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Social Audits.

We continued and further expanded our social audit activities in 2011. In general, the auditors looked at areas in which Telekom generates the highest procurement volume and which involve the highest risk potential. Based on what we learned over the course of the reporting period, we decided not only to audit our direct suppliers but their suppliers as well. We were also able to further improve the efficiency of the social audit processes in the Joint Audit  Cooperation (JAC).

27 social audits in 2011.

During 2011, 15 of our suppliers and sub-suppliers were audited as part of the Joint Audit Cooperation (JAC). Telekom also commissioned external auditors to conduct twelve additional social audits. With this efficient, comprehensive audit system, we are able to create more transparency in our supply chain and minimize risks.

With this number, we were able to maintain our good supply chain results in important sustainability ratings and even mildly improve our SAM rating with 94 out of 100 points compared to the previous year (90 points). As a result, Telekom received the best rating in the supply chain management category of all the companies in the mobile communications sector in 2011.

Some of our international subsidiaries conducted audits as well. T-HT Hrvatski Telekom in Croatia audited five suppliers that carry out work on the network infrastructure in 2011.

A total of 23 audits have been conducted on behalf of T-HT Hrvatski Telekom since 2003.

CR Report from the previous year

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A social audit at Telekom comprises the following essential elements:

  • A general risk assessment of suppliers conducted by Telekom,
  • An evaluation of the supplier self-assessment conducted by Telekom
  • Personal communication with the suppliers and
  • The on-site audit.

Finally, the auditors write up an audit report including an audit rating. Instead of ending our business relationship with suppliers who violate our policies, Telekom works together with these suppliers to permanently improve conditions. We address any problems in an action plan and work together with the supplier to remedy these within a pre-defined period of time. We will continue to focus our social audit activities on Asia. We are also reviewing suppliers from other high-risk regions, such as Latin America and Eastern Europe.

Audit program for 2012.

We conducted 53 audits at Group level between early 2010 and late 2011. They were carried out by experts from Deutsche Telekom and qualified external auditing companies. In 2011 we reviewed our target of conducting a total of 200 social audits of strategically important direct suppliers in the period from 2010 to late 2012.

We decided to expand the scope of our audit candidates to cover downstream levels of the supply chain in order to create more transparency in our supply chain and to increase our knowledge of potential CR risks. That way we are focusing on areas that we feel need the most improvement. By late April 2012 we will decide which companies to audit and begin conducting audits of second and third-level suppliers via our direct suppliers. We expect to reach our target of auditing a total of 200 suppliers by late 2012 with these measures.

In addition to the social audits, our China office in Shenzhen conducts supplier performance visits at direct and indirect suppliers. Five supplier performance visits were conducted in 2011. In addition to general topics regarding improving business relationships, sustainability issues were also discussed.

In 2012 we want to make the supplier performance visits more effective and also analyze different corporate areas more systematically with the help of a specific checklist. One of the main focal points of the visits is sustainability. If potential problems are identified during the visits, they are reported to us immediately. The suppliers involved then become potential candidates for a social audit. We plan to intensify supplier performance visits and make sustainability audits a permanent element in our quality management audits of current and potential network infrastructure suppliers.

Audit collaboration in the telecommunications industry.

Our activities in 2011 as part of the Joint Audit  Cooperation (JAC) were focused on expanding the collaboration network. Experience gained in previous audits was also used to fine-tune audit parameters and revise the audit question catalog. Due to these measures only 15 audits were conducted in 2011 within the scope of the JAC instead of the 16 originally planned. The majority of these were follow-up audits to verify the corrective action taken for suppliers that had already been audited.

More members and new collaborations.
In 2011, four additional telecommunications companies joined the JAC - Belgacom, KPN, Swisscom and Vodafone. This will considerably increase the efficiency of the social audit processes.

A collaboration that extends beyond the social audits is being planned. The collaboration should make it possible to exploit synergy effects with other organizations such as the Global e-Sustainability Initiative (GeSI).

Meeting to take stock and make plans.
The Joint Audit  Cooperation (JAC) holds a meeting of its steering committee twice a year, which is attended by high-ranking representatives from JAC member companies. The first meeting in 2012 took place on January 11 in the Chinese city of Shenzhen. The agenda included taking stock and discussing the 2011 audit activities as well as selecting additional activities for 2012. Another central topic was the integration of new members as a decisive factor in being able to realize sustainability criteria throughout the supply chain. Participants also discussed making JAC membership available to non-European telecommunications companies. The next steering committee meeting is scheduled for late June 2012 in the Netherlands.

The JAC also held its International Corporate Social Responsibility Forum on January 12, 2012, in Shenzhen with the slogan, "Cooperation Beyond Competition." More than 150 representatives of suppliers, NGOs, the press and ICT companies as well as sustainability experts participated. The participants all agreed on the necessity for increasing supply chain transparency through intensified collaboration. This is essential, in particular to submit the downstream delivery levels to a comprehensive risk analysis and thus achieve adequate and prompt improvements. The JAC members assured the suppliers and sub-suppliers that they would help them implement improvements.

Find out more

As part of an industry-wide cooperation, Telekom and its competitors, Orange/France Telecom and Telecom Italia, announced a joint decision to improve the sustainability of their supply chain in Asia in December 2009. In October 2010, this decision resulted in the founding of an initiative, the Joint Audit  Cooperation (JAC).

JAC comprises a strategy that enables the three companies to audit their shared suppliers globally on the basis of standardized criteria. The collaboration partners are also striving to establish social, ethical and environmental standards amongst their suppliers. The processes used for accomplishing this goal are based on the international social and environmental standards SA 8000 and ISO 14001 . Audits are conducted by internationally recognized auditing firms.

JAC improves the efficiency of social auditing processes since only one audit needs to be conducted of shared suppliers. The three companies then provide the results to each other.

Update on the 2010/2011 CR program.
Sub-targets Status of implementation/measures
Increase the number of supplier audits conducted (risk verifications)   Implementation underway.
  • 4 audits in 2009 (target achieved)
  • 26 audits in 2010 (target achieved)
  • 27 audits in 2011 out of 80 planned (target not achieved)
  • Planned expansion of the Audit  Roadmap to include indirect suppliers in 2012 to create more transparency of CR risks in the supply chain. Identification of suitable audit candidates by end of March 2102. Target of conducting 200 audits from 2010 to late 2012 is still valid.

2010/2011 CR program

The current 2011/2012 CR program can be found in the "Strategy & management" section.


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