Sustainable finance

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Socially responsible investment

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

With our Socially Responsible Investment (SRI) ESG KPI, 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 img, we have introduced a process for assessing the impacts of projects, products, and measures.

The SFDR (Sustainable Finance Disclosure Regulation) is also relevant for Deutsche Telekom. It applies primarily to financial institutions that should incorporate sustainability factors into their decision-making processes concerning investments and have to collect relevant data regarding the sustainability impacts of their investments. Enterprises outside the financial sector are also affected and for that reason we have set out in tabular format for our investors and financial service providers the Principal Adverse Impacts (PAIs) of their investment decisions or guidelines in terms of sustainability aspects.

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T-Shares in sustainability ratings and indexes KPI

As part of our CR strategy, we have taken part successfully for many years in ESG img 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 img is included in the financial market's sustainability indexes.

In 2023, the T-Share was again listed on leading sustainability indexes, including S&P Global’s prominent, and CSA-based, DJSI img World and DJSI Europe. Our shares were also listed yet again on the FTSE4Good Index img Series (for the twelfth year running) and the STOXX Global ESG Leaders. We are also still listed on the Euronext Indexes.

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

Rating
agency
Indexes/ratings/
ranking
Successfully listed in index
2019 2020 2021 2022 2023
Listed
Not listed
a Listed in other indexes in the relevant universe.
b Index was discontinued in the reporting year.
Data checked by Deloitte.
S&P CSA DJSI World
DJSI Europe
S&P ESG Index Series
CDP STOXX Global Climate Change Leaders
Supplier Engagement A-List
MSCI ESG Universal Indexes
ISS-ESG Prime Status (Sector Leader)
Bloomberg Gender Equality Index
Sustainalytics STOXX Global ESG Leadersa
UN Global Compact 100b n.a.
FTSE Financial Times
Stock Exchange
FTSE4Good
Moody's Euronext indexes based on Moody’s ESG data
 

 

 

Task Force on Climate-related Financial Disclosures (TCFD)

  • The most important key figures for measuring and managing climate-related opportunities and risks
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ESG KPI “Socially Responsible Investment (SRI)” KPI

More and more investors take into account sustainability aspects of their investments (Socially Responsible Investments, SRI img). SRI investment products consist of securities from companies that have passed an audit img based on environmental, social, and governance (ESG img) criteria. The development of demand from socially responsible investors for T-Shares img serves as an indicator we can use to assess our sustainability performance. The ESG KPI “Socially Responsible Investment” indicates the proportion of shares in Deutsche Telekom held by these kinds of investors.

Our commitment to greater sustainability pays off: As of December 31, 2023, around 32 percent of all T-Shares were held by investors who take environmental, social, and corporate governance criteria into account for their investment strategy; the same figure was just 31.3 percent in the previous year. (Source: Nasdaq)

Our ambition in this connection: Increase the KPI

 

Task Force on Climate-related Financial Disclosures (TCFD)

  • The most important key figures for measuring and managing climate-related opportunities and risks 
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Sustainable capital investments & bond issues

Our contribution to the SDGs

In the past years, sustainability criteria have become increasingly important, both politically and economically, with respect to capital investments. And we are among those seeking to make our capital investments increasingly sustainability-oriented. This applies both to money that we invest and to bonds img that we issue for the purpose of raising borrowed capital for investments. To this end, we regularly evaluate financing models that are attractive and sustainable, working in close consultation with our Group units Corporate Responsibility and Treasury (financial management).

Sustainable capital investment
Since 2019, Deutsche Telekom’s capital investments (“DT Trust”) have been geared toward ecological and social standards. The DT Trust is based on the criteria for the Government Pension Fund img Norway (“Norges”). Among other things, we exclude companies that violate human rights, manufacture certain weapons, or whose core business is considered harmful to the environment.

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EU taxonomy: compliance

The EU Taxonomy img Regulation is the outcome of a European regulatory initiative. The goal of the Regulation is to promote investment in companies that are managed responsibly and that are involved in sustainable economic activities. The EU Taxonomy aims to create a uniform understanding of which activities and investments are sustainable. For this, the European Commission has defined clear criteria with precise metrics. This is intended to help investors to assess whether a company in which they want to invest operates sustainably. Since 2021, the businesses affected have had an obligation to report on how much of their turnover comes from the economic activities covered by the EU Taxonomy. In addition, companies must disclose the extent to which they invest in these economic activities, and what level of operating expenditure is associated with these activities.

