For us, comprehensive risk and opportunity management also means considering the opportunities and risks arising from ecological or social aspects, or from the management of our company (environment, social and governance – ESG 
). We actively and systematically involve relevant stakeholders in order to identify which current and potential ESG risks and opportunities are important for Deutsche Telekom. We also participate in a number of working groups and committees. We continuously track ESG issues and systematically ascertain our stakeholders’ positions on these matters.
Important tools we use for this purpose are:
), Federation of German Industries, Bitkom, econsense, and the German National Association of Senior Citizen's Organizations, for example).In our annual report, we also provide information about the following issues, which we have identified as key aspects of our risk-and-opportunity management process:
The risks determined by the annual risk assessment pursuant to the German LkSG and the annual LkSG report can be viewed here.
Emerging risks are difficult to predict, because their future development is extremely uncertain. They involve events that are beyond our influence and control, such as geopolitical tension, new technologies, or macroeconomic factors. These risks are either new or become significantly more significant for our company over time. Even if they already impact our business today, their impact can grow in the long term (three to five years) and potentially impede most of our activities to a much greater extent in the future.
We need to act early and effectively to identify and assess risks like this and protect our company and our customers from them. This could even require adjustment of our strategy and/or our business models to mitigate their impact. To enable us to respond to such risks comprehensively, our risk management system must systematically identify and assess these emerging risks, to derive mitigating measures.
We describe the emerging risks that are becoming increasingly important to us here.
Technological risk: cyber attacks
Cyber attacks are increasing rapidly. The speed of digital transformation, machine learning, and computing capacity is growing exponentially. At the same time, the attacks are becoming increasingly specific and efficient. They are overtaking security fixes, with the result that the number of vulnerabilities that could be exploited by this kind of attack at our company is increasing.
The potential impacts of this risk include:
Our corrective measures include:
We explain further measures in the “Data protection & data security” chapter.
Environmental risk: weather extremes
Advancing climate change will increase the intensity and frequency of extreme weather events. The related physical effects include warming oceans, higher heat and humidity, increased average temperatures, heavy storms (wind, lightning, hail, tornadoes, and hurricanes), and heat waves – which in turn can result in natural disasters like flooding and drought.
The potential impacts of this risk include:
, and other infrastructureThese impacts could result in longer and more frequent network outages, which in turn have the potential to lower our revenue, increase our churn rate, and damage our reputation. In addition, additional investments will be necessary to adapt our processes and make our infrastructure more robust. The costs of insurance cover for such events will likely increase steadily over time.
Our risk mitigation measures include:
Business risk: infectious diseases/pandemics
Outbreaks of disease and pandemics cannot be predicted. Nonetheless, historical data shows that regional and global pandemics have become increasingly frequent over the past decades. A new sickness or virus can spread quickly, become a pandemic, and drastically impede global economic growth. This can affect multiple industry sectors and supply chains and have significant impacts on the way we live and work.
The potential impacts of this risk include:
traffic volumes and our revenueOur corrective measures include:
Geopolitical risk: geopolitical instability
Geopolitical tensions endanger stability with respect to the global economy and the financial markets. Economic, political, and/or technological rivalries between geopolitical powers could lead to further trading barriers and thus drive deglobalization even further.
The main potential impacts of this risk include:
Our risk mitigation measures include:
Creating transparency regarding service relationships that could be critical across the entire value chain
Social risk: availability of talented job candidates
Our long-term success depends on our ability to acquire top talents, to hold on to them, and to develop them further. The worldwide skills shortage could get worse since young people are joining the workforce later on, older staff are leaving earlier, and there is a general increase in the need for experts in digitalization across all industries.
The main potential impacts of this risk include:
Our risk mitigation measures include:
Finding solutions
means finding the courage
for open dialog, even beyond
the boundaries of a company.
Let’s all dare to be
more transparent!
Finding solutions means finding the courage for open dialog, even beyond the boundaries of a company. Let’s all dare to be more transparent!
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Strategy in the topic specials
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