Management & facts

We are helping to mitigate climate change and contributing to compliance with the Paris Climate Agreement. In 2013, we adopted a Group-wide climate protection target for the first time: By 2020, we planned to reduce our own CO₂e emissions by 20 percent compared to the base year 2008 (excluding T-Mobile US). As it happened, we greatly exceeded our target by achieving a reduction of about 60 percent. Our current climate targets for the period after 2020 were approved by our Board of Management in 2019, and then made even more ambitious in March 2021:

• By the end of 2021, we aimed to source 100 percent of the electricity used by the Group from renewables (Scope 2). We have achieved this target. 
• Now, we aim to reach climate neutrality throughout the company by the end of 2025 (Scope 1 and 2). To that end, we plan to reduce CO₂ emissions by up to 95 percent, with respect to their level in 2017, and offset any remaining emissions via suitable offsetting measures. In this context, we focus on offsetting measures for the long-term capture of CO₂ from the atmosphere, for example through reforestation. In addition to switching to renewably sourced electricity, our measures toward climate neutrality will especially include implementing energy efficiency measures. In the year under review, this target was further underlined by its integration into Executive Board compensation as one of two ESG  targets.
• By consistently reducing our Scope 1 and Scope 2 emissions , over 98 percent of our carbon footprint is not generated directly by us, but in the production and use of our products. We plan to achieve a 25 percent reduction per customer in these emissions by 2030 (with respect to 2017) (Scope 3, categories: goods and services acquired, capital goods, use of sold products, rented or leased equipment). We consult closely with our suppliers in order to reduce the emissions generated during production, and to have products manufactured that are energy-efficient in their utilization phases.
• We want to reach “net zero,” with no carbon footprint left in any of the three scopes, by the end of 2040 at the latest.

Our climate targets from 2019 were developed with the method from the “Science Based Targets initiative (SBTi).” The SBTi officially confirmed in May 2019 that we are the third DAX-listed company to contribute toward implementing the Paris Climate Agreement through our climate protection targets. We have thus followed our national companies in the United States and Hungary, whose targets were already endorsed by SBTi in 2018 and at the start of 2019, respectively.

At the end of the year, our progress toward our targets was as had been forecast. The calculation of the base-year emissions took the T-Mobile US and Sprint merger into account. For that reason, they are higher than the level given in the 2019 CR Report for 2017.

Electricity from 100 percent renewable energies
For 2021, we aimed to have 100 percent of the electricity we use, Group-wide, be sourced from renewable energies (Scope 2). We achieved this target, and we plan to continue using only renewably generated electricity.

Climate neutrality by 2025 (Scope 1 and 2)
Our targets call for us to reduce our Scope 1 and Scope 2 emissions by up to 95 percent, with respect to their 2017 levels, by 2025, and to offset all remaining emissions, via suitable measures, in order to achieve climate neutrality in our operations.

In the year under review, we reduced our Scope 1 and Scope 2 emissions by 94 percent with respect to their 2017 levels.

25-percent reduction of per-customer Scope-3 emissions by 2030
Over 95 percent of our carbon footprint arises from the production and use of our products. We plan to achieve a 25 percent reduction per customer in these emissions by 2030 (versus 2017) (Scope 3; categories: goods and services purchased, capital goods, use of sold products, rented or leased equipment).

The figure for the base year 2017 was corrected in comparison with the prior-year reporting due to a different basis of calculation. The reason for this is a subsequent correction of the number of customers in the U.S. segment following the acquisition of Sprint. The customer figures excluding wholesale customers are used for the calculation. The adjustment has changed the value for 2017 and the target value for 2030.

In the year under review, we reduced our per-customer Scope 3 emissions by 4 percent with respect to their 2017 level.

Climate neutrality by no later than 2040 (Scope 1, 2 and 3)
In addition, we plan to achieve net-zero emissions, throughout all three Scopes, by no later than 2040 – and, at that point, have no carbon footprint whatsoever. In this connection, we are aiming to address all of the emissions remaining in our value chain, and to stop them from entering the atmosphere. In the year under review, our total emissions amounted to 15 023 kt CO₂e.