Six environmental objectives 
The first criteria regarding which economic activities are to be classed as environmentally sustainable in accordance with the EU Taxonomy were adopted by the European Commission in 2022. They apply to the taxonomy environmental objectives “Climate change mitigation” (CCM) and “Climate change adaptation” (CCA). There are also additional taxonomy environmental objectives in the areas of “Water and marine resources” (WTR), “Circular economy” (CE), “Pollution prevention and control” (PPC), and “Biodiversity and ecosystems” (BIO). The European Commission adopted criteria for these objectives in June 2023, which were required to be applied for the first time for the 2023 reporting year.

The EU Taxonomy distinguishes between economic activities that are “taxonomy-eligible” and “taxonomy-aligned”:

  • “Taxonomy-eligible” economic activities are those activities for which concrete sustainability criteria are listed in the EU Taxonomy [Annexes to EU Delegated Regulations (EU) 2021/2139, (EU) 2022/1214, (EU) 2023/2485, and (EU) 2023/2486]. 
  • “Taxonomy-aligned” economic activities are those activities that are fully compliant with the sustainability criteria listed in the EU Taxonomy [Annexes to EU Delegated Regulations (EU) 2021/2139, (EU) 2022/1214, (EU) 2023/2485, and (EU) 2023/2486]. To be taxonomy-aligned, an economic activity must make a substantial contribution to one of the aforementioned six environmental objectives while at the same time doing no significant harm (DNSH) to any of the other objectives. In addition, the company must meet the minimum social standards defined in the Taxonomy Regulation. The diagram below provides a summary of the taxonomy requirements:

Requirements of the EU taxonomy = Taxonomy-eligible economic activities

Taxonomy-aligned economic activities

Substantial contribution
Do no
significant harm
Compliance with
minimum safeguards

Substantial contribution
to at least one of the six environmental objectives of the EU Taxonomy:

  1. Climate change mitigation (CCM)
  2. Climate change adaptation (CCA)
  3. The sustainable use and protection of water and marine resources (WTR)
  4. The transition to a circular economy (CE)
  5. Pollution prevention and control (PPC)
  6. Biodiversity and ecosystems (BIO)

Do no significant harm
An activity can only be considered to contribute to one of the six objectives if it has no other significant negative environmental impact (“Do no significant harm” principle).

Compliance with minimum safeguards
The minimum safeguards are social requirements in accordance with

  • the OECD img Guidelines for Multinational Enterprises,
  • the UN Guiding Principles on Business and Human Rights,
  • the Core Labour Standards of the International Labour Organization (ILO img),
  • and the International Bill of Human Rights.
For more information please click on the buttons

Implementation at Deutsche Telekom 
The following economic activities of Deutsche Telekom are currently taxonomy-eligible [the activity numbers refer to Annexe I of Delegated Regulation (EU) 2021/2139, which describes the criteria for the “Climate change mitigation (CCM)” environmental objective, as well as to Annexe II of Delegated Regulation (EU) 2023/2486, which lists the criteria for the “Circular economy (CE)” environmental objective]:

In the reporting year, we made minor changes to the application of materiality thresholds compared with the prior year. That is why we no longer report the activity “Infrastructure enabling low-carbon road transport and public transport “(CCM 6.15), which relates to the charging solutions of our Comfort Charge subsidiary for electric vehicles. A complete overview of the economic activities that are currently part of the EU Taxonomy is available using the EU Taxonomy Compass.

With the exception of the activity “Product-as-a-service and other circular use and result-oriented service models (CE 5.5),” a comprehensive review was conducted for all of Deutsche Telekom’s taxonomy-eligible activities to determine whether they can also be classified as taxonomy-aligned. We conducted an initial analysis of taxonomy eligibility for activity CE 5.5. We will continue to deepen this analysis and publish the results – as required by law – in 2025 for the 2024 reporting year. 

