Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environmental Sustainability
• Social Responsibility
• Digital Inclusion
• Human Rights

Environmental Achievements

• Reduced emissions by 48% in Distrito C project
• Significant energy savings in Distrito C project (32% in climate control, 100% in hot water, 42% in lighting)

Social Achievements

• Launched numerous initiatives to reduce the digital divide, including social rates, prepaid plans, and public telephony
• Implemented various programs to promote digital literacy and skills development
• Supported numerous social and cultural initiatives through Fundación Telefónica, benefiting over 26 million people
• Launched Proniño project to provide schooling for children in Latin America
• Established ATAM to support disabled employees and the wider community

Governance Achievements

• Published annual Corporate Governance reports
• Won the Spanish Company Award for Best Financial Information on the Internet
• Listed on the Dow Jones Sustainability Index and FTSE4Good Index

Climate Goals & Targets

Environmental Challenges

• Competition in the telecommunications market
• Addressing the digital divide
• Managing risks related to reputation and corporate responsibility

Mitigation Strategies

• Proactive risk management through internal and external analysis
• Implementation of uniform policies to manage risks
• Active stakeholder engagement
• Investment in technological innovation and infrastructure development
• Initiatives to promote digital inclusion and reduce the digital divide

Supply Chain Management

Responsible Procurement

• High percentage of local suppliers (92%)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Guidelines (2002)

Certifications: ISO 9001:2000 (various business units)

Awards & Recognition

• Spanish Company Award for Best Financial Information on the Internet
• Listed on the Dow Jones Sustainability Index and FTSE4Good Index
• Numerous other awards for various business units and initiatives

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Environmental
• Social
• Customer Relations

Environmental Achievements

• Implementation of specific policies to extend best corporate responsibility practices from Europe to Latin America, and vice versa.
• District C: largest rooftop solar power producing park in Europe (21.5 million euros)

Social Achievements

• Digital inclusion of people with low economic resources (over 5 million prepaid and controlled lines in Latin America)
• Digital inclusion of people with disabilities (via the project Telefónica Accesible)
• Fundación Telefónica carried out a strategic revision of all its projects, focusing its efforts on two areas of activity: Education (Educared) and the integration of children into society (Proniño).

Governance Achievements

• Implementation of the Corporate Model that is applied periodically and homogeneously in the Companies of the Group, allowing the evaluation of both the importance of each of the risks that could affect the companies, and the degree of control over each of the risks.
• Publication of annual reports on Corporate Responsibility in Argentina, Brazil, Chile and Peru.
• Implementation of Telefónica Group’s Code of Ethics.

Climate Goals & Targets

Environmental Challenges

• Lack of involvement in local development; health risks of infrastructures; failing to address stakeholders’ demands; failing to guarantee equal opportunities; relations between the company and its employees; potential abuse of dominating position; contents not desired by the customers, incoherence between actions and messages; lack of transparency; or bureaucracy in the relations with the stakeholders.

Mitigation Strategies

• Implementation of a methodology for dialogue with stakeholders, geared towards achieving alliances and collaboration relations with stakeholders.
• Development of a Corporate Reputation Model which can be monitored periodically (RepTrack).

Supply Chain Management

Supplier Audits: 26 companies audited in 2004, 4 companies audited in 2005

Responsible Procurement

• Establishment of CSR requirements for Telefónica suppliers.
• High percentage of contracts awarded to local suppliers (an average of 85% in 2005).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, AA1000/AS

Third-party Assurance: Ernst & Young

Awards & Recognition

• European Environment Award
• Empresa y Sociedad Award to the Best International Social Action
• PRnoticias users choose Telefónica as the company with the best CSR project
• Infanta Cristina Comunicación 2004 IMSERSO Prize
• Special Award CERMI.es 2004
• Most significant social work 2005 (Argentina)
• Three awards for Aulas Hospitalarias (Peru)
• Fundación Codespa Award to Corporate Solidarity

Environmental Metrics

ESG Focus Areas

• Economic impact
• Environmental impact
• Social impact

Environmental Achievements

• Achieved 20% of the long-term objective to reduce energy consumption by 30% (measured in kWh/equivalent access) by 2015.
• Energy expenditure reduction of €7.6 million, a reduction of 68 GWh and approximately 24 kTonCO2eq through energy efficiency projects.
• Purchased 736 GWh of energy from renewable sources, preventing the emission of 26.5 Teq CO2eq.