The “Task Force on Climate-related Financial Disclosures (TCFD )” was established at the 2015 United Nations Climate Change Conference in Paris. Its aim is to develop voluntary, consistent climate-related financial risk disclosures. In 2017, the TCFD published specific recommendations for putting these disclosures into practice, recommendations that companies can use as a guideline to inform investors, lenders, insurers, and other stakeholders about the risks climate change presents for their business model.

We welcome the aims tied to the TCFD, and we are moving forward with TCFD-based reporting relative to those aims. As is already becoming increasingly clear, the physical risks posed by climate change include extreme weather events. In addition, transitional risks, such as the trend in CO₂ prices, are increasingly affecting political debate in this context. This directly influences our operations and our stakeholders. The risks applying to the continuation of our operations are analyzed, and those risks are operationally managed by our business units. In addition, we evaluate internally how reporting on climate-related financial risks and opportunities can be aligned with the TCFD’s recommendations. Ideally, such alignment would build on existing approaches for strategy, controlling, and risk management.

In 2020, we carried out a gap analysis to determine the extent to which our measures already conform to the TCFD  recommendations (see here). In various workshops with experts from the areas of technology, procurement, strategy and risk management, we defined the main climate-related opportunities and risks and began weighting them. In the process, we considered the consequences, for our business operations, that could result from the physical impacts of progressing climate change. In addition, we analyzed the impacts resulting from political, technological, and social developments tied to the transition toward a low-carbon economy that has been initiated.

The important climate-related risks include possible network-infrastructure failures as a result of damage to secondary infrastructure (involving power failures, for example) or failures of cooling systems. Another risk consists of possible network damage or failure as a result of network-infrastructure damage due to climate events or changes in climate conditions.

The important climate-related opportunities we have identified include the increasing use of energy-efficient technologies (in network operations, for example), and growing demand for climate-friendly products and services.

In a next step, we analyzed – by way of example, to begin with – 500 of Deutsche Telekom’s locations in Germany with regard to their physical climate risks. This climate-risk analysis was carried out using the “Climate Change Edition” of the “Location Risk Intelligence” software of the reinsurance company Munich Re. The analysis covers eight indexes (see graphic). We considered the risks for the various locations in light of two climate scenarios of the Intergovernmental Panel on Climate Change (IPCC): a business-as-usual scenario (RCP 4.5), with a global temperature increase of more two degrees, and a 4-degree scenario (RCP 8.5). In addition to studying the climate scenarios, we looked at risks in various time frames: currently, for the year 2050 and for 2100.

The following graphic shows a simplified excerpt of the results: The results for the year 2050, in keeping with the 4-degree scenario:

Tropical Cyclones
Maximum intensity of cyclones with a probability of exceedance of 10% in ten years (corresponds to a return period of 100 years).

Sea Level Rise**
Hazard zones derived from statistical data on sea level rise and altitude data for the respective projection year and scenario.

Fire Weather Stress Index
The Fire Stress Index describes current meteorological fire conditions based on fire hazard models. These combine inflammation probability, speed and spread probability, and fuel availability into a combined metric. The Fire Stress Index includes information on the length of the fire season and extreme fire danger days, for example.

Precipitation Stress Index
The Precipitation Stress Index describes the current meteorological threat of heavy precipitation. The threat is derived from information about e.g. one-day heavy precipitation events and long-lasting precipitation events.

Drought Stress Index
The Drought Stress Index describes the change in water balance derived from the modelled standardised precipitation evapotranspiration index (SPEI). This multi-scale drought index is based on climatic data and is used to determine the duration, intensity and severity of drought conditions compared to normal conditions (in reference periods).

Heat Stress Index
The Heat Stress Index describes the current meteorological threat from heat. The threat is derived from information on e.g. heat waves, annual maximum temperature and tropical nights.

River Flood (undefended)
Areas at risk of extreme floods with return periods of 100 or 500 years. Does not take into account dikes.