A taxonomy criterion that applies to all activities is the climate risk analysis, which was performed at Group level. In connection with the taxonomy-eligible activities, we have identified individual local climate risks, although these are mitigated by existing adaptation measures. The criteria for doing no harm to environmental objective “Climate change adaptation” (CCA) are therefore met. The only exception to this is the United States operating segment, where management of climate risks is still in the process of being developed and therefore does not yet fully meet the requirements of the EU Taxonomy. In any case, there were no taxonomy-eligible activities carried out to any significant extent in the United States operating segment in the reporting year. 

We ensure compliance with minimum social standards for all taxonomy-eligible activities through a Group-wide management system. The standards refer to the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the ILO Core Conventions and the International Bill of Human Rights. We perform our human-rights-related due diligence obligations using a risk-based management system encompassing both the Group and our supply chain. We also maintain a process of trust-based dialog with employees’ representatives and trade unions.

You will find comprehensive information on checking for taxonomy alignment in the relevant sections of the CR Report and the non-financial statement in our Annual Report

The following table provides an overview of our taxonomy-eligible and taxonomy-aligned economic activities for the reporting year. It breaks the figures down into both absolute values and the applicable percentage of Group turnover, capital expenditure, and operating expenditure.

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

Deutsche Telekom Group in 2023
  Turnover Capital expenditure Operating expenditure
  millions of € % (2023) % (2022) millions of € % (2023) % (2022) millions of € % (2023) % (2022)
Relevant total figures for the Group 111 970 100.0 100.0 24 290 100.0 100.0 413 100.0 100.0
Of which: taxonomy-eligible 2 770 2.5 1.8 517 2.1 0.8 137 33.2 33.5
  Of which: taxonomy-aligned activites 257 0.2 0.5 0 0.0 0.0 2 0.5 0.4
  CCM 8.2 Data-driven solutions for GHG emissions reductions 257 0.2 0.5 0 0.0 0.0 2 0.5 0.4
  Of which: non-taxonomy-aligned activities 2 513 2.2 1.3 517 2.1 0.8 135 32.7 33.1
  CCM 8.1 Data processing and hosting 1 148 1.0 1.0 213 0.9 0.4 79 19.1 19.0
  CCM 8.2 Data-driven solutions for GHG emissions reductions 719 0.6 0.3 2 0.0 0.0 56 13.6 14.1
  CE 5.5 Product-as-a-service and other circular use- and result-oriented service models* 645 0.6 - 170 0.7 - 0 0.0 -
  CCM 6.5 Transport by motorbikes, passenger cars, and light commercial vehicles  0 0.0 0.0 133 0.5 0.3 0 0.0 0.0
  CCM 6.15 Infrastructure enabling low carbon road transport and public transport** - - 0.0 - - 0.0 - - 0.0
Of which: non-taxonomy-eligible activities 109 200 97.5 98.2 23 773 97.9 99.2 276 66.8 66.5
* The analysis of the economic activity “Product-as-a-service and other circular use- and result-oriented service models” (CE 5.5) was limited to taxonomy eligibility only in 2023. The analysis of taxonomy alignment pursuant to Delegated Regulation (EU) 2023/2486 will take place in the 2024 financial year.
** Due to a change in application of the materiality assessment, turnover in connection with the taxonomy-eligible economic activity “Infrastructure enabling low-carbon road transport and public transport” (CCM 6.15) is no longer being reported in the 2023 financial year.


The total figures of the Group underlying the calculation in accordance with the EU Taxonomy for the reporting year were EUR 112.0 billion (2022: EUR 114.2 billion) for turnover, EUR 24.3 billion (2022: EUR 38.5 billion) for capital expenditure, and EUR 0.4 billion (2022: EUR 0.4 billion) for operating expenditure. Turnover and capital expenditure were determined on the basis of the consolidated financial statements. Operating expenditure relevant to the EU Taxonomy represents only a small proportion of total operating expenditure. This includes 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. You will find more information on the reporting principles and KPIs for the EU Taxonomy in the non-financial statement in our Annual Report.

