STRATEGY & MANAGEMENT RISK AND OPPORTUNITY MANAGEMENT 55 RISK AND OPPORTUNITY MANAGEMENT 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. To this end, we actively and systematically involve all relevant stakeholders in the pro- cess of identifying current and potential risks and opportunities. We also participate in a number of working groups and committees. In par- allel with our ongoing monitoring of ecological, social and governance issues, we systematically determine our stakeholders' positions on these issues. The key tools we use here are: our year-round open online materiality survey for all stakeholders; our bi-monthly NGO report, which systematically analyzes press publications of the NGOs relevant for us; our involvement in working groups and committees, countless national and international business associations, and social organizations, e.g., GeSI img, BID, Bitkom, Econsense, and BAGSO; stakeholder dialog for- mats organized by us, such as this year’s ICT and Climate Stakeholder Day under the motto "The impact of ICT on climate change – curse or blessing"; and our various publications, such as the press reviews and newsletters. We have identified the following as our main sustainability management issues: REPUTATION How we deal with sustainability issues also entails both opportunities and risks for our reputation. A high level of service quality is one of the most important factors for improving customer perception. Customer satisfaction has been embedded in our Group management as a non- financial performance indicator to underline the importance of this issue. Transparency and reporting help to promote the trust of other external stakeholders in our Group. Our annual and CR reports also serve this purpose. However, issues such as business practices, data privacy and work standards in the supply chain and conduct in relation to human rights also entail reputation risks. If our brands, products or services are connected with such issues in negative media reports, this can cause substantial damage to our reputation. As part of our sustaina- bility management activities, we continuously review such potential risks and take measures to minimize them. We also ascertain how our products and services make a positive contribution to sustainability in order to enhance our reputation. CLIMATE PROTECTION We pursue an integrated climate strategy, which means focusing not only on the risks that climate change poses for us and our stakeholders, but also on the opportunities it presents. By 2030, ICT products and services will have the potential to save up to ten times as much in CO 2 emissions in other industries as the ICT sector itself generates (accord- ing to the GeSI SMARTer2030 study). This creates an opportunity to save 20 percent of global CO emissions in 2030 and to keep worldwide emissions at 2015 levels with simultaneous economic growth. The addi- 2 tional revenue potential here amounts to 6.5 trillion US dollars, 2.0 tril- lion US dollars of which is for the ICT industry alone. Further, ICT solu- tions can save a total of 4.9 trillion US dollars in costs. To give a specific example: The broadband rollout in Germany has the potential to save an aggregate amount of 19 million metric tons of CO between 2012 and 2020. What's more, the economic momentum triggered by rolling out broadband can create an aggregate number of 162,000 new jobs and increase GDP by 47 billion euros between 2015 and 2020. We are sup- porting this trend by evaluating our product portfolio to identify sustain- ability benefits. In addition, we want to continuously improve the ratio of the emissions that our products and services save to those generated by our own value chain. In 2016, for example, we saved 33 percent more emissions in Germany than we produced. 2 2 Among the risks that climate change harbors, meteorological extremes are one we are already experiencing. This is having a direct effect on our stakeholders, e.g., our customers, suppliers, and employees. We can take preventive action in this area by reducing our own CO emis- sions, which is one of the reasons we set ourselves the goal of achieving a 20 percent reduction in our Group-wide emissions – leaving aside our United States operating segment – by 2020 (baseline: 2008). Climate protection also carries financial risks, whether from the introduction of a levy on CO emissions or an increase in energy costs. The measures we are taking to counter these risks include measuring our own energy efficiency and finding ways to improve it. Further, in 2016 four of our subsidiaries (Magyar Telekom in Hungary, OTE in Greece, T-Mobile Netherlands, and Hrvatski Telekom in Croatia) covered 100 percent of their electricity requirements with renewable energy, while a further two (T-Mobile Austria and T-Systems Netherlands) almost met this target, thus reducing climate risks. 2 SUPPLIERS We see more sustainability in our supply chain as an opportunity – for our reputation and our business success. Apart from the general risks associated with our global procurement activities, we can be exposed to country- and supplier-specific risks. These include, for example, the use of child labor, the conscious acceptance of environmental damage or inadequate local working and safety conditions. We reduce these risks by systematically reviewing our suppliers. Our partnerships with suppli- ers that comply with international sustainability standards ensure a high level of product quality and reliable procurement. We have a special development program in place to help strategic suppliers introduce business practices that are both socially and ecologically acceptable while remaining economically efficient. This program again showed measurable successes in the reporting period and has three major advantages: It has a positive impact on our suppliers’ working condi- tions, enhances their profitability, and makes the economic relevance of sustainability clear for both sides, i.e., for our suppliers and for the Group alike. For instance, better working conditions at our suppliers