River Flood (defended)
Areas at risk of extreme floods with return periods of 100 or 500 years. Flood protection is taken into account.

The scenario analysis shows that only minor physical risks apply for the majority of the company's locations in Germany. Nonetheless, we are prepared for the impacts of physical risks, such as changes in precipitation patterns and extreme weather variability. As shown by examples such as the storm “Friederike” in 2018, and the disastrous floods of July 2021, extreme weather events can already cause local damage to our telecommunications infrastructure. Consequently, our risk management is based on multiple pillars – we structure Deutsche Telekom’s telecommunications networks with built-in resiliency. For example, we use ring structures to ensure that failures of individual network components do not affect the services we provide for our customers. For most of our critical locations, we use uninterruptible power supply (UPS) systems incorporating batteries and mobile and stationary diesel generators. Such systems can normally provide emergency power for several hours in the event of power failures. Our crisis management also helps with rapid recovery in the event of disruptions. The risks of damage to buildings and to Deutsche Telekom's network infrastructure are covered by insurance policies. Further information is available in the chapters “Addressing climate risks” and “Risk and opportunity management”.

In 2022, we plan to continue analyzing the most important opportunities and risks presented by the above-described climate scenarios. We also plan to extend our location analysis to additional countries – and we are in discussion with other national companies to that end. 

The continuing refinement of our risk management, in keeping with the TCFD requirements, is also important from a regulatory perspective, especially in light of the new EU taxonomy guidelines. The criteria for the environmental goal “Climate change adaptation” require – as does the TCFD – companies to study physical climate risks and to be aware of the potential impacts on their business activities. With our TCFD process, therefore, we have provided a basis for defining taxonomy-compliant business activities. Currently, we are working on fulfilling the Taxonomy’s requirements for the 2022 financial year.

In the context of our integrated climate strategy, we determine climate-related risks and opportunities both for us as a company and for our stakeholders. Our Board of Management is informed quarterly about current climate risks in a Group Risk Report. Further information on risk management is provided in the “Risk and opportunity management” section of our annual report.

Physical risks
Extreme weather conditions as a consequence of climate change will have a negative impact on our business processes and will inevitably lead to incidents or even network outages. Among the effects of such breakdowns is their massive impact on the management of rescue operations, for example, sometimes even rendering such emergency efforts entirely impossible. In order to be able to react appropriately in these cases, we have defined the necessary responsibilities, processes, and measures in our internal “Group Policy on Continuity and Situation Management.” The policy also outlines how to handle emergency and crisis situations like floods.

We also take possible consequences of climate change into account when planning our future business activities. For example, our network infrastructure is set up to be better protected from storm conditions, changes in temperature, and high winds and keep mobile supply infrastructure on hand for emergencies.

Financial risks
Climate change also carries financial risks – for example, from levies on CO₂ emissions or through increases in energy costs. Our contribution to the mitigation of these risks includes measuring our own energy efficiency and developing measures for improvement. To prevent infrastructure failure due to extreme weather events, additional investment in a more robust infrastructure might be necessary.

Prevention
We also help our customers reduce their own carbon footprint, and thereby help to mitigate climate change, by providing them with innovative solutions. Examples include projects in the area of sustainable urban development and mobility, and also a real-time solution for agriculture (“Precise Positioning”). It can be used, for instance, to correct GPS  data that is often too inaccurate for agricultural purposes and transmit precise location data in real time – using 5G mobile technology. Our low-threshold, comparatively inexpensive solution helps farmers deploy their machinery with greater precision, to reduce emissions, dose fertilizer and seeds more accurately, and increase their yields. That way we can also make an indirect contribution to achieving the second sustainable development goal (SDG) of “zero hunger.”

We also help our customers deal with the adverse effects of climate change (adaptation). In the event of an imminent catastrophe, our infrastructure can be used, for example, to send alerts via early warning apps. “Climate Change Adaptation” is part of the EU Taxonomy Regulation, which we discuss here.