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  • 2019 Corporate Responsibility Report

Alignment with the recommendations of the TCFD

The United Nations Climate Change Conference hosted in Paris in 2015 saw the launch of the “Task Force on Climate-related Financial Disclosures” (TCFD img), 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. 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. The risk is assessed in relation to the continuation of operations as part of risk management and is managed at an operational level in the business units. In addition, we evaluate internally how reporting on climate-related financial risks and opportunities can be aligned with the recommendations of the “Task Force on Climate-related Financial Disclosures” (TCFD). This should build on the existing approaches for strategy, controlling, and risk management.

Governance
Strategy
Risk Management
Metrics and Targets
Governance
Disclosures   Guidance   Input
a) Describe the Board’s oversight of climate-related risks and opportunities.  
  • Processes and frequency by which the Board is informed about climate-related issues.
  • Does the Board consider climate-related issues when
    • reviewing and guiding strategy, major plans of action, risk management policies, annual budgets, and business plans?
    • setting the organization’s performance objectives?
    • monitoring implementation and performance?
    • overseeing major capital expenditure, acquisitions, and divestitures?
  • How the Board monitors and oversees progress against goals and targets for addressing climate-related issues.
 
  • Deutsche Telekom’s Board of Management is informed every year about the status of the company’s climate target achievement and climate protection issues in the Climate Target Monitoring Board Report.
  • Deutsche Telekom’s risk management unit reports on a quarterly basis. If any unforeseen risks arise outside the regular reporting of key risks and opportunities, they are recorded as appropriate.
    • The identified relevant risks are reported to the Board of Management of DT. The DT Board of Management informs the Supervisory Board accordingly.
    • Leading climate protection KPIs (Energy Intensity, Carbon Intensity) are part of the quarterly reporting to the responsible Board member (CHRO).
  • The Audit Committee of the Supervisory Board appraises the risks at its meetings, and the main relevant risks for the Deutsche Telekom Group are also integrated into our Annual Report.
  • The CR Board is informed about climate protection issues based on requirements.
  • Risk reporting will be expanded to encompass even more comprehensive inclusion of long-term climate-related risks.
  • Financial implications have been integrated into business planning; further management instruments are evaluated for integrating climate protection into investment decision-making (e.g. internal price on carbon).
  • Deutsche Telekom’s Board of Management decided on a new climate protection strategy for 2030 including a Science-Based Target.
  • The overarching corporate strategy was extended at the end of 2019 by “acting responsibly”. This puts a major focus on CO2 and resource reduction as part of Telekom’s strategic direction.
  • As part of our "We Care for our Planet" initiative, we have examined our value chain for opportunities to achieve greater resource efficiency and CO2 reduction. Ten areas for action have been identified and these were approved by the Board of Management.    
b) Describe management’s role in assessing and managing climate-related risks and opportunities.  
  • Has the organization assigned climate-related responsibilities to management-level positions or committees?
  • And, if so:
    • Do such management positions or committees report to the Board?
    • Do those responsibilities include assessing and/or managing climate-related issues?
  • Description of the associated organizational structure(s).
  • Processes by which management is informed about climate-related issues.
  • How management (through specific positions and/or management committees) monitors climate-related issues.
 
  • Deutsche Telekom’s current organizational CR structure can be found in the CR Report
  • At DT, the responsibility for CR includes oversight of climate-related issues.
Strategy
Disclosures   Guidance   Input
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.  
  • Description of what they consider to be the relevant short, medium, and long-term time horizons.
  • Taking into consideration the useful life of the organization’s assets or infrastructure and the fact that climate-related issues often manifest themselves over the medium and longer term.
  • Description of the specific climate-related issues for each time horizon that could have a material financial impact on the organization.
  • Description of the process used to determine which risks and opportunities could have a material financial impact on the organization.
 
  • ICT solutions have the potential to facilitate the transformation to a decarbonized society. DT is therefore participating in the studies of the GeSI (Global e-Sustainability Initiative) so as to systematically evaluate potential. For more details, please refer to the latest issue of the study.
  • For details on our risk management, please refer to our Annual Report and CR Report.
Please note: We are currently evaluating internally how reporting on climate-related financial risks and opportunities can be aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This is to be based on the existing approaches to strategy, controlling and risk management.
b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.  
  • What is the impact on the business and strategy in the following areas:
    • products and services
    • supply chain and/or value chain
    • adaptation and mitigation activities
    • investment in research and development
    • operations (including types of operation and location of facilities).
  • Description of
    • how climate-related issues serve as an input to their financial planning process
    • the time period(s) used
    • how these risks and opportunities are prioritized.
  • The impact on financial planning in the following areas:
    • operating costs and revenues
    • capital expenditure and capital allocation
    • acquisitions or divestments
    • access to capital.
  • Description of climate-related scenarios, if they were used to inform the organization’s strategy and financial planning.
 
  • Considerations of physical risks to network infrastructure, e.g. due to extreme weather, are part of our Business Continuity Management, Technical Planning and Telekom Security, as well as the regular planning process for networking.
  • Dialog is held with major suppliers on climate protection issues (e.g. Scope 3 emissions) and energy efficiency. Telekom was also repeatedly included in the CDP A List.
  • Several programs have been launched to improve energy efficiency at our sites and operations.
  • As part of our "We Care for our Planet" initiative, we have examined our value chain for opportunities relating to greater resource efficiency and CO2 reduction. Ten key areas for action have been identified for future measures leading to a more sustainable company in general.
  • As part of that program, the "We care" product label is awarded to products that have been approved by a committee of internal experts. This label is intended to help customers to identify customer-facing examples in our sustainability program.
  • The impact on our R&D budget follows the “win with partners approach”, using suppliers and especially start-ups to develop new innovative sustainable products and services in order to help our customers reduce their carbon emissions.
Please note: We are currently evaluating internally how reporting on climate-related financial risks and opportunities can be aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This is to be based on the existing approaches to strategy, controlling and risk management.
c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.  
  • Description of
    • how resilient their strategies are to climate-related risks and opportunities (taking into consideration a transition to a lower-carbon economy consistent with a 2°C or lower scenario) and
    • scenarios consistent with increased physical climate-related risks.
  • Organizations should consider discussing:
    • where they believe their strategies may be affected by climate-related risks and opportunities
    • how their strategies might change to address such potential risks and opportunities and
    • the climate-related scenarios and associated time horizon(s) considered.
  Please note: We are currently evaluating internally how reporting on climate-related financial risks and opportunities can be aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This is to be based on the existing approaches to strategy, controlling and risk management. 
Risk Management
Disclosures   Guidance   Input
a) Describe the organization’s processes for identifying and assessing climate-related risks.  
  • Risk management processes for identifying and assessing climate-related risks.
  • Determining the relative significance of climate-related risks in relation to other risks.
  • The consideration of existing and emerging regulatory requirements related to climate change (e.g. limits on emissions) as well as other relevant factors.
  • Processes for assessing the potential size and scope of identified climate-related risks.
  • Definitions of risk terminology or references to existing risk classification frameworks used.
 
  • The process for the identification of climate change related risks and opportunities includes:
    • screening media and NGO publications
    • actively supporting the work of various industry associations dealing with climate change, e.g. GeSI, econsense, 2-Degree Foundation, ICC, GSMA, ETNO
    • participation & initiation of climate change related stakeholder dialogs
    • analysis of the responses to the CDP supply chain program
    • analysis of changes in information requests from ratings such as RobecoSAM, CDP, Sustainalytics, and others
    • quarterly assessment of relevant data.
  • The process for the assessment of climate change related risks and opportunities includes:
    • identification & quantification of the relevant developments
    • calculation of the impact on operations
    • analysis of impact on value chain.
  • Furthermore, Telekom’s processes for identifying and assessing climate-related risks are integrated into multi-disciplinary company-wide risk identification, assessment, and management processes.
  • Current regulation is relevant and always considered, owing to the need to comply with statutory regulations. DT (in Germany) therefore uses the WEKRA database, which is assessed by CR specialists, to track changes in the regulatory environment. DT also uses its internal capacities (e.g. policy and regulatory affairs) for assessing and evaluating the impact of existing regulations, like ETNO, BDI, bitkom, econsense, etc.
  • Emerging regulation is considered whenever it is relevant and can be anticipated. DT is also aware of upcoming regulations by actively working within various industry associations, e.g. GeSI, econsense or bitkom and intensive stakeholder dialogues with NGOs, e.g. WWF.
b) Describe the organization’s processes for managing climate-related risks.  
  • Processes for managing climate-related risks, such as
    • how decisions are made to mitigate, transfer, accept, or control those risks
    • which processes are available for prioritizing climate-related risks
    • how materiality determinations are made within the organization.
 
  • DT manages (climate-related) risks and opportunities, identified by intensive risk screening and assessed on the basis of market research and expert knowledge, according to the process described above and published in our Annual Report.
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.  
  • How the processes for identifying, assessing, and managing climate-related risks are integrated into overall risk management.
  Please note: We are currently evaluating internally how reporting on climate-related financial risks and opportunities can be aligned with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). This is to be based on the existing approaches to strategy, controlling and risk management.
Metrics and Targets
Disclosures   Guidance   Input
a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.  
  • Key metrics used to measure and manage climate-related risks and opportunities.
  • Metrics on climate-related risks associated with water, energy, land use, and waste management (where relevant).
  • Description of whether and how related performance metrics are incorporated into remuneration policies.
  • Where relevant:
    • the internal carbon price
    • climate-related opportunity metrics (e.g. revenue from products and services designed for a lower-carbon economy).
  • Metrics for historical periods to allow for trend analysis
  • Description of the methodologies used to calculate or estimate climate-related metrics (where not apparent).
 
b) Disclose Scope 1, Scope 2, and if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.  
  • Scope 1 and Scope 2 emissions
  • Scope 3 emissions and the related risks.
  • Calculation of GHG emissions in line with the GHG Protocol methodology to allow for aggregation and comparability across organizations and jurisdictions.
  • As appropriate, related, generally accepted industry-specific GHG efficiency ratios.
  • GHG emissions and associated metrics for historical periods to allow for trend analysis.
  • Description of the methodologies used to calculate or estimate the metrics (where not apparent).
 
c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.  
  • Description of the key climate-related targets (e.g. those based on GHG emissions, water usage, energy usage, etc.) in line with anticipated regulatory requirements, market constraints, or other goals.
  • Other goals may include:
    • efficiency or financial goals
    • financial loss tolerances
    • GHG emissions avoided throughout the entire product life cycle
    • net revenue goals for products and services designed for a lower-carbon economy.
  • A description of the targets should include the following:
    • a definition of the target as absolute or intensity based
    • timeframes over which the target applies
    • the base year from which progress is measured
    • key performance indicators used to assess progress against targets.
  • A description of the methodologies used to calculate targets and measures (where not apparent).
 
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