Social Achievements

• Increased the percentage of women in management positions to 19.1%.
• Improved employee commitment score to 76%, two points above 2010.
• Ranked #17 among 350 companies in the Great Place to Work Institute's global ranking.

Governance Achievements

• No material cases were decided against Telefónica, nor did the company receive any material sanction in Europe in 2011.
• Implemented a Global Performance and Talent Management Model.

Climate Goals & Targets

Environmental Challenges

• Fierce market competition and worsening economic situation in Spain.
• Managing risks associated with a failure to comply with Corporate Guidelines.
• Reputational risks associated with offering new digital services.

Mitigation Strategies

• Investment of around €3 billion in high-speed broadband networks and spectrum acquisition.
• Implementation of a simple and effective management model to manage risks associated with Business Principles.
• Specific analysis on the Reputational Risks of Privacy and Data Protection of the digital services being launched.

Supply Chain Management

Supplier Audits: 1,770 audits on at-risk suppliers

Responsible Procurement

• Supply Chain Responsibility Policy
• Rule of Extending the Business Principles to the Supply Chain
• Purchasing Instructions
• Corporate Regulations on Control
• Environmental Management Requirements for Suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters

Transition Risks

• Regulatory changes related to emissions

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI G3.1, AA1000AS (2008)

Certifications: ISO 14001

Third-party Assurance: Ernst & Young, Aenor

Sustainable Products & Innovation

• Green ICT services (smart building services, smart metering, M2M solutions)
• Energy-efficient devices

Awards & Recognition

• Dow Jones Sustainability Index
• CDP Leadership Index
• Verdantix Green Quadrant
• Great Place to Work
• Numerous other awards in different countries

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• Positioned itself among the world's top five leading telecommunications companies in the Carbon Disclosure Project (CDP)
• Achieved direct energy savings of €5 million
• Established a new CO2 emissions reduction target of 30% per customer by 2020
• Avoided the emission of 310,000 tonnes of CO2 thanks to the purchase of 892 GWh of energy from renewable sources

Social Achievements

• Launched digital inclusion projects in Peru to identify best inclusion initiatives in rural areas using ICT services
• Created Wanda with MasterCard for mobile payments in Latin America for those with limited access to bank accounts
• Implemented the M-Inclusion project for social inclusion through mobile solutions in Europe and Latin America
• Analyzed the Group's impact on human rights issues
• Signed the Governing Principles of Freedom of Speech and Privacy of ICT services
• Developed a Methodology Guide for identifying and evaluating child labor risks

Governance Achievements

• Continued to work on the implementation and dissemination of the ethical code
• Achieved a 96% score in the Dow Jones Sustainability Index 2012 for Code of Ethics/Compliance/Corruption and Bribery
• Implemented regulations on gifts, invitations, and expenses to avoid corrupt practices
• Conducted approximately 950 internal audits and inspections

Climate Goals & Targets

Environmental Challenges

• Complex operating environment in Europe
• Exchange rate fluctuations
• Regulatory challenges
• Weaknesses in the management of suppliers' supply chains
• Health and safety issues in Asian suppliers
• Delays in updating documentation for workforce support in Latin America

Mitigation Strategies

• Improved financial flexibility through asset management and cash flow generation
• Updated Methodology for Managing Reputational Risks
• Implemented the Aliados program for sustainable management with third parties
• Conducted audits and developed improvement plans for key suppliers
• Implemented various energy efficiency projects resulting in savings of €5 million

Supply Chain Management

Supplier Audits: 11 audits of key suppliers in the UK, more than 13,900 administrative audits and 1,244 in situ audits in Latin America

Responsible Procurement

• Global Purchasing Model based on transparency, simultaneity, equality of opportunity, objectivity, customer service, and compliance
• Electronic commerce tools
• Aliados program

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI-G3.1, AA1000APS

Certifications: ISO 27000:2005

Third-party Assurance: Ernst & Young, Aenor, LBG

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green ICT services (Smart Buildings, Smart Transport, Smart Clima)
• Accessible mobile phones

