Sustainability Strategy

For Telefónica, sustainability means thinking about society and the planet and focusing the business to be part of the solution to the challenges facing humanity. Equally, being a sustainable company is critical for the future of our business.

We believe it is our duty to take advantage of the capabilities of connectivity and digitalisation, not only to bring value to our customers, but also to help tackle major challenges such as climate change, inequality, employability and misinformation. We want to:

• Build a greener future: taking advantage of the power of digitalisation to curb climate change.
• Help society thrive: promoting economic and social progress based on digitalisation, leaving no one behind.
• Lead by example: maintaining strict levels of governance oversight in order to build trust.

In this way we will achieve our purpose: to make our world more human by connecting people’s lives and to become more competitive and relevant.

In fact, our ESG approach underscores the three key targets of our new GPS strategic plan:

• Growth: expanding our market and building customer loyalty through responsible communication and products and services that meet their social and environmental expectations.
• Profitability: decarbonising our operations and increasing efficiency through energy savings and circularity, as well as increasing our sustainable financing.
• Sustainability: leading benchmark ESG ratings through excellent governance, a sound ESG culture (in the value chain as well), and diverse, qualified and committed talent.

How can we make sure we are on the right track? Listening to our customers, employees, investors, suppliers, governments and society in general, analysing our IROs (Impacts, Risks and Opportunities) and drawing up a double materiality matrix.

We have been reporting double materiality information for three years, using an updated format since 2023 in accordance with the new Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS)

ESG Telefónica profile

Discover Telefónica ESG strategy, progress, targets and the main facts in the following presentation. If you want more information, sign up to our ESG newsletter.

At Telefónica we have a code of ethics -the Business Principles– for the entire value chain, including suppliers and business partners.

ESG Ratings, indexes & rankings

ESG ratings, indexes & rankings are a permanent incentive to keep improving. In the last months:

• Sustainalytics has recognised Telefónica as an ESG Industry top rated company.
• CDP has included Telefónica in the A list for the tenth year in a row.
• Financial Times has included Telefónica among Europe’s Climate Leaders 2023.
• Workforce Disclosure Initiative (WDI) has awarded us a special mention for “Workforce Action” and we were among the finalists for the “WDI Award” thanks to our score of 90%.
• Telefónica has been included once again in the FTSE4Good Index (2023) and we are sector leaders.

87/100

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4.6/5

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This is how we differentiate ourselves

In order to specify the areas of work that help us to make progress in this mission, we have a global Responsible Business Plan. The 2024-2026 plan seeks to transform customer relationships, the operating model and long-term value.

We are pioneers in ESG financing within the telco sector, with a volume of more than 10 billion euros

Sustainability at the highest level

The Sustainability and Regulation Committee of the Board of Directors (Telefónica has been a pioneer in the Ibex35 having a Sustainability Committee on its Board since 2002) approves and monitors the corporate Responsible Business Plan.

Customer satisfaction, gender equality and CO₂ reduction form part of our employees’ variable remuneration

We are transparent

The company’s annual Consolidated Report contains detailed information on our progress in the area of sustainability. This report is prepared in accordance with the main international reporting standards (GRI, SASB y TCFD), the new Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS).

In addition, we prepare specific reports on issues which require special attention:

• Fiscal transparency, because in accordance with the Business Principles of the Telefónica Group, we ensure compliance with tax laws, regulations, and regulatory obligations with the tax authorities.

• Sustainable Development Goals (SDGs), with our contribution to the United Nations 2030 Agenda.
• Impact measurement methodologies, through which we explain how we measure our contribution to society and to the planet.
• Report on Transparency in Communications, detailing our commitment to the fundamental rights of privacy and freedom of expression.

Our efforts are paying off: we are recognised by prestigious indices such as the Dow Jones Sustainability Index (DJSI), CDP, Sustainalytics, or FTSE.