Management & facts

SRI  investment products consist of securities from companies that have passed an audit based on environmental, social, and governance (ESG ) criteria. The development of demand from socially responsible investors for T-Shares serves as an indicator we can use to assess our sustainability performance.

With our ESG KPI “Socially Responsible Investment (SRI)”, we measure how the financial markets perceive our CR activities.

The concept behind the United Nations’ Sustainable Development Goals (SDGs) continues to attract attention on the part of investors. With a view, in part, to evaluating our operations in light of the SDGs, we have introduced a process for assessing the impacts of projects, products and measures.

Do you have questions on this topic?
Ask our expert:

Claudia Kurpiers

As part of our CR strategy, we have taken part successfully for many years in ESG  ratings, which we select based on reputation, relevance, and independence. When rating agencies give high marks to our social and ecological commitment, the T-Share  is included in the financial market's sustainability indexes.

In 2021, the T-Share was again listed on leading sustainability indexes, including S&P Global’s prominent, and CSA-based, DJSI  World and DJSI Europe. Our shares were also listed yet again on the FTSE4Good Index  (for the tenth year running) and the UN Global Compact 100 Index. We are also listed on the Euronext Indices.

The table below presents a selection of other T-Share listings.

Do you have questions on this topic?
Ask our expert:

Claudia Kurpiers

The EU Taxonomy Regulation is the outcome of a significant, forward-looking European regulatory initiative. It aims to promote investment flows from the finance sector to businesses that are involved in environmentally sustainable activities. The taxonomy is intended to help the EU to implement the European Green Deal, creating a common understanding of the environmental sustainability of activities and investments. The regulation also lays down corporate reporting obligations in regard to these economic activities. For companies affected by the CSR Directive, this entails new reporting obligations for the 2021 reporting year in regard to taxonomy-relevant environmentally sustainable economic activities.

Six environmental objectives 
Criteria were set out in EU legislation in mid-2021 for the first environmental objectives of the taxonomy, “climate change mitigation” and “climate change adaptation.” The taxonomy’s other environmental objectives are “the sustainable use and protection of water and marine resources”, “the transition to a circular economy”, “pollution prevention and control”, and “the protection and restoration of biodiversity and ecosystems.”

To be covered by the taxonomy, an economic activity must contribute substantially to one of these six environmental objectives while at the same time avoiding any negative impact on other objectives (the principle of “do no significant harm” or DNSH principle). The company must also meet minimum social safeguards. The diagram below provides a summary of the taxonomy requirements:

Implementation at Deutsche Telekom 
For Deutsche Telekom, as a company in the information and telecommunications industry, the following two of the economic activities currently listed in the EU taxonomy  are relevant:

• Data processing, hosting and related activities (8.1. in Annex I + II of the Delegated Regulation (EU) 2021/2139)
• Data-driven solutions for GHG emissions reductions (8.2. in Annex I + II of the Delegated Regulation (EU) 2021/2139)

A complete overview of the economic activities that form part of the EU taxonomy to date is available in the EU Compass.

The EU taxonomy KPIs are applicable to the two environmental objectives that have been published to date: “climate change mitigation” and “climate change adaptation.” We are allocating them to the objective “climate change mitigation.”

The table below shows the taxonomy-eligibility of our economic activities for this reporting year in absolute figures and as a percentage of the Group’s total turnover, capital expenditure, and operating expenditure. 

Based on the provisions of the EU taxonomy, the total figures for the Group that are relevant for this calculation in the reporting year are EUR 108.8 billion (turnover), EUR 35.7 billion (capital expenditure), and EUR 0.5 billion (operating expenditure). The definition of turnover from the EU taxonomy is equivalent to net revenue in our Group. The relevant capital expenditures were determined on the basis of the consolidated statement of financial position and are calculated by adding together the following key line items: additions and changes in the composition of the Group under property, plant and equipment, intangible assets (excluding goodwill), and right-of-use assets. The disclosures on capital expenditure do not form part of a capital expenditure plan according to the EU taxonomy guidelines. The definition used in the EU taxonomy for calculating relevant operating expenditure encompasses costs that relate to research and development; building remediation measures; short-term leases; maintenance and repair; and any other direct expenditures relating to the day-to-day maintenance of property, plant and equipment which are presented in the consolidated income statement under other operating expenses. Since we classify our data centers as non-current assets, no direct expenses are incurred in this context. The reported disclosures on capital expenditure and operating expenditure are directly assigned at the level of product groups to either the operation of data centers in accordance with economic activity 8.1. or the provision of ICT  solutions in accordance with economic activity 8.2. 