Awards & Recognition

• Great Place to Work awards
• Dow Jones Sustainability Index recognition
• CDP recognition
• Numerous other awards listed in the report

Environmental Metrics

ESG Focus Areas

• Climate Change
• Digital Inclusion
• Diversity & Inclusion
• Ethical Behaviour
• Data Privacy & Security
• Supply Chain Sustainability

Environmental Achievements

• Achieved 88% electricity consumption from renewable sources (100% in main markets)
• Reduced carbon emissions by 61.1% compared to 2015
• Avoided 9.5 million tonnes of CO2 at customer level

Social Achievements

• Increased employee recommendation (eNPS) to 65% (from 58% in 2019)
• Improved Net Promoter Score (NPS) by 7 percentage points in four main markets
• Launched Movistar Health, an online telemedicine service
• Launched Movistar Prosegur Alarmas, a security service

Governance Achievements

• Updated Compliance Function Charter
• Implemented a Digital Privacy Framework
• Incorporated sustainability objectives into employee variable remuneration
• Published Telefónica’s Digital Deal

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic's impact on revenue and OIBDA
• Supply chain disruptions
• Maintaining network security and data privacy
• Addressing inequality in access to technology

Mitigation Strategies

• Implemented cost-cutting measures
• Leveraged state-of-the-art networks to absorb increased traffic demand
• Provided support to communities through donations and services
• Developed alternative sourcing strategies
• Strengthened security protocols
• Developed upskilling and reskilling plans for employees

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supply Chain Sustainability Policy
• Supplier sustainability requirements

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI

Certifications: ISO 27001, ISO 22301, ISO 22320

Third-party Assurance: PricewaterhouseCoopers Auditores, S.L.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Eco Smart services
• Smart Agro solutions

Awards & Recognition

• World Benchmarking Alliance ranking (2nd globally in digital inclusion)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Digital Inclusion
• Diversity & Inclusion
• Ethical Behavior & Compliance
• Data Privacy & Security
• Sustainable Supply Chain

Environmental Achievements

• 7.2% reduction in energy consumption since 2015 (while data traffic increased 7.4x)
• 100% renewable electricity use in Germany, Spain, Brazil, Peru, and Chile (82% globally)
• 4.4 million electronic equipment reused
• 98% of total waste recycled
• 32% reduction in Scope 3 emissions since 2016
• 81.7 million tonnes of CO2e avoided by customers thanks to Telefónica's products and services

Social Achievements

• 78% of employees acquiring and developing new skills
• Hybrid working models at 100% of operations
• 100% of operations biannually assessed to identify and mitigate human rights impacts
• More than 1,305,715 people trained in digital skills
• Ranked #1 in the WBA Digital Inclusion Index 2023

Governance Achievements

• Balanced & diverse Board (33% women; 60% independent)
• >91k employees trained in Responsible Business Principles
• ~95k employees received anti-corruption training
• 0 fines for data protection issues due to security breaches
• +18k supplier audits in 2022

Climate Goals & Targets

Environmental Challenges

• Reducing Scope 3 emissions across the value chain
• Ensuring sustainable practices across the supply chain
• Addressing the digital divide
• Maintaining data privacy and security

Mitigation Strategies

• Climate Action Plan aligned with the 1.5°C scenario
• CDP Supplier Engagement Leader program
• Investments in digital inclusion initiatives
• Robust data protection policies and training programs
• Supplier audits and engagement

Supply Chain Management

Supplier Audits: 18,578 audits in 2022

Responsible Procurement

• Minimum standards for all suppliers
• Low carbon procurement considering internal carbon pricing

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, SASB Telecommunication Services, TCFD Recommendations, IIRC Recommendations, EU Taxonomy

Certifications: ISO 14001, ISO 50001 (Spain, Brazil, Germany, Chile)

Sustainable Products & Innovation

• Eco Smart services
• Eco Rating for mobile phones

Awards & Recognition

• CDP Climate A List (9 consecutive years)
• CDP Supplier Engagement Leader (3 consecutive years)
• Bloomberg Gender-Equality Index (6 consecutive years)
• #1 in Digital Inclusion Benchmark (ICT sector)
• #1 in Social Transformation Baseline Assessment
• #1 in Digital Rights (Telco sector, 3 consecutive years)

