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  • 2017 Corporate Responsibility Report
2017 Corporate Responsibility Report

CR Controlling and impact measurement

Deutsche Telekom's CR Controlling department plays a key role in controlling our CR activities. Controlling has been supported by an IT-based data collection system for the past eight years. The system makes sure that ESG img (environmental, social and governance) data and KPIs are promptly and transparently recorded and reported. It supports standardized, mandatory processes at the Group and national level and enables Group-wide benchmarks. This IT support lets us focus on content analysis of ESG data and helps us measure early on in the process to what extent we have reached our CR targets and if we need to make changes. 

We especially use ESG data to calculate our ESG KPIs, with which we measure and control our CR performance throughout the Group. CR Controlling is also responsible for recording other performance indicators with sustainability relevance. These are published in the performance indicator section as well as in the CR report's interactive benchmarking tool.

We further defined the focus of the CR Controlling department in 2017 by refining the KPI img system for controlling based on internal and external requirements:

  • We incorporated two new ESG KPIs in 2017 for measuring our progress in creating a more sustainable supply chain: the CR-Qualified Top 200 Suppliers ESG KPI and the CDP Supply Chain Coverage ESG KPI.
  • Suppliers who fulfill our strict sustainability criteria are included in our CR-Qualified TOP 200 Suppliers list. This list contains 200 suppliers who were qualified based on our criteria. They receive preferential treatment when we award projects. The new CR-Qualified Top 200 Suppliers ESG KPI shows how many of these suppliers underwent a risk assessment in the past year.
  • The CDP Supply Chain Coverage ESG KPI measured the percentage of procurement volume from emission-intensive suppliers who took part in the CDP img Supply Chain Program in 2017. The number was 66 percent. Our goal is to cover 70 percent of our procurement volume with suppliers who take part in the CDP Supply Chain Program.
  • The ESG KPI Energy Consumption and the ESG KPI CO2 Emissions have no longer been reported since 2017. After a transition phase in 2016, these were entirely replaced by the Energy Intensity ESG KPI and the Carbon Intensity ESG KPI.
  • We also adopted the Social Innovation ESG KPI in 2017. We use this KPI to record the number of downloads of our mobile app "Sea Hero Quest", which was developed to fight dementia. We now thus have another indicator for measuring ICT's contribution to solving social challenges, in addition to the Enablement Factor ESG KPI.
  • We use the PUE img value, among other things, to ascertain the energy efficiency of our network infrastructure. Due to its high relevance, the PUE value is for the first time also mentioned in the Indicators section of this CR report as a KPI with a target value.

Impact measurement is another topic of focus for our CR Controlling department. Our aim is to continuously improve and quantify the contributions made by our business activities to solving social challenges. This chapter describes the current project status and results on the topics "Broadband expansion", "Media literacy" and "Contribution to human rights".

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Progress

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ESG key performance indicators

ESG img KPIs (key performance indicators) are used as management tools for our CR involvement. They enable us to improve our performance on an ongoing basis. As they are relevant to our supply chain, we also address them in our Annual Report.

We use 13 KPIs that are valid Group-wide to manage our CR performance:

All of Deutsche Telekom's national companies that participate in the CR data collection process are obligated to record our Group-wide ESG KPIs. These national companies represent 99 percent of the Group's net revenue.

ESG KPIs cover types of capital
For the purpose of integrated financial and sustainability reporting, the KPIs map the six types of capital addressed in these reports and therefore also reflect the essential aspects of the sustainable value of our company (see diagram).

Types of capital

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ESG KPI reporting in the Annual Report

Impact measurement and management

Our goal is to strengthen our foundation for conscious business decisions and continuously improve the social impact of our products, solutions and measures. That is why we illustrate the contributions made by our business activities to solving social challenges in the "impact measurement" focal point of our Controlling department. This way we also fulfill the expectations of our external stakeholders.

We evaluate various methods and select suitable approaches per topic for the impact measurement. We make sure that the selected methods and assumptions are traceable, are based on solid data and are valid for several years. The topic of impact measurement is not entirely new to us. We have been employing business impact measurement in strategic action areas since 2015. Based on the Total Impact Measurement and Management (TIMM) framework developed by PwC, we have begun to methodically document and financially assess the results of our business activities on the environment, society and the economy.

