ESRS S2 – Workers in the value chain

ESRS 2 SBM-3 S2 – Material impacts, risks, and opportunities and their interaction with strategy and business model

In our double materiality assessment, we considered possible impacts, risks, and opportunities related to workers in the value chain. The table below shows the material impacts of our business activities on society and the environment that we identified in the process.

The insights provided by our regular risk analysis in accordance with the German Act on Corporate Due Diligence in Supply Chains (Lieferkettensorgfaltspflichtengesetz – LkSG), which we last carried out in 2025, form the basis for the review of our material impacts (excluding T‑Mobile US). So that due regard could be given to T‑Mobile US, the company was specifically involved in this review. In two cases, the impacts were assessed differently depending on whether they were classified as actual or potential.

We provide overarching information on how material impacts, risks, and opportunities interact with our strategy and business model in the section “ESRS 2 SBM-3.”

Workers in our value chain who are affected by material impacts include the following:

• All workers working for direct and indirect suppliers in the upstream value chain
• Workers who are particularly vulnerable to adverse impacts whether due to their inherent characteristics or to the particular context, such as trade unionists, migrant workers (particularly in civil engineering), home workers, women, or young workers; migrant workers are particularly prevalent in civil engineering

They do not include:

• Workers who work at Deutsche Telekom locations but are not members of our own workforce; these include self-employed workers and workers provided by third-party entities primarily engaged in ‘employment activities’
• Workers working for entities in our downstream value chain (e.g., those involved in the activities of logistics or distribution providers, franchisees, retailers)
• Workers working in the operations of a joint venture or special purpose vehicle in which Deutsche Telekom holds investments

For many years, Deutsche Telekom has had processes and structures in place to ensure compliance with its human rights and environment-related due diligence. These are aligned with international benchmarks. Part of our work involves identifying groups of individuals that may be positively or adversely impacted by our business activities. They include employees in our Group companies, employees at our direct and indirect suppliers, customers, children and young people, as well as people in affected communities. We consulted external and internal experts to identify these groups of individuals. When carrying out our due diligence processes, we pay special attention to the interests of vulnerable groups such as children, young people, women, migrant workers, and members of national or ethnic, religious, or linguistic minorities. At least once per year, we review whether our identification of vulnerable groups within the upstream value chain and in our own operations is still valid. We regularly perform this review after conducting our annual human rights and environment-related risk analysis under the LkSG.

ESRS S2‑1 – Policies related to value chain workers

We assess all material negative impacts on society and the environment related to value chain workers. Management of these impacts and the resulting requirements are embedded in our procurement practices, which we explain in the following.

Deutsche Telekom (excluding T‑Mobile US) has put the Supplier Code of Conduct in place so that its ethical, social, and environmental principles and values can be observed along the entire upstream value chain. The principles are set out in the Code of Conduct (see section “ESRS G1‑1”) and in the Code of Human Rights (see section “ESRS S1‑1”).

The Supplier Code of Conduct includes:

• Promotion of occupational health and safety at work
• Payment of adequate living wage
• Protection of freedom of association and the right to collective bargaining
• Prohibition of unequal treatment in employment
• Prohibition of child labor, forced labor and all forms of slavery such as trafficking in human beings
• Prohibition of the use of raw materials that are the subject of conflict

Both the Code of Human Rights and the Supplier Code of Conduct are based on the requirements of the LkSG. T‑Mobile US does not fall within the scope of the LkSG and has its own Code of Business Conduct, Human Rights Statement, and Supplier Code of Conduct. The Supplier Code of Conduct addresses the above-mentioned principles and expectations as well. In addition, the T‑Mobile US Responsible Sourcing Policy applies to the procurement of goods that include raw materials that are potentially mined in conflict-affected or high-risk regions.

Deutsche Telekom’s Supplier Code of Conduct is a component of its general purchasing terms and conditions of purchase, but is not intended to replace the laws and regulations in force in any country where our suppliers operate. It seeks to encourage and respect these laws and regulations and ensure that they are faithfully and effectively enforced. We expect our suppliers to respect internationally accepted human rights by accepting the Supplier Code of Conduct and, where necessary, to take effective actions to remedy human rights abuse of any kind and fair labor violations. They are also expected to disclose any such incidents, including potential violations, and to cooperate in investigations into such actual or alleged violations.