Environmental Metrics

ESG Focus Areas

• Responsible management of the customer experience
• Network and data security
• Digital inclusion
• Contribution to decarbonisation of the economy
• Human capital
• Diversity and Inclusion
• Governance and culture of sustainability
• Ethics and compliance
• Responsible supply chain management

Environmental Achievements

• Reduced energy consumption by 89% per unit of traffic since 2015
• 100% renewable electricity consumption in Europe, Brazil, Chile, and Peru
• Reduced Scope 1, 2 & 3 emissions by 51% over the last eight years
• Recycled 97% of waste in 2023
• Reused 313,805 pieces of network equipment in 2023
• Avoided 86.1 million tonnes of CO2e for customers thanks to services

Social Achievements

• Increased NPS (Net Promoter Score) by over 10 points since 2017
• Improved employee commitment with eNPS reaching 76 in 2023 (7 points higher than 2022)
• 32.8% women in executive positions in 2023
• More than 4,400 customer surveys conducted in Spain, Brazil, and Germany

Governance Achievements

• 40% female directors on the Board
• Published the first report on environmental and Human Rights Due Diligence process
• 20% of employee remuneration linked to ESG objectives

Climate Goals & Targets

Environmental Challenges

• High levels of inflation
• Sharp increases in benchmark interest rates
• Geopolitical conflicts
• Increasing political polarization
• Strong competition in the telecommunications sector
• Regulatory challenges
• Skills shortages in the market
• Scope 3 emissions

Mitigation Strategies

• New strategic plan (GPS)
• Technological transformation (fiber, 5G, AI)
• Energy efficiency and renewable energy plans
• Circular economy practices
• Restructuring and right-sizing the organization
• Supplier engagement initiatives
• Reskilling and upskilling programs
• Internal mobility initiatives

Supply Chain Management

Supplier Audits: 18,324 audits in 2023

Responsible Procurement

• Code of conduct
• Supplier sustainability requirements
• Circular economy criteria

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Temperature increase

Transition Risks

• Electricity price increases
• Regulatory changes

Opportunities

• Eco Smart products and services
• Renewable energy
• Sustainable finance

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC, TNFD

Certifications: ISO 14001, ISO 50001

Third-party Assurance: AENOR

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 13 (Climate action)

Telefónica's initiatives contribute to these goals through renewable energy, energy efficiency, digital solutions, and sustainable supply chain management.

Sustainable Products & Innovation

• Eco Smart products and services
• New FTTR device with 70% recycled plastic
• HomeSpot 5G Router

Awards & Recognition

• CDP Climate A List (10 consecutive years)
• Bloomberg Gender Equality Index
• Most Impressive Corporate Hybrid Capital Issuer 2023

Environmental Metrics

ESG Focus Areas

• Digital Inclusion
• Competitiveness
• Sustainability
• Innovation

Environmental Achievements

• Reduced environmental impact of networks (Next-generation networks based on FTTH and 5G technologies offer lower environmental impact)

Social Achievements

• Promoting digital skills, digital inclusion, social cohesion and an environmentally sustainable future
• Improved access to services in areas such as health, education or work, promoting advanced digital experiences

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Declining competitiveness of the European telecoms sector
• Investment gap of €200 billion for gigabit and 5G connectivity by 2030
• Outdated regulatory and competition policy focused on short-term pricing
• High degree of fragmentation of national geographic markets
• Divergent approach to spectrum allocation for mobile broadband
• Lack of consistent quality of connectivity across the EU
• Virtual non-existence of European digital services

Mitigation Strategies

• Review of existing EU regulation to remove barriers to investment
• Competition policy that strengthens the telecoms sector
• Regulatory framework that frees up resources for digital infrastructure and services
• Improved radio spectrum policy
• Coordinated action to prevent and remove unjustified barriers
• Prioritizing the Digital Networks Act (DNA)

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• SDG 9 (Industry, Innovation and Infrastructure)
• SDG 10 (Reduced Inequalities)
• SDG 13 (Climate Action)

High-quality connectivity contributes to innovation, economic growth, and reduced digital divides. Next-generation networks aim for lower environmental impact.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed