Our integrated climate strategy
We designed our integrated climate strategy in line with our Group strategy. This is how we ensure our climate protection measures are closely connected with our core business. We have defined objectives and/or key performance indicators for each of the four aspects of our climate strategy (CO2 emissions, renewable energy, energy efficiency, and sustainable products).
The four pillars of our integrated climate strategy
We record all direct and indirect emissions using the globally recognized Greenhouse Gas (GHG) Protocol. The goal is to reduce our emissions by 20 percent by the year 2020 compared to the base year 2008 (excluding T-Mobile US). As we implement our measures to reduce CO2 emissions, we are focusing on areas with especially high energy consumption, such as our networks and data centers. This has already allowed us to moderately reduce our emissions over the past few years (excluding T-Mobile US), despite rapidly growing data volumes and the necessary network build-out. At the same time, we are expanding our proportion of renewable energy. However, the majority of our overall emissions are accounted for by indirect emissions (Scope 3 emissions ). That is why we are including our suppliers in our climate protection measures and also helping our customers reduce their CO2 emissions with relevant products and services.
We are researching and evaluating various options to increase our proportion of green energy. Possibilities include purchasing energy certificates from renewable sources and using cogeneration (“CHP”) plants to generate our own renewable energy. Some national companies are setting a great example: T-Mobile Austria and OTE in Greece obtained 100 percent of their electricity from renewable sources in 2018. When purchasing electricity, we take a variety of sustainability factors into consideration on a Group-wide level. These include, for instance, the average emission factor of the electricity mix (i.e., the amount of emissions for every kilowatt hour of electricity used) and the proportion of renewable energy. These parameters help us make our energy mix more transparent and increase the share of energy obtained from renewable sources at our company.
Because the operation of our network infrastructure calls for a considerable amount of energy, we are investing in modernization and energy-efficient technology. For instance, we are migrating our network infrastructure to IP2 emissions. In order to measure our progress, we use two key performance indicators (KPIs). They show the relationship between our energy consumption or carbon footprint and transported data volume.technology, which is not only more powerful, but also consumes less electricity than existing technologies. In addition, we are working to process data traffic from no more than a few, particularly efficient data centers. Higher energy efficiency also always brings a reduction in CO
Many of our products and services provide sustainability advantages. They can help reduce energy consumption and CO2 emissions, improve healthcare, and make logistics more efficient. Using the “Sustainable Revenue Share” KPI , we record the proportion of our overall sales accounted for by sustainable products. “Sustainable products” are products that provide sustainability advantages and that do not entail any significant sustainability risks. We also use our “Enablement Factor” ESG KPI to correlate our emissions with the potential savings for our customers. This helps us evaluate our overall performance in relation to climate protection.
Collaborating for climate protection
Effective climate protection calls for joint efforts on the part of business, politics, science, and society. That is why we are involved in numerous German initiatives, such as the 2° Foundation and the Federal Ministry for the Environment’s climate protection initiative for business, as well as a number of international associations. One of these is the Global e-Sustainability Initiative (GeSI ). As an industry association, GeSI’s vision is to help make society greener and more climate-friendly with the help of ICT solutions.
Climate protection from 2020 onward – new climate goal and revised climate protection strategy
In 2018, we revised our integrated climate strategy, devising a new Group-wide climate goal for the period beyond 2020, our current target year. The main difference between the new climate goal and the previous one is that the former takes into account emissions produced by T-Mobile US and arising from the upstream and downstream elements of the value-added chain (Scope 3 emissions ). We calculated this goal based on the methodology recommended by the Science Based Targets initiative.
In light of growing data traffic and the network build-out, we expect energy consumption to continue to rise over the coming years. To fulfill the requirements laid down by the Science Based Targets initiative, however, we are taking measures to boost efficiency and using electricity generated by renewable power sources. We have decided to switch to using 100 percent renewable energy for our entire power consumption by 2021. As things currently stand, we already derive 52 percent from renewable sources. We have set ourselves the additional goal of cutting our emissions by 90 percent (compared with 2017) in the period to 2030.
Our goal for emissions arising from the upstream and downstream elements of the value-added chain is to reduce the emissions generated per customer in the most important categories (purchased goods and services, capital goods, and product lifecycle) by 25 percent per customer. Among other things, we also plan to run workshops with our key suppliers in a bid to derive measures and agreements for reducing CO2 emissions.
In addition, we are examining how we can boost the potential of Deutsche Telekom’s products and solutions (“enablement”) to protect the climate even further – for instance by developing new sustainable products.