With Deutsche Telekom AG’s Code of Human Rights and Supplier Code of Conduct, we have also made a commitment to ensure compliance with the following internationally recognized standards:

• Core labor standards of the International Labour Organization (ILO) and the Guidelines for Multinational Enterprises of the Organization for Economic Co-operation and Development (OECD)
• The United Nations’ Universal Declaration of Human Rights (UN)
• Principles of the UN Global Compact
• ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNU Declaration)
• United Nations Guiding Principles on Business and Human Rights (Ruggie Principles)

These benchmarks also provide the basis for the minimum social safeguards in line with the provisions of the EU Taxonomy, which we adhere to using a risk-based management system to monitor compliance. This covers both our Group (excluding T‑Mobile US) and our supply chain and is used, among other things, to record and evaluate reports of possible violations of the above principles. In the reporting year, isolated reports of possible violations were submitted through the established complaints channels. In upholding our human rights policy commitments to our own workforce, we maintain trust-based dialogue with employees’ representatives and trade unions.

Anyone who identifies human rights violations in connection with Deutsche Telekom along our supply chain can report their observations using the channels described in the section “ESRS S2‑3” (complaints mechanism). Our risk incident process in place in accordance with the LkSG is also described there. This is triggered if we become aware of a violation of the requirements laid down in Deutsche Telekom’s Code of Human Rights and Supplier Code of Conduct. The information received is incorporated into the regular LkSG risk analysis. This analysis is part of risk management and serves to identify human rights and environmental risks in our own business areas and at our direct suppliers. If, on the basis of our performed risk analysis, we establish that a violation of our human rights obligations has already occurred or is imminent, our processes provide for taking or facilitating immediate remedial action. These aim to prevent or end the violation or to minimize its extent. T‑Mobile US performs a risk assessment using a proprietary methodology, which is described in more detail in the section “ESRS S2‑4.”

Responsibility for sustainability in procurement lies with the Board of Management department for Finance and the Group’s procurement functions. Other functional units and sustainability management provide topic-specific support.

Deutsche Telekom created the roles of human rights officer and LkSG officer and established an LkSG Risk Board in order to monitor the effectiveness of the LkSG management system. Where required to under national regulations, Group companies have appointed monitoring roles in the same form for their business areas. In accordance with the provisions of the LkSG, our own business areas encompass all Group companies over which Deutsche Telekom AG exercises a decisive influence. They comprise all activities required for the manufacture and use of products and the provision of services.

ESRS S2‑2 – Processes for engaging with value chain workers about impacts

Deutsche Telekom (excluding T‑Mobile US) regularly reviews the working conditions at its suppliers’ production sites within the scope of audit programs. To do this, we ask workers in the upstream value chain, for example, to incorporate their perspectives into our due diligence processes as part of the mobile workers’ surveys. The suppliers at which we carry out these surveys are chosen based on set criteria such as new products, critical media reports or reports by non-governmental organizations (NGOs). This gives our suppliers’ employees an opportunity to provide anonymous information about the social and ecological situation at their company, including on any cases of discrimination. The surveys are primarily used to gain an impression of the local working conditions in order to then initiate further actions as needed, such as specific on-site reviews (social audits). The social audits are conducted by external auditors. While formal procedures to include the perspectives of workers in the upstream value chain are not currently in place, T‑Mobile US conducts supplier audits as needed to assess compliance with relevant requirements.

We focus our audit activities on strategically important and particularly risky suppliers. They are audited regularly, for example in relation to labor and social standards. This is how we obtain transparency about the risks in our supply chain. If production facilities are outsourced, these indirect suppliers are also audited.

The social audits are conducted within the framework of our cooperation with the Joint Alliance for CSR industry initiative (JAC), which comprises 31 globally active telecommunications companies (Deutsche Telekom excluding T‑Mobile US). This alliance enables us to cover a larger number of relevant suppliers in our supply chain.

ESRS S2‑3 – Processes to remediate negative impacts and channels for value chain workers to raise concerns

If it is known that suppliers have violated specific human rights or environmental regulations, the risk incident process in place at Deutsche Telekom (excluding T‑Mobile US) provides for the following: In the first step, the central procurement organization verifies the plausibility of the suspected case as part of an ad hoc risk analysis and, if the result is positive, forwards it to an expert committee. This committee comprises representatives from GCR, Law & Integrity, and Procurement and is coordinated by the corporate procurement organization. If the committee decides to obtain a statement from the supplier concerned, contact is then established with the supplier without delay. Where the violation of a human right or environmental obligation is confirmed, we may, if necessary, require the supplier concerned to define mitigation measures and agree deadlines for their implementation with us. If the steps taken prove to be insufficient or no action is instigated, the expert committee escalates the case to the LkSG Risk Board. If there is a risk that the supplier will not meet the requirements, the expert committee can recommend the temporary suspension of business relations. If the violation is severe or cannot be ended, then termination of the business relationship may be considered as a last resort.

Where indirect suppliers infringe the rules, we seek contact with our direct suppliers that have a business relationship with the indirect suppliers, as we ourselves do not have a contractual relationship with them. We are committed to working with all parties involved to create an approach for preventing, eliminating or minimizing human rights violations, including for indirect suppliers, and to implement this in a spirit of partnership.

T‑Mobile US expects its suppliers to monitor compliance with the Supplier Code of Conduct themselves. They are requested to use T‑Mobile US’ Integrity Line to inform them of any concerns or suspected violations of the requirements of the Supplier Code of Conduct and to remedy any violations found in a timely manner. T‑Mobile US reserves the right to audit suppliers to confirm that they comply with supplier requirements. Violations of the requirements of the Supplier Code of Conduct can jeopardize the business relationship with T‑Mobile US, up to and including termination of this relationship.

In accordance with the supplier codes, suppliers to Deutsche Telekom and T‑Mobile US are expected to provide their employees with effective procedures and a safe environment for any complaints and feedback in an appropriate manner. We expect our suppliers to regularly inform their employees about the grievance mechanisms, train them how to use them, and regularly review the reporting procedures. The grievance mechanisms must be accessible and include an option to report anonymously where reasonable or possible. Workers and/or their representatives must be able to openly communicate and share ideas and concerns with management regarding working conditions and management practices without fear of discrimination or retaliation.

We outline our policy for protecting individuals against retaliation in the section “ESRS G1‑1.”

Furthermore, our suppliers are required to inform their workers about how to use Deutsche Telekom’s TellMe whistleblower portal or T‑Mobile US’s Integrity Line, both of which are publicly available. If a supplier does not have its own complaints mechanism, it is sufficient to notify employees of the existence of TellMe or Integrity Line.

The contracts entered into with our suppliers and the supplier codes of conduct make explicit reference to TellMe and Integrity Line and provide a link to these channels, which means that through the supplier codes of conduct our suppliers are aware of and have access to the relevant grievance mechanism.

For further information on how the availability of the channels is supported, please refer to the sections “ESRS S1‑3” and “ESRS G1‑1.”

Deutsche Telekom (excluding T‑Mobile US) also receives information about potential grievances in the upstream value chain through the audits described in the section “ESRS S2‑2” as part of the multi-sector JAC initiative or through reports in the media.

No specific severe human rights incidents connected to workers in the upstream value chain (e.g., forced labor, human trafficking, or child labor) were reported through the aforementioned channels in the reporting year.

We describe how the grievances raised are tracked and monitored in the section “ESRS G1‑3.” We provide information on the effectiveness of our grievance mechanism related to reports from workers in the upstream value chain in the section “ESRS S1‑3.”

ESRS S2‑4 – Taking action on material impacts on value chain workers, and approaches to managing material risks and pursuing material opportunities related to value chain workers, and effectiveness of those actions

As part of the LkSG management system, we conduct regular risk analyses for the own business operations of the consolidated Group companies (Deutsche Telekom excluding T‑Mobile US) and their direct suppliers. We also perform ad hoc risk analyses of suppliers about whom we have substantiated knowledge of misconduct, as described above.

The LkSG risk analyses include information from internal and external sources. These include publicly available reports on country and industry risks, information from our existing management processes, grievance mechanisms, employee surveys, or audits. In addition, we make use of the knowledge of internal and external human rights experts. The information is checked for plausibility and prioritized. Thus, we have been preparing an annual risk matrix for our own business areas and for suppliers. The results of the risk analyses are acknowledged by the Board of Management. They form the basis for deriving further actions. When deriving actions for suppliers, we take into account three industry risks in addition to the prioritized objects of protection under the LkSG: “manufacture of electronic devices and network infrastructure, plus their components” (direct and indirect suppliers) as well as “extraction of raw materials” and “civil engineering” (indirect suppliers).

