Socially responsible investment
SRIT-Shares serves as an indicator we can use to assess our sustainability performance.investment products consist of securities from companies that have passed an audit based on environmental, social, and governance (ESG ) criteria. The development of demand from socially responsible investors for
With our Socially Responsible Investment ESG KPI we measure how the financial markets perceive our CR activities.
The concept of the United Nations’ Sustainable Development GoalsSustainable Development Goals (SDGs).) is an increasingly popular topic among investors. To assess the impact of our activities on the SDGs and put it into quantifiable terms, we conducted an impact measurement project as early as 2018 and are continuing to do so consistently.(
T-Shares in sustainability ratings and indexes KPI
As part of our CR strategy, we have taken part successfully for many years in ESGratings, which we select based on reputation, relevance, and independence.
In 2020, T-Shares were again listed on leading sustainability indices, including S&P SAM’s prominent DJSI World and DJSI Europe. Our shares were also listed yet again in the FTSE4Good index (for the ninth year running) and the UN Global Compact 100 index.
In the reporting year, three other sustainability indices also listed our shares: the S&P Europe Developed LargeMidCap ESG Index, S&P SAM’s S&P Global 1200 ESG Index, and Vigeo Eiris’ Euronext Vigeo World 120.
A selection of other T-Shares’ listings can be found in the table below.
- The most important key figures for measuring and managing climate-related opportunities and risks
Socially Responsible Investment (SRI) ESG KPI KPI
The Socially Responsible Investment (SRI) ESG KPI indicates the proportion of shares in Deutsche Telekom AG held by investors who take, among other criteria, environmental, social, and governance criteria into account for their investment strategy. („SRI Investment“; SRI for „Socially Responsible Investment“)
And our commitment for more sustainability pays off: As of September 30, 2020,
13 percent of all T-Shares were held by investors who partially take environmental, social, and governance criteria into account for their investment strategy; 9 percent were held by investors who manage their funds primarily in accordance with SRI aspects.
Our ambition: increase KPI
As the basis of calculation is updated annually, year-on-year comparisons may be of limited value. (Source: Ipreo until 2016; from 2017 Nasdaq based on data of Thomson Reuters)
- The most important key figures for measuring and managing climate-related opportunities and risks
- Criterion 1 (Strategy)
- Criterion 7 (Control)
Sustainable investment at Deutsche Telekom
We also apply our sustainability principles to the assets of the Telekom Pension Fund. Besides financial aspects, we have also been factoring in ecological and social principles, as well as guidelines for good corporate governance since 2013 in selecting these investments. This encompasses:
- Targeted efforts to achieve the Sustainable Development Goals (SDGs) by exercising our rights to have a say in decisions as a shareholder
- General ban on all investments in companies that manufacture or do business with “controversial weapons” (e.g., anti-personnel mines, cluster munitions, nuclear weapons, biological or chemical weapons)
- Ban on investments in companies that have repeatedly violated the principles of the UN Global Compact
We pursue a best-in-class approach and therefore focus on investments in companies that are the best in their sector in terms of sustainability performance. Our aim is to reconcile attractive profit expectations with sustainable values
The sustainable capital investment strategy for the Deutsche Telekom Pension Fund received praise from experts in 2019, when we came second in the “ESG Implementation” category at the Institutional Assets Awards organized by the specialist publishing house of German newspaper Frankfurter Allgemeine Zeitung. The award recognizes successful investment strategies that have been implemented in a particularly coherent manner.
In 2020, portfolio institutionell, the medium for institutional capital investment, gave the Telekom Pension Fund two awards. In the reporting year we received the award for the “Best pension fund/CTA” – already for the third time. The Telekom Pension Fund also took first place in the “Best sustainable investor” category for its sustainable capital investment.
Since 2019, Deutsche Telekom’s capital investments (DT Trust) have also been geared toward ecological and social standards. The DT Trust is based on the criteria for Norway’s Government Pension Fund (“Norges”). Among other things, we exclude companies that violate human rights, manufacture certain weapons, or whose core business is considered harmful to the environment.
We evaluate other sustainable and attractive financing models at regular intervals in close consultation with the Corporate Responsibility and Treasury units.
To ensure that our reporting meets our stakeholders' current requirements, we monitor and support the development of regulations at national, European, and global levels. Where required, we actively contribute to legislative activities through position papers and consultation contributions within the framework of interest groups and industry associations - for example, ETNO (European Telecommunications Network Operators' Association) and econsense. One of the most critical, forward-looking European regulatory initiatives of 2020 was adopting the so-called EU Taxonomy Regulation.
The aim of the taxonomy: to create incentives for more sustainable investment strategies.
The EU regulation aims to channel capital flows into sustainable economic activities. The EU taxonomy is to regulate which activities are to be regarded as sustainable in this sense with an extensive catalogue of criteria, which will be published in the first quarter of 2021. As a critical element of the European Green Deal, the taxonomy intends to accelerate the shift towards an ecologically responsible economy.
