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. In addition, as already outlined, we support the United Nations Sustainable Development Goals.

We further refined our CR strategy in the reporting year, taking into account the results of the materiality analysis. We identified four key areas in which we want to act as a role model:

1. Our commitment to climate-neutral business practices
2. Our determined efforts to ensure the circularity of our products and services
3. Our pursuit of diversity, equity, and inclusion, as well as our investment into future skills
4. Our determination to help shape a digital society that is based on our fundamental democratic values and in which all people can participate safely, competently, and with autonomy

We also consider good governance to encompass an internal control system and a risk management system, including a compliance management system which is aligned with the company’s risk situation. Maintaining data protection and security, engaging with the fundamental principles of digital responsibility, upholding human rights, shaping sustainable supply chains, investing capital based on ecological and social criteria, and ensuring communication about our environmental and social sustainability activities is transparent are additional meaningful aspects of good governance.

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 the Group-wide CR strategy, including the associated policies and guidelines. Its aim is to further develop our corporate culture, particularly in terms of sustainable innovation and social responsibility. As of January 1, 2022, GCR has been transferred from the Board of Management department for Human Resources and Legal Affairs into the department of the Chairman of the Board of Management. By taking this decision, the Supervisory Board and the Board of Management are emphasizing how seriously Deutsche Telekom takes its social and environmental responsibility. The different Group business units and segments are responsible for implementing the CR strategy. Specific measures are driven by the CR managers of each unit, who work together within the international CR Manager Network.

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. To further shore up the implementation of our CR ambitions throughout the organization, we refined the CR Policy during the reporting year.

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

As part of our CR controlling and reporting activities, we record ESG data and performance indicators. We use this data primarily to calculate our ESG KPIs, which we use to measure and manage our CR performance. The non-financial performance indicators “energy consumption”, “CO₂ emissions” (Scope 1 and 2), and “energy intensity” are also elements of the Group’s higher-level controlling processes. Alongside the ESG KPIs, we also report other metrics with the aim of meeting all internal and external transparency requirements.

Growing numbers of investors take sustainability aspects into account in their investment decisions (Socially Responsible Investment, 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. We refined the methodology in the reporting year and have switched to monitoring sustainably managed shares at fund level and no longer at an institutional level. For better comparability with other companies, the total number of shares given pertains to the number of Deutsche Telekom shares in free float. Our commitment to greater sustainability is paying off: as of December 31, 2021, around 31.3 % of all T-Shares were held by investors who show concern for environmental, social, and governance criteria in their investment choices.

As part of our CR strategy, we have taken part successfully for many years in ESG ratings, which we select based on reputation, relevance, and independence. When rating agencies give high marks to our social and ecological commitment, the T-Share is included in the financial market’s sustainability indexes. In 2022, the T-Share was once again listed in all sustainability indexes relevant for us as a company.

Listing of the T-Share in sustainability indexes/ratings

Rating agency	Indexes/ratings/ranking	2022	2021	2020	2019	2018
S&P CSA	DJSI World	✔	✔	✔	✔	✔
	DJSI Europe	✔	✔	✔	✔	✔
	S&P ESG Index Series	✔	✔	✔	✔	─
CDP	STOXX Global Climate Change Leaders	✔	✔	✔	✔	✔
	Supplier Engagement A-List	o	✔	✔	✔	✔
MSCI	ESG Universal Indexes	✔	✔	✔	✔	✔
ISS-ESG	Prime Status (Sector Leader)	✔	✔	✔	✔	✔
Bloomberg	Gender Equality Index	✔	✔	✔	✔	✔
Sustainalytics	STOXX Global ESG Leadersa	✔	✔	✔	✔	✔
	UN Global Compact 100	✔	✔	✔	✔	✔
FTSE Financial Times Stock Exchange	FTSE4Good	✔	✔	✔	✔	✔
Moody’s	Euronext indexes based on Moody’s ESG data	✔	✔	✔	✔	✖
✔ Listed     ✖ Not listed     ─ Index did not yet exist in the relevant year     o Result not available at the date of publication a Listed in other indexes in the relevant universe.

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