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2022 Corporate Responsibility Report

EU taxonomy: industry view and outlook

Further development
The bulk of our business model is not yet included in the EU taxonomy img, because the taxonomy does not include criteria for the economic activity “Provision and operation of a network infrastructure for telecommunications.” We can therefore only reflect the added value of our activities for digitalization and the associated environmental benefits within the EU taxonomy to a very limited extent. We firmly believe that the IT solutions and products running on our network can help both businesses and private individuals to reduce their carbon emissions. For this reason, as the taxonomy is revised and updated, it should take into account the importance of telecommunications networks. We are therefore active in a range of business and industry associations assessing whether our core activities could be reflected by suitable criteria in the EU taxonomy. These associations include the Sustainable Finance working group in the European Telecommunications Network Operators’ Association (ETNO), and, until 2022, 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 img dialogs. We have set out our position in a range of position papers, for example, here with ETNO.

The European Commission is currently drawing up criteria for the four environmental objectives that do not yet have any. These 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.” The criteria will be based on the recommendations submitted to the European Commission by the Platform on Sustainable Finance in March and October 2022. For Deutsche Telekom, the proposal by experts to include IT solutions in the EU taxonomy that contribute to the circular economy or to the protection of water resources is key. As soon as the European Commission publishes the draft criteria, we will check how these can be applied in the information and communications sector, and will contribute our assessment to the planned consultation phase.

In its current form, the EU taxonomy concentrates on environmental objectives. It is to be expanded in the future with the inclusion of a “social taxonomy.” The aim of this is to give businesses the opportunity to reflect their social contributions, too. Given the demanding regulatory environment currently facing businesses, these plans have been temporarily suspended. However, in October 2022, the Platform on Sustainable Finance expert committee took the initial step of compiling a proposal for fleshing out the minimum social standards that are already part of the EU taxonomy. The experts suggest focusing on the following areas: respect for human rights and labor law; anti-corruption; tax; and fair competition. It is not yet clear to what extent the European Commission will make these expert recommendations legally binding.

The application of the Corporate Sustainability Reporting Directive, which entered into force on January 5, 2023, will progressively increase the number of businesses that are obligated to publish taxonomy-related information. Going forward, this will help us to check the taxonomy alignment of goods and services we purchase, as required by the EU taxonomy.

Silke Thomas

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Silke Thomas