Article
Physical Climate Risk Assessment and Adaption
Physical risks
Extreme weather conditions as a consequence of climate change will have a negative impact on our business processes and networks, leading to incidents or even network outages. Potential failure of network infrastructure may arise due to damaged secondary infrastructure (power outages, e.g.) or failed cooling equipment. Another risk is the possible damage to or failure of the network due to damage to the network infrastructure itself, which may occur as a result of extreme heat, heavy rain and inland flood.
Among the effects of breakdowns is their massive impact on the management of rescue operations, for example, sometimes even rendering such emergency efforts entirely impossible.
In contrast to the physical risks due to climate change, we identified the increasing use of energy-efficient technologies (in grid operation, e.g.) and the growing demand for climate-friendly products and services as significant climate-related opportunities. For instance, we are offering our customers more and more sustainable products and services. The basis for these is Deutsche Telekom’s “green network”, which is powered 100 percent by renewable energies. More Details
Physical risk assessment
In various workshops with experts from technology, purchasing, strategy and risk management, we defined the material climate-related risks and opportunities and carried out an initial weighting. We considered the consequences for our business activities that could result from the physical impacts of progressing climate change.
We analyzed - on an initial exemplary basis - 500 Deutsche Telekom AG sites for mobile and fixed line equally weighted in Germany with regard to the physical climate risks. These risks are the basis for adaptation plans regarding physical climate risks. The initial analysis covered about 80 % of our existing operations (based on revenue share). Such an analysis shall be extended similarly also to other countries and based on vulnerability and criticality in the future. In the future, all (100 %) new operations will undergo a risk assessment regarding physical climate risk incl. plans for adaptation to physical climate risks.
The climate risk analysis was prepared using the "Climate Change Edition" of the "Location Risk Intelligence" software from reinsurer Munich Re. The analysis comprises eight indices (see graph). We consider the risk exposure for the respective locations of fixed line and mobile technical sites (network operation, data center and office buildings) in three climate scenarios of the Intergovernmental Panel on Climate Change (IPCC): RCP 2.6 means 2°C or below 2°C; a business-as-usual scenario (RCP 4.5), in which the global temperature increase will be more than two degrees, and a four-degree scenario (RCP 8.5). In addition to the climate scenarios, we also examine the risk exposure in different time frames: current, for the year 2050, and for 2100.
The results from this assessment are used to develop a climate change adaptation plan with mitigation measures that consider context-specific factors and different assets (network operation, data center and office buildings).
Adaptation measures for physical risks
We understand physical risk adaption as anticipating the adverse effects of climate change and taking appropriate action to prevent or minimize the damage they can cause. Our action plans consider all material risks that have been identified through our climate risk assessment. By considering context factors such as characteristics of your sites (region, proximity to rivers, …), we ensure tailored made action plans instead of “one size fits all” approach.
More specifically, we have implemented the following actions:
| Measure | Description | Time horizont |
| Business continuity management | To ensure business continuity, we have defined 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 for instance floods. | Less than 5 years |
| New network infrastructure | We take possible consequences of climate change into account when planning new networks infrastructure. Our network infrastructure is set up to be better protected from storm conditions, changes in temperature, and high winds. | 5 to 10 years |
| Network modernization |
We conduct modernization measures such as |
More than 10 years |
| Infrastructure facility inspections |
We conduct regular assessments to ensure sophistication and resilience of infrastructure facilities. We conduct approximately 80 location inquiries per year. Approximately 35 queries for risk buildings in Germany (plannable, current threat situation), 25 queries for international risk buildings (plannable, current threat situation), 20 queries for national and international locations in the context of projects or customer orders (short-term, current threat situation) |
Less than 5 years
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Furthermore, in the near future we will check the approx. 20 T-Systems data centers for their "future security" (focus 2050). |
5 to 10 years |
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| Physical climate risk analysis | In the future, we enhance our physical risk assessment. We plan to extend the physical climate risk analysis to further countries and context-specific assessment of the physical impacts of climate change for each asset (network operation, data center and office buildings) | Less than 5 years |
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Further measures relevant e.g.: |
Less than 5 years |
Beyond that we ensure to mitigate our own possible impact on climate change by implementing ambitious climate strategy and measures for mitigating climate change in the first place. More Details.