As Deutsche Telekom’s core business is not yet adequately covered by the criteria in the EU Taxonomy, an aggregate view of the taxonomy eligibility of all economic activities results again in 2023 in very low proportions of taxonomy-eligible turnover (2.5 percent; 2022: 1.8 percent), capital expenditure (2.1 percent; 2022: 0.8 percent), and operating expenditure (33.2 percent; 2022: 33.5 percent) for the Deutsche Telekom Group. The slight increase in turnover and capital expenditure compared with the prior year is mainly attributable to the first-time disclosure of taxonomy-eligible turnover and capital expenditure from the lease of terminal equipment in accordance with economic activity CE 5.5.

In the 2023 financial year, the taxonomy-aligned proportion of all economic activities of the Deutsche Telekom Group was 0.2 percent (2022: 0.5 percent) of turnover, 0.0 percent (2022: 0.0 percent) of capital expenditure, and 0.5 percent (2022: 0.4 percent) of operating expenditure. The taxonomy-aligned proportion is attributable to economic activity CCM 8.2 “Data-driven solutions for GHG emissions reductions.” The decline in taxonomy-aligned turnover is due mainly to the life-cycle analysis required by the Taxonomy. The industry benchmarks against which the greenhouse gas savings of our cloud solutions are compared were updated for this analysis in the reporting year. 

In relation to the Systems Solutions segment, the taxonomy-aligned proportion of turnover is 3.6 percent (2022: 12.3 percent), 0.0 percent for capital expenditure (2022: 0.1 percent), and 0.0 percent for operating expenditure (2022: 0.8 percent). 

You will find more information in the sections on taxonomy activities CCM 8.1, CCM 8.2, and CE 5.5.

 

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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 are helping to reduce carbon emissions by increasing the energy efficiency of our network infrastructure and investing in the build-out of state-of-the-art, energy-efficient networks. At the same time, the network infrastructure forms the basis needed for digital solutions that contribute to CO2 savings in other sectors of the economy. For this reason, we are actively involved in various business and industry associations to ensure that relevant and appropriate criteria for our network infrastructure are added to the EU Taxonomy. We have set out our position in a range of position papers, for example, here with ETNO.

In particular, we took part in the joint feedback process of the European Commission and the Platform on Sustainable Finance on the EU Taxonomy in 2023. The Sustainable Finance working group of the European Telecommunications Network Operators' Association (ETNO) and the Global System for Mobile Communications Association (GSMA) has developed a proposal for taxonomy criteria at Deutsche Telekom’s initiative. These criteria can provide stronger incentives for investments in climate change mitigation in the area of network build-out and operation for fixed and mobile networks. This industry proposal will be evaluated by the Platform on Sustainable Finance and the European Commission in the course of 2024. 

In addition to EGNO and GSMA, we are 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.

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 and labor rights, anti-corruption, taxes, 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 disclose 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.

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Taxonomy activity 8.1: Data processing, hosting and related activities

We cover the taxonomy-eligible economic activity “Data processing, hosting and related activities” (CCM 8.1) with our Systems Solutions segment. As well as data centers operated by T‑Systems, we also included data centers operated on co-locations in the evaluation of taxonomy eligibility. 

The economic activity CCM 8.1 accounts for the largest proportion of taxonomy-eligible turnover, investment expenditure, and operating expenditure: Taxonomy-eligible business activities for data processing and hosting amounted to 1.0 percent of turnover in 2023 (2022: 1.0 percent), 0.9 percent of capital expenditure (2022: 0.4 percent), and 19.1 percent (2022: 19.0 percent) of direct expenses (based on the relevant Group total figures). To illustrate taxonomy eligibility at segment level, too, we also report supplementary KPIs for the Systems Solutions segment. The taxonomy-eligible proportion is 35.0 percent (2022: 36 percent) in relation to the external turnover of the segment, and 66.0 percent (2022: 62.6 percent) in relation to capital expenditure.

Data centers must comply with the European Code of Conduct for Energy Efficiency in Data Centres to be considered as making a substantial contribution to climate change mitigation in accordance with the EU Taxonomy img. Five of the eight sites operated directly by T‑Systems currently comply with this Code of Conduct. Compliance with the Code of Conduct has not yet undergone external auditing, which is a requirement of the EU Taxonomy. We are therefore classifying the data centers used for economic activity CCM 8.1 as non-taxonomy-aligned in the reporting year. 

In addition, the EU Taxonomy stipulates that the refrigerants used in data center cooling systems may not exceed a global warming potential value of 675. This criterion is currently met by one data center that was fully refurbished in 2022. At present, the other sites still use industry-typical refrigerants that meet the criteria of the EU Regulation on fluorinated greenhouse gases. The taxonomy-aligned turnover, capital expenditure, and operating expenditure for economic activity CCM 8.1 are therefore all 0.0 percent.

We will make the change to taxonomy-aligned refrigerants as part of the regular refurbishment program for our data centers. We will carefully review the individual data centers’ compliance with the criteria for preventing significant harm to the remaining environmental objectives in each case as soon as they fulfill the aforementioned climate change mitigation requirements in full. This will enable us to continually increase the taxonomy alignment of our data centers.
 

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Taxonomy activity 8.2: Data-driven solutions for GHG emissions reductions

We associate those solutions and products that are predominantly aimed at the provision of data and analytics enabling GHG emission reductions with the economic activity Data-driven solutions for GHG emissions reductions (CCM 8.2). These are, in particular, solutions and products that we have incorporated into our Enablement Factor and Sustainable Revenue Share ESG img KPIs, and/or that have been awarded our #GreenMagenta label. We have identified the following taxonomy-eligible services within our Group-wide business activities:

  • Business-related video conferences (save travel-induced CO2 emissions)
  • Workplace and cloud solutions (increase energy efficiency by improving server utilization)
  • IoT solutions (save CO2 emissions through route optimization, for example)

We provide these services to a significant financial extent in the Germany segment img, in our major subsidiaries in the Europe segment, and in the Systems Solutions segment.
Taxonomy-eligible solutions under economic activity CCM 8.2 represent 0.8 percent (2022: 0.8 percent) of turnover.

A life-cycle analysis is required as evidence of taxonomy alignment. This must show that a solution results in substantial greenhouse gas emission reductions both over and beyond its entire life cycle in comparison with the relevant reference solution available on the market. We understand reference solutions to be alternative solutions that would typically be used in a company in our footprint markets. This assumes that the companies are aligned with best practices. The technical screening criteria do not stipulate a specific threshold for “substantial” reductions in greenhouse gases in comparison with the reference solution. In the prior year, we therefore defined a threshold based on scientific findings. We rate greenhouse gas reductions resulting from taxonomy-eligible solutions exceeding this threshold value as “substantial.” The requisite life-cycle analyses have been prepared for business-related video conference solutions and for the cloud solutions Future Cloud Infrastructure, Open Telekom Cloud, and SAP Cloud Services. To date, we have not prepared a life-cycle analysis for the IoT solutions and therefore we do not report them as taxonomy-aligned for the reporting year.

In contrast to the prior year, the taxonomy-eligible business-related web conferencing solutions were analyzed by comparing them with hybrid meetings to take account of market trends (previous year: in-person meetings). Significant greenhouse gas savings were demonstrated. In comparison with hybrid meetings, purely virtual meetings contribute to greenhouse gas savings of 62 percent (small meetings with fewer than five participants) or 32 percent (large meetings with more than five participants). 

Of the workplace and cloud solutions examined, the life-cycle analysis of the Future Cloud Infrastructure (including the SAP Cloud Services run on this infrastructure) shows that greenhouse gas emissions reductions of 9.7 percent (in comparison with decentralized data centers operated by our customers themselves) can be achieved. Future Cloud Infrastructure is based on an infrastructure-as-a-service model: the customer’s IT systems are brought together on a platform hosted by T-Systems. Centralizing the service in this way not only reduces the consumption of materials for hardware but, thanks to the highly energy-efficient operation of our data centers, also cuts greenhouse gas emissions. However, the demonstrated greenhouse gas reductions of 9.7 percent are lower than the threshold value defined in the prior year. This is because the industry benchmarks against which we compared our solutions were updated. Future Cloud Infrastructure and SAP Cloud Services cannot therefore be reported as taxonomy-aligned for the 2023 financial year.