To ensure transparency and comparability of the results, we use conventional external frameworks to describe the effects of our contributions. Some examples of this are the Sustainable Development Goals (SDG) and the United Nations Universal Declaration on Human Rights, the National Action Plan on Business and Human Rights and the UK Modern Slavery Act. Furthermore, in addition to the perspective of our internal stakeholders, we also take into account the external stakeholder groups, such as the investment company RobecoSAM img, which assesses companies in issues of sustainability. We also participate in cross-sectoral committees on impact measurement, such as the econsense initiative or GSMA, which represents the mobile communications industry. In 2017 our CR managers and experts attended a workshop together with the German Institute for Development Evaluation (DEval) to discuss current scientific methods as well as approaches and focal points for Deutsche Telekom.

After we analyzed our impact in the broadband expansion and media literacy areas in 2015, we selected human rights as the next topic for a more in-depth impact measurement. We have already seen initial results during the reporting year, which we describe in the Our contribution to respect for human rights  section. These two approaches are described in more detail in the drop downs below.

In the coming years, we want to broaden our focus and, in addition to examining the social impact of our activities, also take a closer look at the positive effects of our products and services and other strategic focal points.

Impact measurement: Results of the Broadband Expansion and Media Literacy projects

In 2015 we conducted an exemplary analysis, based on strategic core topics, of the social contribution that we made with products (Broadband Expansion) and services (Media Literacy). We made sure that the underlying methodology could also be transferred to subsequent years.

Broadband expansion
Deutsche Telekom has a strong positive effect on society thanks to its broadband expansion activities and is helping achieve the UN's sustainability goals. The company's network expansion is creating new jobs, and hence new income. It is also facilitating access to digital services, such as those in the health care sector. Improved network coverage therefore especially benefits people in urban areas and smaller towns. The quantitative analysis shows that more than 50 percent of our expenditures for network expansion went to construction (civil engineering). This sector hence benefits most from our investments. The analysis also showed that for every million euros that we invest in broadband expansion, about 20 new jobs are created along the entire value chain, most of which in the German construction industry.

Media literacy
We analyzed the Teachtoday initiative in the strategic topic area of media literacy. This initiative contains an online platform as well as competitions and conferences on media use by children and teenagers. A positive social effect is also evidenced here. That is because the learning methods employed with Teachtoday appeal to multiple senses. According to PwC's results, such methods are more than twice as effective as learning methods that only appeal to one sense. In line with the TIMM framework, we also use the so-called educational function for analyzing the value contribution. The analysis shows that for every euro we invest in media literacy measures, the Social Return on Investment is more than two euros. This means that society benefits twice from our expenditures on specific media literacy measures.

Impact measurement: Our contribution to respect for human rights

Due to the ever-increasing importance of the topic among our customers and in society in general, we focused our impact measurement on human rights in 2017. We examined not only our own companies but our partners along the supply chain as well.

We began identifying the important effects of our human rights commitment during the reporting period. Some of the issues we examined were salaries and benefits, working hours regulations, continuing education as well as maintaining a high standard of health protection, diversity, integrity, compliance and environmental protection. In developing and newly industrialized countries, the focus of our activities is on improving working and living conditions, fighting discrimination and forced labor and helping promote respect for human rights.

Our commitment to human rights is not limited to our role as a responsible employer in our international subsidiaries. We also pursue a partnership-based approach to supplier management. We regularly verify the effect of our activities by means of human rights impact assessments, employee relations policy reviews and on-site inspections at our suppliers' place of business.

Everyone involved benefits from our commitment to protecting the rights of workers – even in the business respect. That's because better working conditions have a positive effect on employee satisfaction, loyalty and motivation and decrease the staff churn rate, thereby increasing productivity and improving product quality.

We will further specify the above-mentioned interdependencies in 2018. We will then integrate the results into our strategic orientation, including suitable metrics and reports, if possible.

The following diagram illustrates our approach:

Human rights impact