Climate protection at T-Mobile US
In the United States, T-Mobile US has set itself particularly ambitious climate protection goals and is looking to cut its CO2 emissions by 95 percent between 2016 and 2025. This will primarily be achieved by using Power Purchase Agreements (PPAs) to increase the share of renewable energy to 100 percent by 2021. In this connection, T-Mobile US signed up to the RE100 initiative in 2018. This initiative brings together companies who are endeavoring to obtain 100 percent of their energy requirements from renewable sources. T-Mobile US has also set itself the goal of cutting emissions in the upstream and downstream value chain (Scope 3 emissions). In the United States, the majority of Scope 3 emissions are generated in the upstream value chain. The aim is to reduce total Scope 3 emissions per customer by 15 percent compared with 2016.
Addressing climate risks
In the context of our integrated climate strategy, we address the environmental impact of our business and determine potential opportunities and risks that exist for us as well as for our stakeholders.
For example, extreme weather conditions as a consequence of climate change can have a negative impact on our business processes and lead to incidents or even network outages. A very real example of this was storm Friederike, which led to an outage of more than 600 cross-connect cabinets and over 200 mobile base stations in early 2018. Such failures can massively impact the management of rescue operations, if not render them entirely impossible. In order to be able to react appropriately in these cases, our internal “Group Policy on Continuity and Situation Management” defines responsibilities, processes, and measures. It also outlines how to handle emergency and crisis situations like floods. In addition, possible consequences of climate change are also taken into account when planning our future business activities. For instance, our network infrastructure is set up to be protected from storm conditions, changes in temperature, and high winds.
Climate change also carries financial risks, whether from the introduction of a levy on CO2 emissions or an increase in energy costs. Our contribution to the mitigation of these risks is that we measure our own energy efficiency and develop measures for improvement. We also work on the reduction of our own and our customers’ and suppliers’ CO2 emissions. Extreme weather events are another possible cause of infrastructure failures, and this could necessitate additional investment in a more robust infrastructure.
We report to the Board of Management quarterly on current climate risks within the context of our Group Risk Report. You will find more information on risk management in the “Risk and Opportunity Management” section of our annual report.
We also help our customers reduce their carbon footprint by providing them with innovative solutions (mitigation). Possible examples include innovative projects in the area of sustainable urban development and mobility, and real-time solutions for agriculture. These do not only help reduce emissions, but also optimize the use of fertilizer, seed, and machinery. Increasing yields can help us achieve the second sustainable development goal (SDG) of “zero hunger”. What’s more, telecommunications can be used to reduce the amount of food lost. For instance, the innovative product Roambee is a major help here. On top of that, we also help our customers deal with the adverse effects of climate change (adaptation). In the event of an imminent catastrophe, our infrastructure can be used, for example, to send alerts via early warning apps.
Reporting on climate-related risks based on the TCFD’s recommendations
The United Nations Climate Change Conference hosted in Paris in 2015 saw the launch of the Task Force on Climate-related Financial Disclosures (TCFD), which sets out to develop voluntary, consistent climate-related financial risk disclosures. In 2017, the TCFD published specific recommendations for putting these disclosures into practice, which companies can use as a guideline to inform investors, lenders, insurers, and other interest groups about the risks climate change presents for their business model. Deutsche Telekom welcomes the aims behind the TCFD, and we are currently investigating how we can put its specifications into practice as part of our existing and future climate protection measures.
In a workshop in December 2018, we established potential means for aligning our reporting on climate-related financial risks with the recommendations issued by the TCFD. A project concept is being drawn up for further development. Besides risks, climate change also opens up opportunities for ICT companies, and thus for Deutsche Telekom’s business model, because our products and services are helping our customers reduce their carbon footprint and the emissions they produce. We record these positive effects in our Enablement Factor KPI.
The participants at our first internal TCFD workshop included representatives from the Strategy, External Reporting/Accounting, Investor Relations, Controlling, Risk Management, and Corporate Responsibility departments. We made a conscious effort in this case to involve the most important departments in the process at an early stage, thereby laying the foundations that will enable us later to promptly implement the commonly defined measures in all steering-related areas within the company.
To identify and subsequently integrate the appropriate measures into the existing approaches adopted by Controlling and Risk Management, we will also enter into intensive discussions with all relevant internal stakeholders. In this way, we will ensure that all TCFD-related activities are in line with our business processes and our new climate strategy.
Recognition of leadership role in climate protection
| In the CDP ranking again|
In 2018, we made it onto the CDP Climate A List for the third time in a row. The CDP ranking recognizes companies that don’t just exhibit transparency when it comes to climate change, but are also aware of how climate change affects their business, actively manage the opportunities and risks associated with climate change, and are pioneers and role models in their approach to climate protection. Under the CDP, we have reported Group-wide not only Scope 1 and Scope 2 emissions but also Scope 3 emissions from our business operations in Germany and almost all our international companies since 2014.