Conditions of the Taxonomy
To at least one of the six environmental objectives, as defined in the proposed regulation
Do no significant harm
An activity can only be considered to contribute to one of the six objectives if it does not result in other significant adverse environmental effects ("Do no significant harm" / "DNSH" principle).
Comply with minimum safeguards
The minimum safeguards are social requirements in accordance with
- the OECD Guidelines for Multinational Enterprises,
- the the United Nations Guiding Principles on Business and Human Rights,
- the the Core Labor Standards of the International Labor Organization ILO
- as well as other requirements of European legislation.
Deutsche Telekom complies with the minimum protection measures at the Group level. We report transparently on this in the section "Human rights".
Impact on Deutsche Telekom
At the time of going to press for this CR Report, the final legal act of the EU ("Delegated Act") and the specific criteria associated with it were not yet available. We continuously evaluate the draft criteria published by the EU so that we can react promptly to developments. As things stand at present, we assume that the taxonomy criteria for the Network and Data Centers business areas will be relevant for Deutsche Telekom.
According to the analyses, the following two aspects will play a central role in our future reporting, which will take full account of the requirements of the Taxonomy Regulation:
- "Greening of": Measures to improve the energy efficiency of our networks and data centers
Key insights that will play a role in this in the long term can already be found in this 2020 report. These indicators have been audited by the auditing firm PricewaterhouseCoopers (PwC). You can find out more about "Greening of" at: Energy efficiency, PUE, TCFD, SASB.
- "Greening by": The contribution we make to climate protection in other sectors
Many key figures and information that will play a role in greening(do you mean greening? If so I think we should say greening) in the long term can already be found in this report. The underlying indicators have been audited by the auditing firm PricewaterhouseCoopers (PwC). Further information on "Greening by" can be found at: Enablement Factor, Sustainble Revenue Quota, TCFD, SASB.
Currently, we see an increased need for clarification in assessing the potential of our products and services to contribute to climate protection in other industries.
How we can meet future requirements
We are already analyzing our activities based on case studies in individual business areas. The findings from these will be of use to us in subsequent company-wide reporting.
We have observed that investors are increasingly incorporating SRIapproaches in their investment strategies. More and more investors and rating agencies are also inquiring about our CR activities. To meet these requests, we use different formats – both in our reporting and in direct dialog.
We annually publish this Corporate Responsibility Report and a non-financial statement in the annual report. We also offer ESG information for financial market players on our company website under “Responsibility” and on our investor relations portal under “Socially Responsible investments (SRI)”.
We strive to engage in personal dialog with investors and regularly hold national and international information events as SRI roadshows. We also regularly take part in SRI conferences or meetings, and, upon request, present our CR strategy as best practice. In addition, we provide information to interested investors in conference calls, and answer numerous direct inquiries. This year, most of our investor dialog – such as our SRI roadshows – took place online due to the coronavirus pandemic.
Tax policy guidelines
The Group Tax department is responsible for ensuring that the Deutsche Telekom Group pays taxes at the national and international level in accordance with the applicable laws. This includes the Group’s income taxes, which must also be regularly reported in our IFRS financial statements, as well as VAT and income tax on salaries payable within the context of customer transactions and for Group employees.
Group Tax also ensures that the Group has an efficient tax structure within the framework of German and foreign tax laws as applicable in each country (avoidance of any unnecessary tax burden not prescribed by law). The goal is to achieve sustainable tax efficiency for the Group, for which Group Tax regards transparent, trust-based cooperation with local tax authorities as essential, e.g., in the context of company reorganizations that are advisable in business terms.
In addition, Group Tax undertakes to contribute as much as possible to the success of Deutsche Telekom’s operations, e.g., by providing detailed advice regarding new business models or innovative technological developments. In such matters, it focuses particularly on clarifying upfront any unresolved tax law-related issues as well as providing practical solutions to meeting all applicable tax requirements.
The tax strategy – Tax Compliance, Sustainable Tax Efficiency, Tax as Valued Business Partner – has also been adopted by the Deutsche Telekom Board of Management.
You can find out more about what Group Tax does, its principles, and its approach to responsible tax practices in this related document.
Deutsche Telekom participates in initiatives intended to develop a comprehensive approach to determining and publishing meaningful information about tax payments by enterprises and groups. The aim is to give a full and differentiated view of the various contributions to the financing of the public domain that are made in connection with or otherwise result from enterprises and entrepreneurial activities. In this context, Deutsche Telekom determines “Total Tax Contribution” for the main European Group companies in the telecommunications sector. This approach is explained in more detail in the attached document on Total Tax Contribution, which also contains the respective information relating to Deutsche Telekom. Deutsche Telekom also intends to determine and publish such information for the coming years.
Research and development
As a future-oriented telecommunications business, we support and participate in ongoing research. We collaborate with various universities. For example, we established a professorship for software engineering (with a focus on blockchain) at the CODE University of Applied Sciences in Berlin. We invest in various fields of research such as the Internet of Things33 million euros in research and development in the Group in 2020.(IoT). We invested a total of