ESG Highlights: 2023 Consolidated Report

We present our evolution and commitment to social and environmental impacts in alignment with the Sustainable Development Goals (SDGs) in the ESG´s Highlights Report 2023. This document underlines the most meaningful and important topics concerning the company’s sustainability accomplishments. Our ESG priorities focus on three strategic pillars, outlined below:

Environmental | Building a green future

We are committed to digitalisation as a key tool for tackling our environmental challenges. In the environmental pillar our priorities are centralised in:

• Minimise our environmental impact, including achieving net-zero emissions, 100% renewables and zero waste.
• Maximise our reach in providing products and services that decarbonise the economy.

During the last year we achieve the following milestones:

• We reduced our total GHG emissions (Scopes 1, 2 and 3) by 51% in just eight years.
• Thanks to eco-efficiency measures, we reused and recycled 97% of our waste.
• We avoided 86.1 million tonnes of CO₂ for our customers thanks to our products and services.
• For the 10^th consecutive year, we are part of the CDP A List, which includes the leading climate management companies worldwide.
• In global terms, the electricity we consume in our own facilities is 84% renewable energy (87% renewable energy at third party facilities).
• We reduced energy consumption per unit of traffic by 89% compared to 2015.
• 20% of mobile phones collected from customers: this is our new 2030 target, in alignedwith the GSMA.
• 313,805 reused items of network equipment and cables, thanks to initiatives such as the MAIA project.
• 98% of Telefónica’s facilities are located in habitats with low or very low biodiversity value.
• We follow TNFD recommendations to minimise our impact on biodiversity.

At Telefónica we develop green digital solutions to help our customers transition towards more sustainable and competitive business models.

Social | Helping communities to thrive

In the social pillar our efforts are focused in:

• Reduce the digital divide by connecting the under-served and bringing transferable, digital skills to people.
• Ensure an inclusive and safe workplace to attract and retain the best talent.
• Transform the customer relationship with new offerings and opportunities through an ESG lens.

Over the past year, we’ve reached significant milestones, including:

• The level of commitment from our employees increased by seven points, with the eNPS reaching 76 in 2023.
• 104,132 employees globally in 2023, 99% of them on permanent contracts.
• We were recognised by the Bloomberg Gender Equality Index as one of the companies most committed to gender equality globally.
• +1,090 employees with disabilities in Telefónica’s workforce than last year.
• NPS reached 31 points in 2023, marking an improvement of 10 points vs. 2017.
• 52% of our solutions have been verified as Eco Smart for the environmental benefits they generate for our B2B customers.
• More than 80 products and services evaluated under the Responsible Design framework to date.
• 52% of Telefónica’s services have been verified as Eco Smart.
• We implemented the Eco Rating in 100% of our markets.
• More than 1.2M people given digital skills training to improve their skills and employability.
• 92% of the population in all our markets has access to our 4G/LTE mobile broadband coverage.
• We achieved 82%-99% mobile broadband coverage in rural areas in our main markets.
• We generated a positive contribution amounting to over €100 billion.
• 100% of our operations have conducted human rights risk assessments to identify, prevent, mitigate and remedy any potential adverse impacts.
• Leading telco in the latest edition of the Ranking Digital Rights index and the Digital Inclusion Benchmark.

For every euro of gross operating margin we obtained in 2023, we generated 4.3 euros of contributions to the GDP of the main countries in which we operate.

Governance | Leading by example

In the realm of governance, our attention is directed towards:

• Embed ESG across the business and our supply chain, with the highest ethical standards.
• Ensure the security and privacy of customer data with the highest standards and processes.

During 2023 we achieve the following highlights:

• 20% of our professionals’ variable remuneration is linked to ESG targets such as reductions in carbon emissions and gender equality.
• 3,300 courses on sustainability were taken by our employees in 2023 through the Company’s newly launched ESG Academy.
• 94,990 employees trained in anticorruption training since the launch of the ethical Training Framework in 2022.
• Zero tolerance of corruption and bribery throughout the value chain. 5.823 suppliers have received guidance on integrity during 2023.

100% of our suppliers are required to accept our sustainability standards.

• 19 euros per every 100 euros of turnover is Telefonica´s tax contribution in 2023.
• 7,580 million euros are the taxes paid during 2023 of which 2,464 million euros are borne taxes and 5,116 million euros are collected taxes.
• MSCI and S&P DJSI has awarded us the highest score, once again, for our tax transparency.
• More than 95% of contracts/RFPs with suppliers will contain security requirements by 2025.
• 75,821 hours of training for our employees in data protection and cybersecurity with over 94,642 attendees.

Read the complete presentation in the link below: