally, a product must also offer at least one of five of the sustainability benefits that we updated in the reporting year (or one of six benefits up to 2021). Effective the reporting year, we no longer include the use of renewable energies as a sustainability benefit. Cost savings are still considered as additional information. However, a cost benefit does not constitute a sustainability benefit in and of itself. Under the new assessment methodology, the prior-year figure changes to EUR 16.2 billion. Owing to the fact that the EU taxonomy does not cover the major part of our business model at present, we are reporting this KPI in parallel in the current reporting year.

We will publish detailed information on the Sustainable Revenue Share ESG KPI in our 2022 CR Report at the end of March 2023.

The return, repair, and recycling of old devices should be a matter of course. By 2030, we want all of our products to be recycled at the end of their lifetimes. We also want our suppliers to make their devices and network technology fully circular by 2030. We work closely with manufacturers to be able to offer an increasingly sustainable product range. In Germany and Austria, for example, we stepped up our strategic collaboration with Fairphone – a manufacturer specializing in sustainable smartphones – in the reporting year. In 2021, we introduced the Eco Rating methodology, in cooperation with four other European mobile communications operators. By now, nine network operators are using this rating methodology in 36 countries. More than 250 cell phones from 19 vendors were evaluated by the end of 2022 in terms of their environmental impact throughout their entire life cycle. In this way, we can help our customers make more sustainable purchase decisions and motivate vendors to reduce the environmental footprint of their devices. We are also pursuing our goals in our packaging. Since mid-2022, all new branded products launched in Europe must meet the sustainability criteria laid down in our new packaging guideline. More than two-thirds of the new packaging for smartphones we source from our suppliers also meets these criteria.

To indicate the sustainability benefits of our products to our customers, we make suitable products identifiable with recognized environmental labels. For example, several routers and mesh devices are certified with the Green Product environmental label of the TÜV Rheinland testing service provider. In addition, Telekom Deutschland’s fixed-network telephones to a large part carry the Blue Angel seal of approval. The Blue Angel was also awarded to the joint system of Telekom Deutschland and the service provider Teqcycle Solutions for taking back cell phones. We use our #GreenMagenta and #GoodMagenta labels for those of our products and initiatives that bring sustainability benefits. #GreenMagenta encompasses Deutsche Telekom products, services, projects, actions, and initiatives that make a particularly 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. We have set out strict rules for awarding these two labels. There must be proven sustainability benefits. A comprehensive impact assessment is carried out in order to award the #GreenMagenta label, for example. If there are clear disadvantages for society or the environment, #GreenMagenta or #GoodMagenta will not be awarded, despite any potential advantages. More than 35 products from Germany and European national companies, such as Magenta Telekom in Austria and Makedonski Telekom in North Macedonia, have already been awarded the labels. For example, we have labeled our green network in Germany, which has been operated with electricity from 100 % renewable energy sources since 2021, with #GreenMagenta, while our Speedport Smart 4 router, with a case made from 90 % recycled plastic and with plastic-free packaging, also bears the label.

We will publish detailed information on this in our 2022 CR Report at the end of March 2023.

Conserving valuable resources is also a goal of the Green Pioneers initiative launched by our employees. More than 330 employees from around 70 locations in Germany have joined the initiative thus far. Our Green Pioneers raise awareness among the workforce of resource efficiency in the workplace and also provide inspiration for our core business. In 2022, some Green Pioneers held courses on environmental issues for their colleagues, with more than 1,900 employees in total taking part. As part of Green Action Month, they planted what had been a lawn with a 40 square meter mini-forest, using native plants, trees, and shrubs to offer the greatest possible biodiversity in the smallest area. The Cycling to Work project helps protect the climate and save carbon emissions. The Green Pioneers were also behind the successful installation of e-bike charging stations at several sites. At international level, the CR managers in the national companies also launched relevant local activities. For example, to mark Earth Day, Deutsche Telekom IT Solutions Slovakia carried out a range of activities including a plant exchange, training courses, and workshops on waste reduction and recycling for employees and their children, as well as other volunteer-run activities.

Environmental opportunities arising from the digital transformation

We can use our products, services, and activities to contribute to tackling many environmental and social challenges, as was made clear in a comparison with the 17 sustainability goals (SDGs) adopted by the United Nations. For instance, ICT solutions can help reduce resource consumption in agriculture and increase harvests, shape cities and mobility up for the future in terms of sustainability, stabilize power supply grids, or improve access to education and medical care – areas of application that offer market opportunities for our Company. In order to evaluate the concepts described in this NFS, it is important to also look to the opportunities digitalization opens up for sustainable development.

We use the Enablement Factor to measure our overall performance with regard to climate protection. For this ESG KPI, we calculate the positive CO₂ effects facilitated for our customers through using selected products. Relevant emissions generated by customers are generally taken into account, with the exception of emissions caused by operating video-conferencing facilities. Rebound effects are taken into account based on studies and estimates by experts, where it is possible to do so with reasonable effort. We put this figure in relation to our own CO₂ emissions. According to this figure, the positive CO₂ effects facilitated for our customers in Germany were 276 % higher in 2022 than our own CO₂ emissions (enablement factor of 3.76 to 1). The decline against the prior year (enablement factor of 4.8 to 1) is due to the use of more differentiated data collection methods, as well as a reduction in the number of people using our video conferencing solutions. The usefulness of the KPI depends very much on the underlying assumptions.

Enablement Factor ESG KPI

Deutsche Telekom Group in Germany in 2022

We will publish detailed information on the topic of Corporate Digital Responsibility in our 2022 CR Report at the end of March 2023.

Compliance with the EU taxonomy transparency requirements

The EU taxonomy aims to promote investment flows from the finance sector to businesses that are involved in environmentally sustainable activities. It is thus intended to help the EU implement the European Green Deal, while, at the same time, creating a common understanding of the environmental sustainability of activities and investments. The Regulation also lays down corporate reporting obligations in regard to these economic activities. Criteria were set out in EU legislation in 2021 for the first environmental objectives of the taxonomy “Climate change mitigation” and “Climate change adaptation.” July 2022 saw the addition of further criteria for specific forms of energy generation.

Under the Taxonomy Regulation, the first step is to ascertain the taxonomy-eligible economic activities of a company. These are activities that are covered by the EU taxonomy and that therefore potentially contribute significantly to achieving the environmental objectives. The second step is to check whether these activities are taxonomy-aligned. An activity is considered taxonomy-aligned if it meets the technical screening criteria listed in Annexes I and II of Delegated Regulation (EU) 2021/2139 to qualify as contributing substantially to at least one environmental objective, does not cause significant harm to any of the other environmental objectives, and complies with the minimum social standards (minimum safeguards) stipulated in the Taxonomy Regulation (EU) 2020/852 in regard in particular to respecting human rights and complying with labor law.

As Deutsche Telekom belongs to the information and telecommunications industry, two of the economic activities currently listed in the EU taxonomy are relevant for the environmental objective “Climate change mitigation” (taxonomy-eligible) in respect of its core business:

• Data processing, hosting and related activities (8.1)
• Data-driven solutions for GHG emissions reductions (8.2)

As we provide charging infrastructure for electric vehicles through our subsidiary Comfort Charge, the following additional economic activity, which is pertinent to the environmental objective “Climate change mitigation,” is taxonomy-eligible:

• Infrastructure enabling low-carbon road transport and public transport (6.15)

No economic activities relevant to the environmental objective “Climate change adaptation” were identified in the 2022 financial year.

The EU taxonomy does not currently include criteria for the economic activity “Provision and operation of a network infrastructure for telecommunications.” The bulk of our business model is therefore not yet included in the taxonomy, which means that we cannot describe most of our core business as taxonomy-eligible. The EU taxonomy thus offers no way to illustrate our contribution to climate change mitigation in respect of our network infrastructure. We therefore lobby in a range of business and industry associations for the inclusion of suitable, relevant criteria in the EU taxonomy to describe our core activities.

On the other hand, the EU taxonomy does provide a list of cross-cutting activities outside of our core business that are relevant for our general corporate infrastructure, such as fleet and facilities management. The following cross-cutting activity for the environmental objective “Climate change mitigation” is relevant for Deutsche Telekom (taxonomy-eligible):

• Transport by motorbikes, passenger cars, and light commercial vehicles (6.5)

The three tables below provide an overview of our taxonomy-aligned economic activities for the reporting year. They break the figures down into both absolute values and the applicable percentage of Group turnover, capital expenditure, and operating expenditure.

Method for ascertaining taxonomy eligibility and alignment

When ascertaining the taxonomy-eligibility of economic activities, we focused on our core business activities taking cost-benefit aspects into account.

Those activities identified as taxonomy-eligible were checked individually for their taxonomy alignment. As we manage climate risks centrally at Group level, determining whether an activity causes no significant harm to the environmental objective “Climate change adaptation” took place at a higher level for all taxonomy-eligible activities. The sole exceptions to this are the United States operating segment and our national companies in Greece and Hungary, where the management of climate risks is still under development and does not yet fully conform with the EU taxonomy requirements. We therefore report taxonomy-eligible activities that are allocable to the United States operating segment and our national companies in Greece and Hungary as non-taxonomy-aligned for the reporting year. We ensure compliance with minimum social safeguards using a Group-wide management system.

To avoid significant harm to the environmental objective “Climate change adaptation,” checking for taxonomy alignment of all of the economic activities listed above requires an analysis of potential physical climate risks. As part of our security and risk management, we regularly examine our critical infrastructure to check for physical climate risks and take climate adaptation measures to minimize potential risks. The climate risk analysis is carried out using a recognized software platform based on the climate scenarios defined by the Intergovernmental Panel on Climate Change (IPCC). No material climate risks as defined in the taxonomy requirements were identified in connection with the taxonomy-eligible activities.

The minimum social safeguards require a management system to ensure compliance with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the ILO Core Conventions and the International Bill of Human Rights. We have made an express commitment to the principles listed above, and we perform human rights due diligence using a risk-based management system encompassing both the Group and our supply chain that we use to monitor compliance with social and environmental standards. We also maintain a process of trust-based dialog with employees’ representatives and trade unions. To prevent corruption and to safeguard fair competition, Deutsche Telekom has a compliance management system which is aligned with the Company’s risk situation.

For further information on minimum social standards, please refer to the sections “Collaboration with employees’ representatives and trade unions,” “Connect the unconnected,” “Labor standards in our own business area and at our suppliers,” and “Compliance management system,” and to the 2022 CR Report, which will be published at the end of March 2023.

Economic activities that are relevant to turnover

The taxonomy-eligible economic activity Data processing, hosting and related activities (8.1) covers “Storage, manipulation, management, movement, control, display, switching, interchange, transmission or processing of data through data centers, including edge computing.” Of our Group-wide business activities, our Systems Solutions operating segment (T‑Systems) comes under this sector. When evaluating the taxonomy eligibility of activities, we primarily take T‑Systems’ global business into account. As well as data centers operated by T‑Systems, we also included data centers operated on co-locations in the evaluation.

To ensure the data centers make a substantial contribution to climate change mitigation in accordance with the EU taxonomy, they must comply with the EU Code of Conduct on Data Centre Energy Efficiency. Five of the eight sites operated directly by T‑Systems comply with this Code of Conduct. As we have not yet verified compliance with the Code of Conduct through external audits in accordance with EU taxonomy requirements, we are not classifying the data centers used for economic activity 8.1 as taxonomy-aligned in the reporting year. In addition, in accordance with the EU taxonomy the global warming potential of refrigerants that need to be used in data center cooling systems may not exceed a value of 675. This criterion is currently met by one data center that was fully refurbished in 2022. The other sites currently still use industry-typical refrigerants that meet the criteria of the EU directive on fluorinated greenhouse gases. We will make the change to taxonomy-aligned refrigerants as part of the regular refurbishment program for our data centers. We will carry out a detailed review of the individual data centers’ compliance with the criteria for preventing significant harm to the remaining environmental objectives in each case as soon as they fulfill the aforementioned climate change mitigation requirements in full.

We associate those solutions and products in the Group that, in accordance with the description in the EU taxonomy, are “predominantly aimed at the provision of data and analytics enabling GHG emission reductions” with the economic activity Data-driven solutions for GHG emissions reductions (8.2). These are solutions and products that have clear potential to enable users to save CO₂ emissions. When selecting them, we take into account solutions and products that are incorporated into our Enablement Factor and Sustainable Revenue Share ESG KPIs, and/or that have been awarded our #GreenMagenta label. We thus identified the following taxonomy-eligible services within our Group-wide business activities:

• Business-related video conferences (saves travel-induced CO₂ emissions)
• Workplace and cloud solutions (increases energy efficiency by improving server utilization)
• IoT solutions (saves CO₂ emissions through, for example, efficient light switching)

We provide these services to a significant financial extent in the Germany operating segment, in our major subsidiaries in the Europe operating segment, and in the Systems Solutions operating segment.

The technical screening criteria require a life-cycle analysis as evidence of the taxonomy alignment of the solutions in question. These must show that a solution results in substantial greenhouse gas emission reductions both over and beyond its entire life cycle in comparison with the relevant reference solution available on the market. We understand reference solutions to be alternative solutions that would typically be used in a company in our footprint markets. This assumes that the companies are aligned with best practices. The technical screening criteria do not stipulate a specific threshold for “substantial” reductions in greenhouse gases in comparison with the reference solution. As there are differences in the technologies of the various taxonomy-eligible solutions, we have reviewed each solution separately to determine the point from which greenhouse gas savings can be considered “substantial” in accordance with scientific findings. The requisite life-cycle analyses have been prepared for business-related web conferencing solutions and for the cloud solutions Future Cloud Infrastructure, Open Telekom Cloud, and SAP Cloud Services. To date, we have not prepared a life-cycle analysis for the IoT solutions and therefore we do not report them as taxonomy-aligned for the reporting year.

By comparing in-person meetings with taxonomy-eligible business-related web conferencing solutions included in the analysis, evidence of significant greenhouse gas reductions was provided. For instance, hybrid meetings reduce greenhouse gas emissions by around 28 % (small meetings) or 37 % (large meetings).

Of the workplace and cloud solutions covered by the life-cycle analysis, Future Cloud Infrastructure reduced greenhouse gas emissions by around 16 % through the use of decentralized data centers operated by our customers themselves. The life-cycle analysis also found that using the Open Telekom Cloud or SAP Cloud Services reduced greenhouse gas emissions by 50 % compared with the reference scenario. This scenario is based on the assumption that our customers use their own, decentralized server infrastructure for storing and processing data rather than the cloud solution. We therefore classify all web conferencing, workplace and cloud solutions included in a life-cycle analysis as taxonomy-aligned.

For the aforementioned solutions, we exclusively use infrastructure located in Germany. The requirements for the “Transition to a circular economy” conform to current EU legislation, which we enforce as part of our environment management activities at our EU sites. The economic activity Infrastructure enabling low-carbon road transport and public transport (6.15) covers the construction, modernization, maintenance, and operation of such infrastructure, which also includes electric vehicle charging stations. Comfort Charge’s charging solutions encompass the installation, operation, and maintenance of charging infrastructure for electric vehicles. In addition to e-charging infrastructure operated on publicly accessible Deutsche Telekom sites, this also includes services related to the planning, construction, and maintenance of e-charging facilities at our customers’ premises. This means that both of the business areas of Comfort Charge can be assigned to this taxonomy-eligible activity. According to the technical screening criteria, electric vehicle charging stations alone make a substantial contribution to the environmental objective “Climate change mitigation.” Significant harm to the environmental objectives “The sustainable use and protection of water and marine Resources” and “The protection and restoration of biodiversity and ecosystems” can be ruled out since the charging stations are built on existing parking lots. The further regulations in respect of the circular economy and pollution prevention and control largely constitute elements of current EU legislation. As we build and maintain charging infrastructure in collaboration with service providers for whose activities no evidence has yet been provided of compliance with the criteria for a circular economy, we are reporting the Comfort Charge business for the reporting year as non-taxonomy-aligned.

Cross-cutting activities

Deutsche Telekom has a vehicle fleet that includes both company cars and service vehicles. The economic activity Transport by motorbikes, passenger cars, and light commercial vehicles (6.5) is therefore relevant as a cross-cutting activity that applies to the purchase, the lease, and the operation of vehicles of the classes M1 (passenger cars) and N1 (light commercial vehicles with a maximum weight of 3.5 t). As we are pushing forward with the transition to a fully electric fleet, especially in Germany and the EU, the majority of new vehicles purchased already meet the CO₂ thresholds set in the EU taxonomy. We were also able to provide evidence of the alignment of these vehicles with the other key EU taxonomy requirements, which are based on current EU legislation for new vehicles. As the choice of tires is left to the vehicle users themselves, we could not provide evidence of the taxonomy alignment of tires for the reporting year. We therefore report capital expenditure associated with our vehicle fleet as non-taxonomy-aligned.

Calculation of the taxonomy KPIs

The total Group figures used as the basis for calculation in accordance with the EU taxonomy in the reporting year amounted to EUR 114.2 billion (turnover), EUR 38.5 billion (capital expenditure), and EUR 0.4 billion (operating expenditure). The definition of turnover according to the EU taxonomy is equivalent to net revenue in our consolidated income statement contained in the consolidated financial statements. The relevant capital expenditure was determined on the basis of the consolidated statement of financial position contained in the consolidated financial statements and is determined as the sum of additions and changes within the consolidated group under property, plant and equipment, intangible assets (excluding goodwill), and right-of-use assets. In line with the EU taxonomy regulations, the disclosures on capital expenditures do not form part of a capital expenditure (capex) plan. The EU taxonomy defines costs that relate to research and development; building remediation measures; short-term leases; maintenance, and repair; and any other direct expenditures relating to the day-to-day maintenance of property, plant and equipment as relevant operating expenditure.

The disclosures on taxonomy eligibility and taxonomy alignment in terms of turnover, capital expenditure, and operating expenditure are directly assigned at the level of product groups to either the operation of data centers in accordance with economic activity 8.1. or the provision of ICT solutions in accordance with economic activity 8.2. The same applies to economic activity 6.15; the expenditure disclosed for this activity is assigned directly to the installation and operation of charging solutions. We do not generate any turnover with cross-cutting activities. Exclusively capital expenditure was assigned to economic activity 6.5.

To avoid double counting under the EU taxonomy, T‑Systems’ taxonomy-eligible cloud solutions are only attributed to economic activity 8.2; they are not disclosed under economic activity 8.1. In addition, capital and operating expenditures were only assigned to the cross-cutting activity 6.5 if a direct correlation between the measures financed and the turnover-relevant economic activities 8.1, 8.2, and 6.15 was excluded.

As the EU taxonomy does not yet adequately cover our core business, an aggregate view of the taxonomy eligibility of all economic activities results in very low proportions again in 2022 of turnover (1.8 %), capital expenditure (0.8 %), and operating expenditure (33.5 %) for the Deutsche Telekom Group. The largest proportion of taxonomy-eligible capital expenditure can be allotted to property, plant and equipment (69.6 %), followed by intangible assets (18.1 %) and right-of-use assets (12.3 %).

The largest proportion of taxonomy-eligible turnover, capital expenditure, and operating expenditure can be allotted to economic activity 8.1: based on the relevant total figures for the Group, taxonomy-eligible business activities for data processing and hosting represented 1.0 % of turnover, 0.4 % of capital expenditure, and 19.0 % of direct expenses. To enable a statement of taxonomy eligibility at segment level, too, we also report supplementary KPIs for the Systems Solutions operating segment. The taxonomy-eligible portion, determined using the same calculation logic, is 36.0 % in relation to external turnover of the segment, and 62.6 % in relation to capital expenditure.

In second place, with 0.8 % taxonomy-eligible turnover, is economic activity 8.2, to which the business-related web conferencing solutions make a substantial contribution. The Comfort Charge business encompassed by economic activity 6.15, which in the 2022 financial year did not generate any material taxonomy-eligible turnover, is still under development. Cross-cutting activity 6.5 has only a supporting function for Deutsche Telekom’s core business.

In the 2022 financial year, the taxonomy-aligned proportion of all economic activities of the Deutsche Telekom Group was 0.5 % of turnover, 0.0 % of capital expenditure, and 0.4 % of operating expenditure. The taxonomy-aligned proportion is attributable to economic activity 8.2 Data-driven solutions for GHG emissions reductions. For the Systems Solutions operating segment, the taxonomy-aligned proportion of turnover was 12.3 %, 0.1 % of capital expenditure, and 0.8 % of operating expenditure.

Given the high standards laid down in the technical screening criteria, the transformation is expected to be a lengthy process. We plan to increase the taxonomy alignment of our economic activities on a continual basis.

For further information on turnover, please refer to the consolidated income statement in the consolidated financial statements or to Note 20 “Net revenue” in the notes to the consolidated financial statements.

For further information on capital expenditure, please refer to Note 5 “Intangible assets,” Note 7 “Property, plant and equipment,” and Note 8 “Right-of-use assets” in the notes to the consolidated financial statements. The capital expenditure given here also includes the additions of all non-current assets and disposal groups held for sale in the 2022 financial year.

For further information on operating expenditure, please refer to Note 26 “Other operating expenses” in the notes to the consolidated financial statements.