In the case of selected high-risk, strategically relevant suppliers, we perform additional supplier assessments over and above this risk analysis. We use a platform developed by an external supplier throughout the Group for this purpose. This platform enables us to assess the environmental, social and governance practices of companies.

As a U.S.-listed company, T‑Mobile US conducts enterprise-wide risk assessments according to its own methodology that consider a range of factors, including, supply chain, operations and social risks that impact its own workforce. The results are regularly reported to the relevant governing bodies, which include representatives of Deutsche Telekom AG. Additionally, before T‑Mobile US selects suppliers, it utilizes a centralized third-party risk management process to screen potential suppliers for anti-corruption, global sanctions, human rights violations, as well as financial, security, and environmental risks, among other things. T‑Mobile US also continuously subjects its suppliers to supplier risk assessments adapted to their risk profile and reserves the right to audit suppliers to confirm compliance with its Supplier Code of Conduct.

In the reporting year, Deutsche Telekom (excluding T‑Mobile US) took fundamental prevention and mitigation measures aimed at addressing the risks identified and prioritized in our recurring LkSG risk analysis and therefore our potentially negative impact on workers in our upstream value chain. In the case of relevant risk factors, we contacted the particularly at-risk direct suppliers in the reporting year to inform them about our human rights and environment-related expectations. This serves to raise awareness and may prevent risks and human rights violations.

In addition, we focused in particular on areas that we can influence or that are directly related to our core business, such as manufacturing products for our own brands, e.g., T Phone and T Tablet. To reduce the risk of raw materials from conflict and high-risk regions being used, we analyze these products once a year, for example, to determine whether they contain raw materials from conflict regions and the proportion of raw materials from certified smelters. The intention here is to prevent or mitigate adverse impacts on the working conditions and other work-related rights of workers in the extraction of raw materials and at the production facilities of direct suppliers. Regardless of whether they are our own or third-party brand products, our technical requirements for mobile devices stipulate that conflict minerals must not be used. If this is not possible for technical reasons, we require our suppliers to make the mineral supply chain transparent by using the Conflict Minerals Reporting Template (CMRT) developed by the Responsible Minerals Initiative (RMI). We also expect them to furnish on request all supporting documents evidencing due diligence actions on their part.

As part of our regular quality audits at production facilities, we have also been assessing LkSG-related aspects since early 2025. Any identified violations of the LkSG are included in the audit report and eliminated through corrective action, similar to quality deficiencies. The objective is to reinforce quality assurance at suppliers and effectively minimize work-related health and safety risks.

The annual audits conducted as part of the JAC initiative are also designed to minimize and prevent negative impacts on working conditions at the production facilities of suppliers from our industry. We also include suppliers at lower levels of the supply chain that produce or offer hardware for information and communication technology (ICT). As many of the suppliers audited have their production facilities in Asia, the audits primarily happen there.

In the reporting year, we continued to concentrate on developing and implementing specific risk mitigation measures in a JAC working group, particularly in connection with working conditions at the locations of ICT suppliers. These actions include measures such as close collaboration with suppliers and the creation of greater transparency in the ICT supply chain. Through our involvement in networks and associations, such as the UN Global Compact, econsense, and the Global enabling Sustainability Initiative (GeSI), we also want to help ensure that the ICT industry does a better job of implementing sustainability requirements in the global supply chain over the long term. That is why we exchange information on best practices and pool resources for improving labor standards as part of the initiatives.

U.S. law requires companies to conduct due diligence on the source of conflict minerals necessary to the functionality or production of products that they manufacture or contract to manufacture. The T‑Mobile US Responsible Sourcing Policy outlines that suppliers must source conflict minerals responsibly, either from recycled or scrap sources or from smelters or refiners that have completed, or have demonstrated progress toward, completing an audit by a recognized third-party verification program. Suppliers are required to conduct their own due diligence into the source and chain of custody of any conflict mineral used in products or components supplied to T‑Mobile US. They must provide full transparency of the mineral supply chain, using a verifiable traceability system such as the RMI Conflict Minerals Reporting Template (CMRT). Additionally, suppliers are expected to adopt a conflict minerals policy and supplier due diligence practices.

The actions we take in the field of civil engineering works in Germany are geared towards construction site employees and their managers in the upstream value chain and also towards our own workforce on the construction sites.