The Open Telekom Cloud is also offered as an infrastructure-as-a-service model. Via a platform operated by T-Systems, businesses can flexibly purchase computing capacity, memory resources, and network resources, among other things. Improved server utilization and the highly energy-efficient operation of our data centers mean that, according to the life-cycle analysis, using the Open Telekom Cloud leads to savings in greenhouse gas emissions of 47 percent in comparison with the reference scenario. This scenario is based on the assumption that our customers use their own, decentralized server infrastructure for storing and processing data, rather than the cloud solution. In view of the demonstrated reduction in greenhouse gases, we classify all web conferencing solutions and the Open Telekom Cloud included in the life-cycle analysis as taxonomy-aligned.

For the aforementioned solutions, we exclusively use infrastructure located in Germany. The requirements for the “Circular economy” (CE) conform to current EU legislation, which we implement as part of our environment management activities at our EU sites. We also require our business partners to provide evidence that the hardware used in the data centers is actually reconditioned or recycled at the end of its service life. The taxonomy-aligned solutions for reducing greenhouse gas emissions represent 0.2 percent (2022: 0.5 percent) of turnover, 0.0 percent of capital expenditure (2022: 0.0 percent), and 0.5 percent (2022: 0.4 percent) of operating expenditure. For the Systems Solutions segment, the taxonomy-aligned proportion of turnover was 3.6 percent (2022: 12.3 percent), 0.0 percent of capital expenditure (2022: 0.1 percent), and 0.0 percent of operating expenditure (2022: 0.8 percent).

Result including cloud solutions with greenhouse gas reduction potential of around 10 percent
Taking the Future Cloud Infrastructure and SAP Cloud Services cloud solutions additionally into account, which reduced greenhouse gas emissions by 9.7 percent according to the life-cycle analysis, the taxonomy-aligned proportion for the Group would be 0.5 percent (turnover), 0.0 percent (capital expenditure), and 0.5 percent (operating expenditure). For the Systems Solutions operating segment, including Future Cloud Infrastructure and SAP Cloud Services would lead to a proportion of 11.5 percent (turnover), 0.0 percent (capital expenditure), and 0.4 percent (operating expenditure).
 

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Taxonomy activity CE 5.5: Product-as-a-service and other circular use and result-oriented service models

Following the expansion of the EU Taxonomy img in 2023, we have identified a taxonomy-eligible economic activity that is assigned to the “Circular economy” (CE) environmental objective. We record the lease of terminal equipment such as routers or fixed-network telephones to business customers and consumers in the Germany operating segment img under the taxonomy-eligible economic activity “Product-as-a-service and other circular use and result-oriented service models” (CE 5.5). We take back the leased devices from our customers and remanufacture them so that they can be used for as long as possible. We generated relevant taxonomy-eligible turnover from the lease of terminal equipment in accordance with economic activity CE 5.5 that accounted for 0.6 percent of the Group’s total turnover. This economic activity is additionally associated with relevant capital expenditure of 0.7 percent, based on the total figures for the Group. As required by law, we will publish information on taxonomy alignment for economic activity CE 5.5 for the reporting year 2024 starting in 2025.

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Additional taxonomy activities (e-mobility)

Deutsche Telekom has a vehicle fleet that includes both company cars and service vehicles. The economic activity “Transport by motorbikes, passenger cars, and light commercial vehicles” (CCM 6.5) is therefore relevant as a cross-cutting activity with a supporting function for our core business.

As we are pushing forward with the transition to a fully electric fleet, especially in Germany and the EU, some of the new vehicles purchased already meet the CO2 thresholds set by the EU Taxonomy img. We were also able to provide evidence of the alignment of these vehicles with the other key EU Taxonomy requirements, which are based on current EU legislation for new vehicles. As the choice of tires is left to the vehicle users themselves, we could not provide evidence of the taxonomy alignment of tires for the reporting year. We therefore report capital expenditure associated with our vehicle fleet as non-taxonomy-aligned.
 

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Investor communication

We have observed that investors are increasingly incorporating SRI img approaches in their investment strategies. In addition, investors, analysts, and rating agencies are increasingly inquiring more specifically about our CR activities. To meet these requests, we use different formats – both in our reporting and for direct dialog. In 2023, we held more discussions with investors on this issue than ever before, testimony to a substantial increase in interest.