An aggregate view of the taxonomy-eligibility of both economic activities provides very low proportions in the reporting year of turnover (1.8 %), capital expenditure (0.1 %), and operating expenditure (2.1 %).

EU taxonomy KPIs – taxonomy-eligibility of the economic activities of the Deutsche Telekom Group  

Do you have questions on this topic?
Ask our expert:

Silke Thomas

Further development
The EU taxonomy  does not currently include criteria for the economic activity “Provision and operation of a network infrastructure for telecommunications.” This means that the key part of our business model is not yet covered by the taxonomy. As a result, we cannot currently describe our core business as taxonomy-eligible. Suitable EU taxonomy criteria with which we could describe our contribution to climate protection as taxonomy-aligned do not yet exist either. We therefore lobby in a range of business and industry associations for the inclusion of suitable, relevant criteria in the EU taxonomy to describe our core activities. Among other initiatives, we have taken on leadership of the Sustainable Finance working group in the European Telecommunications Network Operators’ Association (ETNO), and we represent the ICT  industry in the EU Platform on Sustainable Finance. We are also active within the European Round Table (ERT), and at national level we are part of the econsense network and several other organizations and stakeholder dialogs related to the EU taxonomy. We have set out our position in a range of position papers, for example, here with ETNO.

The telecommunications industry is a key building block for the EU Green Deal. IT solutions and products that run on our networks help companies and private individuals to reduce their CO₂ emissions. These include, for example, web and video conferencing, and also “smart” solutions such as smart cities and smart buildings. Services such as these help achieve energy efficiency and reduce CO₂. We therefore think that, for the European Union to meet its climate and energy goals, it is essential to reflect the importance of telecommunications networks when further developing and refining the taxonomy. 

The EU taxonomy also addresses economic activities that are relevant, for example, for our fleet and building management activities, but that are not within Deutsche Telekom’s core business. These include the installation, maintenance, and repair of energy-efficient devices, of electric vehicle charging stations, of devices for measuring, regulating and controlling the overall energy efficiency of buildings, and of renewable energy technologies. Activities in these areas largely relate to our capital expenditure and our operating expenditure. It will not be possible to gauge whether the associated turnover of the providers of these services are taxonomy-aligned until early 2023, when our business partners publish reports with the relevant information. Until then, we cannot report any capital expenditure and operating expenditure relating to the procurement of products from taxonomy-aligned economic activities as being taxonomy-eligible. 

The table above shows the taxonomy-eligibility of our economic activities for this reporting year in absolute figures and as a percentage of the Group’s total turnover, capital expenditure, and operating expenditure. As of the 2022 reporting year, we will also report the amount and the proportion of our economic activities that are taxonomy-aligned. Below, we explain our approach to the two economic activities that are currently relevant to us.

Minimum social safeguards
The minimum social standards outlined above must be met for the assessment of the taxonomy-alignment of our activities that is to take place in the 2022 reporting year. As a responsible company, we have made an express commitment to upholding the UN Guiding Principles on Business and Human Rights adopted by the United Nations Human Rights Council in 2011 (Ruggie Principles). The obligation to respect human rights is anchored in our core regulations – i.e., our Guiding Principles and our Code of Human Rights & Social Principles policy statement, both of which have been approved by the Board of Management. Our regulations embody our commitment to complying with the principles laid down by the International Labour Organization (ILO ), the Organisation for Economic Co-operation and Development (OECD ), the Universal Declaration of Human Rights, and the UN Global Compact. We provide transparent reporting on this in the section “Human rights”.