To mitigate negative impacts on workers in this connection in the fiber-optic build-out in Germany, we have defined special contractual terms for our business partners in this industry. These include, for example, the stipulation that as a rule work may not be subcontracted from subcontractor to sub-subcontractor. This clause helps to avoid complex subcontracting chains that can increase the risk of human rights violations. In addition, safety and health inspectors monitor mandatory compliance with occupational safety and environmental protection regulations during construction site inspections, using a set of guidelines that has been aligned with the LkSG requirements since 2024. Moreover, we audit civil engineering suppliers and have also been factoring the LkSG requirements into these audits since 2024.

We address our direct German-speaking civil engineering suppliers through an informational bulletin published on our website in 2024. In this we draw their attention to their obligation to contractually ensure that employment contracts are drawn up and that workers in the upstream value chain, especially migrant workers, are able to understand the text of the contract. In addition, when subcontracting, we expect compliance with fundamental labor law standards, such as fair pay, occupational safety, and decent working conditions. T‑Mobile US addresses potential negative impacts on workers in the upstream value chain through a comprehensive Vendor Safety Program. This formulates requirements for external service providers in high-risk areas such as construction and installation and has their safety practices and performance assessed by independent third parties. In this way, the company contributes to the consideration of human rights and occupational health and safety standards in the supply chain.

Deutsche Telekom (excluding T‑Mobile US) also directly addresses its own civil engineering employees and aims to raise their awareness of human rights-related risks in civil engineering, for example with a web-based training course introduced in 2024, which was again offered in the reporting year. This specifically increased our employees’ ability to identify human rights-related risks at construction site visits early on and report them over the established reporting channels.

In the reporting year, Deutsche Telekom excluding T‑Mobile US identified isolated cases of actual negative impacts on working conditions at suppliers’ production facilities and in the area of civil engineering in Germany. Specifically, we identified violations of regulations concerning the health and safety of workers and the payment of an adequate living wage. To counteract these grievances, we instigated targeted awareness-raising measures between general contractors and subcontractors, clarifying responsibilities and human rights standards. Furthermore, when suspicions are confirmed, we endeavor to seek remediation from the supplier concerned to the best of our ability and as far as the law allows.

As an overarching action in connection with our own practices, we have incorporated, e.g., the LkSG obligations into the procurement policy and the general purchasing terms and conditions for suppliers of Deutsche Telekom. The procurement policy also emphasizes the importance of sustainability in procurement. Furthermore, our procurement employees are continuously informed about the LkSG requirements through mandatory training courses so that they can comply with them. Where possible, we track the attendance rate to monitor the effectiveness of this action. We have also published a web-based training course for suppliers on Deutsche Telekom’s website.

When selecting suppliers, we attach great importance to ensuring that our suppliers are familiar with our sustainability requirements as set out in the Supplier Code of Conduct. As part of the selection process, we also review the risk status of selected suppliers, including by using external data. An excessively high risk status may result in no order being placed or no contract being entered into. In the course of tenders, we also weight sustainability criteria alongside quality and cost criteria, wherever possible. These include our suppliers’ carbon emissions and respect for human rights. This additionally creates a strong incentive for suppliers to give sustainability matters greater consideration in business activities, products and services.

We review the effectiveness of the above-mentioned actions once a year or on an ad hoc basis as part of the LkSG risk process. We do this by evaluating predefined metrics that we developed when we drafted the individual actions. The results of the effectiveness assessment of the actions are presented to the LkSG Risk Board.

It is not possible to allocate human and financial resources for the management of the described measures with any degree of accuracy due to the complexity of our activities. As a rule, all actions are implemented using the budgets of the individual units and normally do not require significant operating or capital expenditure. We provide information on the monitoring of our LkSG management system in the section “ESRS S2‑1.”

ESRS S2‑5 – Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities

We monitor the effectiveness of our policies and actions related to the improvement of working conditions, equal treatment and equal opportunities, and other work-related rights in the upstream value chain through the LkSG risk process described in this topical standard. Processes have been established to continuously monitor compliance with T‑Mobile US’s Human Rights Statement and Supplier Code of Conduct. TellMe and Integrity Line are used to record violations of supplier requirements. Over and above this, we have not defined any specific time-bound or outcome-based targets that apply to the entire Group.