Aspect 4: Respecting human rights

There are still places in the world where human rights are not a given. As a responsible, globally active company, we take internationally recognized human rights and environmental concerns seriously and acknowledge our corporate responsibility. This not only applies within the Company, because we also take our responsibility to and with our business partners and our more than 20,000 direct suppliers in more than 150 countries seriously.

In our Code of Human Rights, we spell out in detail our commitment to respecting and promoting human rights and environmental concerns everywhere we operate – including our suppliers and business partners. We take into account the legal requirements when developing the Code of Human Rights. It was expanded in the reporting year by incorporating the content of the existing Employee Relations Policy, among other aspects. The Code also commits us to internationally recognized human rights and environmental law benchmarks, such as the United Nations International Bill of Human Rights, the core labor standards of the International Labour Organization (ILO), the OECD Guidelines for Multinational Enterprises, and the United Nations Guiding Principles on Business and Human Rights. In addition to this self-commitment, we also recognize the minimum social safeguards which, in line with the provisions of the EU Taxonomy, are necessary conditions for the taxonomy alignment of economic activities. The principles and expectations described in the Code are aimed in equal measure at our employees and at our suppliers and business partners. We review the Code and the due diligence processes it describes each year and publish the results of the human rights and environmental risk analyses conducted in mandatory and voluntary reporting formats, such as the annual report in accordance with the Supply Chain Due Diligence Act or the UNGC Communication on Progress.

All Group companies in Deutsche Telekom AG’s business area have implemented the Code of Human Rights. We revised the Code of Human Rights in the reporting year so as to better reflect, for example, legal requirements such as the German Act on Corporate Due Diligence in Supply Chains (Lieferkettensorgfaltspflichtengesetz – LkSG). Together with the annual report on the results of the risk analyses, the Code of Human Rights forms our human rights policy statement within the meaning of the LkSG.

The revised Code of Human Rights was adopted by the Group Board of Management in 2023 and subsequently published; adoption of the revised Code by the management bodies of the Group companies included began in 2023.

Due diligence processes in the Group

We reviewed and enhanced our human rights and environmental due diligence processes in 2022 and 2023 to better reflect the new statutory requirements among other factors, e.g., under the Supply Chain Due Diligence Act. We could be exposed to country- and supplier-specific risks in particular because of our global procurement activities.

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

The Board of Management of Deutsche Telekom AG and the management of the individual Group companies are responsible for implementation of and compliance with our due diligence processes. Periodic and/or event-driven internal reporting on human rights and environmental results in decision-making bodies (e.g., management bodies) is designed to ensure that informed decisions can always be made.

We will publish detailed information on the results of the annual risk analysis in our 2023 CR Report and in our 2023 LkSG Report.

In order to implement our self-commitments and the legal requirements, we have introduced a comprehensive program for minimizing risks, which we are constantly updating. The core elements of the program are regular risk analyses in our own business area and at our suppliers’; a policy statement on human rights; awareness-raising among employees, suppliers, and business partners; a mechanism for lodging complaints; and reporting. We derive appropriate preventive and remedial measures from the results of the annual and event-driven risk analyses. We also perform verification and effectiveness audits. Examples of these include on-site auditing measures at our own Group companies in our own area of business or at suppliers, e.g., in the form of human rights impact assessments (HRIAs)/social audits, as well as certification in the area of occupational health and safety. The focus here is on respecting human rights in relation to working conditions. These systematic and comprehensive audits give us a deeper insight into the actual conditions on site, enable us to respond even more specifically on an event-driven basis and to develop and implement solution concepts in partnership with all parties involved. Based on the analysis results from 2023, we will examine whether, and to what extent, such on-site audits are necessary in 2024. There were no grounds for risk-related on-site audits in our own business area in the reporting year. We performed extensive auditing measures at our suppliers.

For further information, please refer to the section “Labor standards at our suppliers.”

As a U.S.-listed company, T‑Mobile US conducts a risk assessment using its own methodology, on which it regularly reports to the relevant bodies, which also include representatives of Deutsche Telekom AG. Before T‑Mobile US selects suppliers, a centralized Third-Party Risk Management (TPRM) process screens for anti-corruption, global sanctions, and human rights violations, as well as financial, security, reputational, and environmental risks. Supplier risk assessments are performed on an ongoing basis depending on the risk profile of the supplier.

Via the TellMe whistleblower and complaints portal, employees and external third parties can submit information and report complaints – anonymously, if needed. A total of five reports and complaints relating to human rights or environmental law were received via TellMe in the reporting year. In particular, risks relating to civil engineering work for the rollout of optical fiber were derived from the complaints and tip-offs received and factored into the annual risk analysis.

Labor standards at our suppliers

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. We have anchored the topic of sustainability and the resulting requirements in all procurement processes (excluding T‑Mobile US). Procurement is responsible for implementation. Group Corporate Responsibility works with the procurement function to strategically enhance sustainability in procurement.

Our sustainability principles and their application in procurement are set out in the Procurement Practices in the Global Procurement Policy. In addition, there is a policy giving purchasing officers an overview of the CSR criteria that are to be taken into account at each stage of the procurement process. In the reporting year, we rolled out various sustainability materials and training courses to our employees in the context of the Supply Chain Due Diligence Act.

We will publish detailed information on activities relating to implementation of the Supply Chain Due Diligence Act in our 2023 CR Report.

We require our suppliers to accept the principles of our Supplier Code of Conduct and meet the associated requirements. To minimize any risks relating to sustainability shortcomings and support suppliers in further developing their sustainability performance, we use a comprehensive risk management system for suppliers. We start by performing a risk assessment of all product groups. We then carry out a comprehensive risk analysis for all suppliers in every category. Specialized companies assess our suppliers with regard to financial, CSR, and compliance risks (excluding T‑Mobile US). We also generally apply a 20 % weighting to environmental objectives, our suppliers’ carbon footprint, and, in the case of individual product groups, other criteria, such as social sustainability. In this way, we discover if there is any increased risk in terms of specific sustainability aspects at any of our suppliers.

Sustainability assessments and reviews are additionally conducted for selected suppliers of product groups in high-risk categories. Depending on their individual sustainability performance and risk classification, we use a range of instruments, for instance, sustainability ratings by external providers, mobile employee surveys, and on-site supplier audits (social audits). Our focus here is not only on our direct suppliers but also, to the extent possible, on downstream suppliers. We enhance the effectiveness of our audits through our cooperation with the Joint Alliance for CSR industry initiative (JAC, formerly Joint Audit Cooperation), which comprises 27 globally active telecommunications companies. In 2023, we carried out a total of 150 audits (prior year: 98) – 137 social audits (prior year: 83) and 13 mobile surveys (prior year: 15) – of which 62 (prior year: 40) at our direct and 88 (prior year: 58) at our indirect suppliers. Since 2010, we have carried out 1,060 audits (prior year: 910) within the framework of the JAC.

We work closely with selected suppliers to steadily improve their sustainability performance. Our previous Supplier Development Program, which we used to encourage the continued development of strategically relevant suppliers in key sustainability issues such as environmental protection, working hours regulations, and health and safety, was transitioned to the JAC industry initiative in the reporting year. The program is currently being refined in the JAC. We hosted the JAC General Assembly in the reporting year and participated in an industry dialog with other telecommunications companies. Issues discussed in the dialog included the further development of auditing requirements, improvements in transparency, and the effective identification of measures for telecommunications-specific industry risks. One outcome of this dialog was the establishment of dedicated working groups, in which Deutsche Telekom will participate in 2024.

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 suppliers on whom an established external service provider carried out checks in the reporting period^a 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 99.98 % in 2023 (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, or supplier visits. In 2023, the share of these CR-verified suppliers was 66.17 % (prior year: 64.1 %). 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.