Do you have questions on this topic?
Ask our expert:

Silke Thomas

The economic activity “Data processing, hosting and related activities” covers “Storage, manipulation, management, movement, control, display, switching, interchange, transmission or processing of data through data centers, including edge computing”, and pertains to group J.63.1.1. of the same name in the European registry of sectors. Of our Group-wide business activities, our Systems Solutions operating segment (T-Systems) comes under this sector. To evaluate whether activities are taxonomy-eligible, we consider T-Systems’ global business, including data centers operated by other companies in which we lease space (“third-party data centers”). Taxonomy-eligible turnover can be clearly and transparently assigned to specific data centers using a suitable ratio. To do so, we use the proportion that a data center makes up of the total number of T-Systems server IDs. Capital expenditure and operating expenditure can be calculated specifically for all data centers using the relevant IT systems. This analysis shows that a large proportion of the revenue from our Systems Solutions segment is taxonomy-eligible. To avoid double counting under the EU taxonomy , T-Systems’ cloud solutions are not compiled and reported here; they are only included under the economic activities for data-driven solutions.

Based on the relevant total figures for the Group, the taxonomy-eligibility of our business activities for data processing and hosting stands at 1.1 percent (turnover). We do not provide figures for capital expenditure and operating expenditure assigned to this economic activity here due to the lack of materiality. In order to also include a view of taxonomy-eligibility from a segment perspective, we additionally report the KPIs in respect of Systems Solutions. The taxonomy-eligible portion, determined using the same calculation logic, is 36.6 percent in relation to net revenue of the segment, and 4.2 percent in relation to capital expenditure.

Do you have questions on this topic?
Ask our expert:

Silke Thomas

We apply the definition of the economic activity “Data-driven solutions for GHG emissions reductions” to those solutions and products in the Group that are “predominantly aimed at the provision of data and analytics enabling GHG emission reductions”, which means that they have clear potential to enable users to save CO₂. In this context, we are guided by the key levers of the established ESG KPI  “Enablement Factor” and by other solutions with clear potential to enable users to save CO₂ within the ESG KPI “Sustainable Revenue Share” and the #GreenMagenta label. These include first and foremost the following services from among our Group-wide business activities: web- and video-conferencing tools, workplace and cloud solutions, and connected car. We mainly provide these services in the Germany operating segment, in our major subsidiaries in the Europe operating segment, and in the Systems Solutions operating segment. We therefore focus on the relevant companies when evaluating the taxonomy-eligibility of activities. 
To avoid double counting under the EU taxonomy , T-Systems’ cloud solutions are only reported under this economic activity, and not under data processing and hosting.

The very specific selection of economic activities for this taxonomy environmental objective means that only a small proportion of the Deutsche Telekom Group’s turnover (0.8 %) and operating expenditure (2.1 %) is taxonomy-eligible. As the capital expenditure that can be assigned to this narrowly defined economic activity has little relevance for the business model and is very small, we will forgo detailing the investments more closely here due to their lack of materiality.

Do you have questions on this topic?
Ask our expert:

Silke Thomas

We have observed that investors are increasingly incorporating SRI  approaches in their investment strategies. In addition, investors, analysts and rating agencies are increasingly inquiring about our CR activities. To meet these requests, we use different formats – both in our reporting and in direct dialogue.

We annually publish this Corporate Responsibility Report and a non-financial statement in the annual report. We also offer ESG  information for financial market players on our company website, under “Responsibility”, and on our investor relations portal, under “Socially Responsible investments”. In addition, we provide social indicators in our HR Factbook.

We strive to engage in personal dialog with investors and regularly hold national and international information events as SRI roadshows. We also regularly take part in SRI conferences or meetings, and, upon request, present our CR strategy as best practice. In addition, we provide information to interested investors in conference calls, and answer numerous direct inquiries. This year, we again carried out our investor dialogs – such as our SRI roadshows – online, due to the coronavirus pandemic.

Do you have questions on this topic?
Ask our expert:

Claudia Kurpiers