We publish this CR report annually. The Management and Facts section provides readers with detailed information that helps them assess our CR performance. In addition, we have also prepared under “Specials relevant sustainability issues in a straightforward, clear manner for a broad readership. Our annual report also includes a non-financial statement that allows us to meet the current EU requirements for sustainability reporting. We also offer ESG img information for financial market players on our company website, under “Responsibility”, and on our investor relations portal, under “Socially Responsible investment”. In addition, we provide social indicators in our HR Factbook. This year we are also reporting for the first time the requirements from the SFDR as a service for our investors by providing an overview of the PAIs (Principal Adverse Impacts).

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. We also keep interested investors up-to-date on ESG issues in quarterly presentations and also answer numerous related direct inquiries. In the year under review, we again ran our investor dialogs, including our SRI roadshows, virtually entirely online.

 

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Taxes

The Group Tax department is responsible for ensuring that the Deutsche Telekom Group pays taxes at the national and international level in accordance with the applicable laws. This includes the Group’s income taxes, which must also be regularly reported in our IFRS financial statements, as well as VAT and income tax on salaries payable within the context of customer transactions and for Group employees and other taxes that are triggered for the Group.

Group Tax also ensures that the Group has an efficient tax structure within the framework of German and foreign tax laws as applicable in each country (avoidance of any unnecessary tax burden not prescribed by law). The goal is to achieve sustainable tax efficiency for the Group. In the view of Group Tax, transparent, trust-based cooperation with local tax authorities – for example, in connection with operationally advisable company reorganizations – plays an essential role in any efforts toward that goal.

In addition, Group Tax undertakes to contribute as much as possible to the success of Deutsche Telekom’s operations, e.g., by providing detailed advice regarding new business models or innovative technological developments. In such matters, it focuses particularly on directly clarifying any unresolved issues related to tax law, as well as on providing practical solutions to meeting all applicable tax requirements.

The company’s “Tax Compliance, Sustainable Tax Efficiency, Tax as Valued Business Partner” tax strategy (incl. tax policy) has been approved by the Deutsche Telekom Board of Management.

For detailed information on the work of Group Tax, its principles, and its responsible approach to taxation, please refer to the detailed document “tax strategy”.

Further information with regard to taxation of Deutsche Telekom
Additional information with regard to our taxes – for example, about our country-based reporting, and additional details about tax rates – is provided in the documents on Country-by-Country Reporting and the Cash Tax Rate Reconciliation.

In addition, Deutsche Telekom participates in initiatives aimed at developing a comprehensive approach to determining and publishing meaningful information about tax payments by enterprises and enterprise groups. The aim is to give a full and differentiated view of the various contributions to the financing of the public domain that are made in connection with or otherwise result from enterprises and entrepreneurial activities. In this context, for some years now, Deutsche Telekom has determined “Total Tax Contribution” figures for our key national companies in the telecommunications sector. This approach is explained in greater detail in the document on Total Tax Contribution, which also contains the respective information relating to our Group. Deutsche Telekom also intends to collect and publish such information in the coming years, and to potentially extend its scope to additional national companies.

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Research and development

As a future-oriented telecommunications business, we support and participate in ongoing research.

  • We collaborate, for instance, with various universities, with a view to supporting current research activities and promoting digital literacy. Here the focus is on the issues of innovation, talent acquisition, and training. In 2023, the Magenta Campus Team set out to build a network for all employees that are active in universities and who want to address young talent. The network is designed to promote ongoing knowledge sharing between the academic community – i.e., students, academic staff, and professors – and Deutsche Telekom’s innovation and technology units so they can learn from each other. We also aim to attract graduates as future Deutsche Telekom employees.
  • We are also involved in an internal research project known as Green NFT img (non-fungible token). Using a blockchain system, we are investigating to what extent Deutsche Telekom’s upstream and downstream CO2 emissions (Scope 3) can be measured reliably and tracked transparently across the suppliers’ value chain. As part of a pilot test in 2023 with one of our suppliers, this supplier manually entered into the system the emissions figures from their business activities. After a plausibility check of the data, they then received in return an NFT that contains an actual recording of all emissions figures – a sort of digital certificate. This method might allow us to trace emissions more effectively. In this pilot test the emissions are no longer recorded at company level, but assigned to the specific product orders. This way we might receive more accurate data in the future. Another advantage of the Green NFT approach would be the prompt provisioning of emissions data, which we can receive the moment an order is issued – currently data is provided with up to a year’s delay.
  • More and more people are resorting to online video streaming services which, among other things, consume large amounts of energy. Deutsche Telekom is a partner of the “Green Streaming” project funded by the Federal Ministry for Economic Affairs and Climate Action (BMWK). In May 2023 the company started looking into how this increasing media usage can be made more energy-efficient and more sustainable. As part of the project, we are analyzing all components along the streaming process chain in respect of their energy efficiency. Using machine learning, a digital twin of the process chain is being developed. It helps define the optimum system parameters for more energy-efficient operation and environmentally friendlier use of streaming content. The relevance of the research project was confirmed in October 2023 with the Green Tech Innovation Award.

