Impact of climate change

Deutsche Telekom wants to play a leading role in climate change mitigation and environmental protection in the context of its current and future business activities and is constantly defining new goals to achieve this. For example, in 2021 Deutsche Telekom has set itself the goal of achieving climate neutrality in the Company by the end of 2025 (Scope 1 and 2). As an interim goal on the journey towards climate neutrality along the entire value chain, Deutsche Telekom aims to reduce CO₂ emissions across Scopes 1 to 3 by 55 % in absolute terms by 2030 compared with 2020. Deutsche Telekom then wants to reach net zero across all three scopes along the entire value chain by 2040 at the latest. Since 2021, the Group has covered 100 % of its electricity demand with renewable energy. This is achieved through power purchase agreements and other forms of direct purchase, such as through guarantees of origin.

Deutsche Telekom updated its climate scenario analysis in 2024 and carried out the associated resilience analysis:

• Climate change risks are already visible in the form of increasingly extreme weather conditions. Such storm events could damage the infrastructure and disrupt network operation with direct or indirect effects on operations. Deutsche Telekom is prepared for the rising impacts of physical risks, such as changes in precipitation patterns and extreme weather variability, and has already implemented comprehensive adaptation actions. Nevertheless, material risks with a very high risk extent but a very low probability of occurrence may result from extreme weather events.
• In addition, an analysis was made of how resilient Deutsche Telekom’s business model is to the potential future consequences of climate change. For this, transition aspects were considered, i.e., factors associated with the transition to a low-emission, climate-resilient economy. These may give rise to transition risks, e.g., as a consequence of political change or legislation. The measures Deutsche Telekom is taking to counter these risks include measuring the Group’s own energy efficiency and finding ways to improve it. The ESG targets agreed in 2021 for Board of Management remuneration with regard to the respective annual energy consumption as well as the planned annual CO₂ emissions for Scope 1 and 2 also contribute to achieving the climate targets and energy efficiency measures.

The analysis showed that Deutsche Telekom is highly resilient overall to both material transition risks and physical climate risks. Furthermore, Deutsche Telekom has not identified any assets and business activities that are incompatible with a transition to a carbon-neutral economy or that require significant effort to be compatible with a transition to a carbon-neutral economy. No critical climate-related assumptions have been used to date to measure assets and liabilities in the consolidated financial statements.

For more information, please refer to “ESRS E1 – Climate change” in the section “Combined sustainability statement” of the combined management report.

Deutsche Telekom is committed to the responsible use of resources along its entire value chain. In addition to conserving and avoiding resources, the aim is to make products and materials as durable as possible and to ensure they are returned into circulation at the end of their lifetimes. Longer use phases and reuse not only save on resources, but also reduce energy use and emissions, thus at the same time contributing to climate change mitigation. As part of the Europe-wide resource efficiency strategy, the European national companies have voluntarily committed to being fully circular in technology and devices by 2030.

The growing scarcity of raw materials due to wars, pandemics, and in the long term also the finite nature of resources, poses a financial risk to Deutsche Telekom’s business activities. Deutsche Telekom is already facing rising material, production, logistics, and energy costs due to scarcity.

For more information on this, please refer to “ESRS E5 – Resource use and circular economy” in the section “Combined sustainability statement” of the combined management report.