Our integrated climate strategy includes identifying sustainable aspects of products and services in our portfolio. We began this analysis process in collaboration with external experts in 2014. The results show that 37 percent of total revenues generated in Europe in 2014 involved products and services with sustainability benefits (click here for the analysis). Our products help improve medical care, enable people to participate in the knowledge society and conserve resources by replacing physical devices with digital solutions, to mention just a few of these benefits. We continued the project for identifying sustainability aspects in 2015. The broadband network, cloud computing and the virtual set-top box were the pilot products tested for their contribution to sustainability and the resulting business potential they hold. We identified their benefits in view of all three sustainability categories (environmental, social, and economic):
Between 2012 and 2020, our broadband networks have the potential to help reduce more than 19 million metric tons of CO2 emissions in Germany alone. Employees and students can work from home and cut out their daily trip to the office or university. The economy benefits as well. Between 2015 and 2020, the gross domestic product of Germany alone is expected to grow by 47 billion euros thanks to broadband technology. This high-speed network enables new business models and has created 162,000 jobs, generating additional tax revenues of 10.6 million euros. The use of broadband technology also has the potential to prevent 3.8 million sick days.
B2B cloud solutions
With our business-to-business (B2B) cloud solutions an SME with more than 100 employees can cut more than 21 metric tons of CO2 emissions and decrease its electricity costs by 7,000 euros annually. That means SMEs in Germany can cut back 300,000 metric tons of CO2 emissions each year between 2015 and 2020.
Virtual set-top box
Set-top boxes (STBs) add a wide range of special functions to TV sets and enable access to our Entertain offer, for example. By replacing these devices with virtual STBs, each customer can save 63 euros annually typically due to device energy consumption and rental fees. This amounts to total savings of 146 million euros for German TV users and reduced CO2 emissions of 47,000 metric tons. This virtual solution also conserves resources, potentially saving 4,200 metric tons of material.
We use the results of these analyses to advance our sustainable product portfolio. Future plans also include keeping our customers informed of these sustainability benefits, thereby sharpening our competitive edge.
Our integrated climate strategy supports Deutsche Telekom in pursuing its Group strategy to become the leading European telecommunications provider.
In 2015, we were able to make substantial improvements in the four pillars of our integrated climate strategy - CO2 emissions, renewable energy, energy efficiency and sustainable products - and measure these achievements on the basis of specific targets and indicators.
As regards the first pillar, reducing CO2 emissions, we finished the roll-out of our monitoring process in 2015, which had been launched the year before. We were also able to record Scope 3 emissions for all of our national companies in 2015 as planned. These efforts have made it possible for us to publish all of our CO2 emissions in compliance with the GHG Protocol for the first time in 2016. And we continue to work toward our climate target in 2016 in order to reduce our emissions by 20 percent by the year 2020 compared to the base year 2008 (excluding T-Mobile US).
We continue our efforts to increase our reliance on renewable energy throughout the Group. Some of our national companies are already setting a good example; Magyar Telekom in Hungary has been getting 100 percent of its electricity from renewable sources since 2015. We have also set parameters for assessing the sustainability of purchased electricity in collaboration with our colleagues responsible for procuring electricity for our offices and facilities in Europe. These parameters help us increase the transparency of our energy mix and improve it as a result.
We are always working to improve the capacity and performance of our fixed-line and mobile communications networks. Because these require the most energy throughout the Group, we continue to modernize them and enhance their energy efficiency. In 2015 we developed two new KPIs to measure our progress, one that establishes a relationship between our energy consumption and transported data volume and the other between our carbon footprint and transported data volume. We are planning to introduce these KPIs in 2016.
Our products and services help our customers reduce energy consumption or have other favorable effects in different parts of society. Our products help reduce CO2 emissions and costs significantly, for example in the areas of healthcare, business, mobility and logistics. Dynamic Workplace, for example, makes it possible for many of our business customers' employees to work from home. That means they produce less CO2 and save time usually spent commuting to work. The time they save can also improve their work-life balance and have a positive impact on employee health. We intend to integrate this potential step by step into our portfolio, thus contributing to our fourth pillar, sustainable products. Products and services that provide sustainable benefits accounted for 37 percent of total revenues in 2014. In 2014, products of Deutsche Telekom allowed greenhouse gas savings of nine million metric tons (click here for the analysis). Due to this, we were able to compensate more than our own CO2 emissions.
