• Act responsibly. Enable sustainability.
  • 2015 Corporate Responsibility Report
2015 Corporate Responsibility Report

Sustainable procurement strategy

Content verified by PwCicon_check

Non-governmental organizations (NGOs) and the media continue to uncover violations of employee and human rights as well as environmental protection standards along the supply chain for phones, laptops and other ICT img products. As one of the largest telecommunications service providers worldwide with more than 30,000 suppliers in over 80 countries, we take this issue seriously. We use effective management tools to make sure our suppliers and manufacturers provide humane working conditions and are involved in effective environmental protection.

Goals

  • Implementing sustainable procurement strategy

Measures

  • Norms, standards and guidelines
  • Group-wide implementation by Sustainable Procurement Working Group
  • Employee training
  • Stakeholder engagement
  • Established escalation procedure for serious cases

Monitoring

  • Sustainable Procurement ESG KPI
  • Sustainability rankings
Content verified by PwCicon_check

One of Telekom's aims is to constantly improve the sustainability of its value chain. We have laid the foundation for this with our sustainable procurement strategy. We adhere to principles for socially and environmentally friendly procurement throughout the Group and manage our processes with the help of internal and external performance indicators and management tools.

Basic standards
Telekom has created social and environmental minimum standards for its corporate governance through its Guiding Principles and voluntary commitments. We also require our suppliers to comply with these standards. Our CR and anti-corruption clause, which is based on the fundamental principles set forth in the following Group Policies, is an integral component of our supplier contracts:

With our Social Charter we have made a commitment to complying with the fundamental principles and standards set forth by the International Labour Organization (ILO img) and the Organisation for Economic Co-operation and Development (OECD img) as well as with the Universal Declaration of Human Rights and the UN Global Compact img

Commitment to sustainable procurement
Our strategy for realizing sustainable procurement practices is based on our CR strategy and has been effectively incorporated into our procurement processes. The Sustainable Procurement Working Group (SPWG) is responsible for Group-wide, i.e., international, implementation of our sustainable procurement strategy. Members of the SPWG img assist our employees in all decisions regarding sustainable procurement. The heads of the CR and Procurement departments are jointly responsible for the implementation of sustainable procurement practices. They report directly to the Board of Management member for Human Resources and Finance, respectively. Our escalation process calls for decisions to be made at Board of Management level in serious cases. We have also specified sustainable procurement requirements for the BuyIn joint venture.

We have incorporated our sustainability principles into the Group's Global Procurement Policy to provide orientation for our buyers. The accompanying Procurement Practices provide specific instructions on how to conduct procurement transactions in Germany. We use an e-learning tool to train our employees. Our buyers can, for example, use the tool to learn how to implement our sustainability principles in their daily business activities.

Promoting sustainability with the Sustainable Procurement ESG KPI
We introduced the Sustainable Procurement ESG KPI to measure and manage our performance in this area. This KPI img measures the ratio between the procurement volume we receive from suppliers whose compliance with social and environmental criteria has been verified through self-assessments, E-TASC img or social audits, and our total procurement volume. We have reached and even exceeded our goal of covering 75 percent by 2015, reaching a current 78 percent for this KPI. Our goal is to reach 80 percent by 2020.

Sustainability rankings rate supply chain management activities
Every year leading rating agencies measure the sustainability performance of large enterprises. Deutsche Telekom scored 93 out of 100 points in the Supply Chain Management category of the 2015 RobecoSAM img Corporate Sustainability Assessment, making Deutsche Telekom an industry leader. 

Two awards presented in 2015 confirm our good performance in the area of sustainable supply chain management: the German CSR Award in the CSR in the Supply Chain category and the DQS Germany Excellence Award in the Responsible Sourcing category.

On November 2 and 3, 2015 Deutsche Telekom hosted the 8th CR Stakeholder Forum under the slogan "Enabling sustainability – Turning visions into reality." While the first day focused on sustainable products, the second day's main topic was sustainable supply chain management.

Former German Federal Minister of the Environment Prof. Dr. Klaus Töpfer held an inspiring opening speech in front of 120 external and internal participants. He described sustainability as extremely complex – an ongoing process. He also said that it is important to find solutions today to ensure peaceful coexistence with an estimated world population of 9 billion by the year 2050 and called for the development of ICT img solutions in the face of the challenges ahead.

The subsequent panel discussion, which Prof. Töpfer also took part in, provided key insights into CR issues – including those beyond Deutsche Telekom's borders. Axel Bachmann, head of Sustainability at Coca Cola, talked about the beverage company's CR activities. Luis Neves, Board Representative for Sustainability and Climate Protection, provided insight into the work of the Global e-Sustainability Initiative img (GeSI img), of which he is chairman. Tessa Wernink, co-founder and head of Communications at Fairphone, introduced the company's sustainable smartphone. During the discussion, a number of votes were held in which guests could participate using an app. All participants said they placed importance on transparency in the supply chain. However, the panel agreed that it was impossible to have complete control over a supply chain with more than 30,000 suppliers, making risk awareness and management all the more critical. They also agreed that transparency in the supply chain could be a competitive advantage as it promotes innovation and new business models. An interesting fact: 45 percent of the guests who took part in the voting stated that they do not consider sustainability aspects when buying a cell phone.

Transparency as the basis for more sustainability was discussed in greater depth in subsequent workshops. One of the proposals that participants came up with was to offer additional rewards for suppliers meeting compliance standards. They were also in favor of closer supplier/customer cooperation to create trust and find joint solutions together in the face of potential challenges.

The second focus of the event, sustainable products and services, is covered in the customers & products section.

Acting responsibly is part of our corporate culture. We incorporate this basic approach into various measures at our company, including continuing education. The topic of sustainability in day-to-day business was a focal point of our training activities for buyers in 2015. Around 120 employees from Germany and various national companies participated in four-day training courses where they learned about processes and tools for sustainable procurement. 287 employees also used our Sustainable Procurement e-learning tool in 2015.

On June 12 2015 the 8th DELFIN award ceremony took place as part of the 16th Sustainability Roundtable in Budapest. DELFIN is a Hungarian acronym for “Award for a Committed, Sustainable and Innovative Generation” and these awards go to suppliers offering outstanding commitment to sustainable development in four categories:

  • Support for equal opportunities and promotion of non-discrimination inside and outside the company
  • Innovation in the interests of sustainability
  • Sustainability education and awareness raising
  • Investment and development related to climate protection

This year, the jury of experts decided to recognize the efforts of organizations and businesses promoting waste management, renewable energy, environment-friendly transportation, and equal opportunities.

I'm interested in learning more about Deutsche Telekom's activities in the area of...