We invested a total of EUR 25 million in research and development in the Group in 2023.

For the third year in a row, Telekom Deutschland and T-Mobile US teamed up to run the T-Challenge in November 2022 – a competition aimed at start-ups, researchers, creatives, and developers. The focus was on the search for technologies for a human-centered internet (“Web3 In Telecommunication – Creating a Human-centered Internet”). The participants’ remit is to develop innovative ideas, including in the areas of sustainability as well as network and infrastructure. Here they are supported by enterprises that help them turn their ideas into reality. In May 2023, the best 20 teams selected from 282 submissions from 53 countries were invited to the prize-giving ceremony. Six selected projects received prize money of EUR 600 000 in total, along with the opportunity to have the solutions put on the market in Europe and the United States by Telekom Deutschland and T-Mobile US. The winners included the company Twinu that aims to drive forward the circular economy for cell phones with a block chain-based solution. We are currently preparing the fourth T-Challenge on the topic of “AI in Telecommunications.” Applications were accepted from November 2023 through January 2024.

We also promote young, innovative business ideas in our technology incubator hubraum and allow start-ups to benefit from our experience, and provide financial assistance and access to exclusive technologies. We bring young participating companies together with relevant business units within the Group, for the purpose of testing innovative technologies and new business models and bringing them to the market. In 2023, hubraum collaborated with about 50 start-ups.

Startupnight is one of the largest annual events in Europe at which start-ups can network and present their ideas and business models to companies, investors, and potential customers. As an initiative of Deutsche Telekom, it is promoted primarily by our technology incubator. hubraum also offers a periodic event series: In the “meetups”, we meet every month with industry experts, start-ups, and investors to talk about an innovative, technology-related topic. In the framework of our TechBoost program, we support start-ups (especially in connection with financing issues), offer expert knowledge, and provide access to our technical resources and customers. Click here to find out more about current hubraum projects.

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Economy

  • Highlights

    At Deutsche Telekom, everything starts with

    the network. Having access to state-of-the-art

    technologies is a precondition for economic

    performance and participation in a

    knowledge and information society.

    At Deutsche Telekom, everything starts with the network. Having access to state-of-the-art technologies is a precondition for economic performance and participation in a knowledge and information society.

    That is why we are continuing to rapidly expand our infrastructure and improve transmission speeds with new, secure technology. We invested more than EUR 16 billion Group-wide in 2023, primarily in setting up and operating networks. This is in addition to the investments that we make in acquiring mobile spectrum.

    At Deutsche Telekom we put people front and center, especially our customers and our employees. Worldwide, Deutsche Telekom employees ensure that our networks run smoothly and our customers receive the best service. In this way, we made it into the top 10 of the world’s most valuable brands in 2023. When it comes to telecommunications companies, we occupy the number 1 spot worldwide, remaining Europe’s most valuable corporate brand.

    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 2023, the T-Share was once again listed in indices such as the renowned CSA-based DJSI World and DJSI Europe.

    Further detailed examples of the progress we made in 2023 can be found in the subchapters – from the Group’s perspective and from that of our segments.

    Highlight numbers

    Highlight numbers

    Progress of selected KPIs in  2023

    • 2022 2023

    • Investments in building and operating networks Group-wide 21bn. 16bn.

    • Customer satisfaction TRI*M 75.0 points 76.2 points

    • Sustainable revenue share 42% 43%

    • Proportion of T-Shares held by investors with ESG criteria 31.3% 32%

    • Procurement volume verified as non-critical 64.1% 66.2%

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