Indirect emissions along the value chain, or Scope 3 emissions , make up the majority of our total emissions. Recording these emissions helps us design targeted measures to reduce our carbon footprint at a corporate and product level.
We have been recording Scope 3 emissions at Deutsche Telekom in Germany since 2013. Our Scope 3 emissions for 2015 were down 1.1 percent year on year at 4,217,367 metric tons of CO2 equivalents. As in previous years, most emissions were generated through the use of end devices bought from or leased through us as well as by end devices bought from other providers to use our telecommunications services. These emissions constitute roughly two-thirds of our total Scope 3 emissions. Emissions generated by purchasing goods and services are significant as well; these make up around one-fourth of total Scope 3 emissions. Our employees commuting to work caused the highest increase in emissions; this is due to the use of an increased emission factor. With a year-on-year increase of 60 percent, these emissions currently make up 8 percent of our total Scope 3 emissions.
We fully disclose the data on the emissions generated by other national companies for the first time for 2015. Emissions sources there are similar to those identified in Germany. At national companies without any relevant fixed-line business such as those in Austria, Poland and the Netherlands, however, purchased products and services are the main source of Scope 3 emissions.
|Overview of Scope 3 emissions (t CO2e)|
|National company||2014||2015||Annual comparison|
We are planning to fully record Scope 3 emissions throughout the Group by the end of 2016.
We also keep our goal of reducing our carbon footprint in mind when planning and operating our data centers. To achieve this goal, T-Systems takes a two-step approach: It starts with optimizing energy consumption at each data center site and then continues with improving processes throughout the global data center landscape.
Between 2008 and 2013 the focus was on optimizing existing data center space. Some examples include updating the cooling systems and installing cold aisle containment to control the flow of cooling air as needed and minimize cold air waste in the IT areas. Advancements in IT technology also made it possible to considerably reduce energy consumption. In addition to these fundamental technical optimization measures, we are always fine-tuning our climate control technology; this in combination with optimum data center capacity utilization enables us to continue to improve efficiency.
The PUE factor serves as an indicator for improvements in energy efficiency. We were able to reduce the average PUE factor at the T-Systems data centers from 1.85 to 1.63 between 2008 and 2015. Despite these favorable overall results, we recorded fluctuations in the PUE factor during the reporting period compared to the previous year. This is due to the fact that, while the energy required for non-ICT components remained unchanged, computer energy consumption fluctuated in the wake of the consolidation process.
The second phase has been ongoing since 2013. This phase combines physical data center consolidation (i.e., reducing data center space and sites) with logical consolidation (i.e., virtualizing data center infrastructure). The DC11@2018 program is working to globally consolidate data center sites with the latest IT technology to a few FMO (future mode of operation) data centers. The target average PUE factor at the FMO data centers will be 1.4 once the program has been completed. This requires a homogeneous IT landscape combined with optimum capacity utilization of data center infrastructure, IT hardware and the software running on the systems. We expect these measures to bring about another massive reduction in CO2 emissions. Current program plans estimate a cumulated CO2 reduction of up to 51 percent by 2020 based on the 2012 figures.
We are increasingly using combined heat and power (CHP) plants in addition to the conventional power grid. They are an efficient, environmentally friendly way to provide power to our network nodes: CHP plants convert around 90 percent of the energy into usable energy (electricity and heat); in contrast, conventional electricity generation in the German power grid has an efficiency of only around 40 percent.
By using these plants, we can considerably reduce the CO2 emissions caused by network operation. Power & Air Solutions was operating its own CHP plants at a total of 27 network nodes in February 2016. These units generate around 7.9 GWh of electricity each year. Due to the high efficiency of these units, they generated 2,700 metric tons less CO2 than energy taken from public power grids.
More units planned
We commissioned two additional CHP units to be installed in Berlin and Frankfurt am Main in 2015. We also looked into how to increase the efficiency of our current CHP plants. Based on the findings of our analysis, we designed a new energy concept for one of our sites in Berlin. The concept should be in place by the end of 2016.
CHP units basically cover the electricity and heating needs of our network nodes via thermal energy. To tone down excessive electricity needs (peak loads) during times of exceedingly high data traffic volumes, we have improved load distribution by introducing a new control approach.
Our facility energy management measures all work toward the same goal: reducing our energy requirements to help us reach our climate target.
Smart grid solutions have the potential to optimize the energy requirements of buildings, reducing costs as well as CO2 emissions. We developed an innovative energy concept based on this technology for one of our sites in Berlin in 2015. The concept revolves around a micro smart grid.
We are planning to use two CHP plants with high thermal energy storage capacity, which are scheduled to be installed by the end of 2016. The waste heat produced by the CHP plants will be used to heat a neighboring school and gym. We expect the new system to not only cut back on costs but also reduce CO2 emissions by up to 800 metric tons a year.
We achieved our goal of reducing the average CO2 emissions generated by all newly procured cars (company cars and service vehicles) to 110 g CO2/km by the end of 2015. These results come in below the EU requirements of 120 g CO2/km. Due to the lack of established alternative methods, we had to refer to the manufacturer standard CO2 values in our calculations. We are aware that this method has been widely criticized for some time now and are closely following public discussion of the issue.
In order to make our fleet management climate-friendly, Telekom MobilitySolutions pursues a strategy based on three pillars:
- Rightsizing: selecting appropriately sized, energy-efficient, low-emissions cars. By introducing our Green Car Policy we have also created incentives for drivers of company cars to select smaller, more efficient cars.
- Economizing: encouraging a fuel-efficient, low-emissions driving style with driver training courses
- Substituting: piloting and testing alternative mobility concepts.
We can further reduce our fleet's carbon footprint by purchasing vehicles with alternative drives and fuel systems. We have been turning to natural gas and electric vehicles for some time now to help us achieve this goal. Medium-term, we are especially planning to continue to keep tabs on developments in electric mobility and employ these effectively.
Natural gas vehicles
We feel that low-emissions natural gas drives are the right approach toward effective green mobility. This technology is an effective aid in reducing pollution and the carbon footprint, particularly when renewable resources are used, e.g., natural gas obtained from residual materials and waste. However, long-range use of natural gas vehicles is still very limited due to an insufficient number of natural gas filling stations. We find the limited offer of suitable vehicles available from manufacturers particularly restrictive. Despite this, we continue to offer natural-gas powered cars to company car users and to do so at especially favorable terms and conditions. The Green Car Policy penalty budget is partly used for this purpose.
We also encourage our commuting employees to actively protect the climate by enabling them to buy discount season tickets for local and regional public transportation.
The CO2 Emissions ESG KPI indicates the development of absolute as well as relative emissions compared to the base year 2008. The comparative value from the base year is 3,362 metric thd. tons of CO2.
We had assumed there would be a slight decline in the CO2 Emissions ESG KPI for 2015, i. e., a slight improvement. This is consistent with the actual trend, which is in particular due to the aforementioned stable development in electricity consumption and the slight fall in emissions from fuel and natural gas consumption.
The developments in power consumption are the main drivers of the trend in our CO2 emissions. We therefore expect our CO2 Emissions ESG KPI to fall slightly in 2016 and 2017. Our expectation for the Group units participating in the climate protection target (excluding T-Mobile US) is that, in 2020, CO2 emissions will lie 20 percent below the rate of the base year 2008.
For detailed comments on the figures for each national company, please refer to the interactive benchmarking tool.
We calculated our CO2 emission values based on different energy and fuel consumption data. Calculation complied with the Greenhouse Gas (GHG) Protocol and was based on emission factors set forth by the International Energy Agency (IEA) and/or the GHG Protocol calculation tools. The total value reflects direct (Scope 1) and indirect (Scope 2) emissions.
Since our CO2 emissions are largely driven by our power consumption, the resulting positive trend is similar to the development described for the Energy Consumption ESG KPI.
By measuring progress based on our CO2 Emissions ESG KPI , we report our CO2 emissions in accordance with the Greenhouse Gas Protocol together with our self-defined CO2 reduction goal, thereby complying with criterion 13 of the German Sustainability Code (Greenhouse gas emissions). By reporting this data, we fully cover the G4-EN15 (Direct GHG emissions), G4-EN16 (Energy indirect GHG emissions) and G4-EN17 (Other indirect GHG emissions) GRI indicators and partially cover the E02-01 (Scope 1-3 greenhouse gas emissions) EFFAS indicator. This data is also relevant for criteria 7 (Rules and processes), 11 and 12 (Usage of natural resources) and 13 (Greenhouse gas emissions) of the German Sustainability Code. It is also used for reporting on the Global Compact principles 7 (Precautionary approach) and 8 (Promoting environmental responsibility).