Sustainable Procurement at Deutsche Telekom Group.

Sustainable Procurement at Deutsche Telekom Group.
Autor / Thema der Präsentation Sustainable Procurement at Deutsche Telekom Group. Delete German “Erleben….” Huixin Zheng: Ich habe den German “Erleben….” mit einem weißen Textfeld abgedeckt. March 2010

Autor / Thema der Präsentation
CR-Strategy. Corporate Responsibility at Deutsche Telekom has various functions. Autor / Thema der Präsentation Governance Corporate values (new principles) Code of Conduct Social Charter Anti-Fraud Compliance Risk management Data protection Diversity policy Customers Customer satisfaction Service portfolio Customer data protection Products and services adjusted to the Nneeds Applications for special needs Qualification Retirement provision Employee satisfaction Diversity Employee dialogue Health care Work-life balance Mobile working Corporate volunteering Charitable contributions Employees Compliance to human rights and social environmental standards Diversity of suppliers Suppliers Waste management Recycling Effective disposal Fleet Reduction of carbon dioxide emisions Reductions in product manufacture and processing activities Environment & Climate Society Social engagement/ Corporate Citizenship Innovations social -cultural impacts of new products Expanding communi-cations solutions Finance Market Sustainable investment Evaluation by rating agencies CR is an issue with many differnt facets, e.g. governance, customers, employees, environment- and climate-protection, society, financial markets and (last but not least) suppliers. Regarding suppliers the top prority is the compliance to human rights as well as labor and environmental standards. Beside that we also promote pro-active eco-efficiency and the development of innovative and sustainable products and solutions.

What Do We Mean by Sustainable Procurement?
Autor / Thema der Präsentation Sustainable Procurement is the process through which DT buys products and services by taking into account: Economical aspects: best value for money considerations such as price, quality, availability, functionality etc. Environmental aspects: the effects on the environment that the product and/or service has over its entire Life Cycle including end of life management. Social aspects: impacts on issues such as poverty elimination, international equity in the distribution of resources, labour conditions and human rights. Sustainable procurement is advanced procurement today. Only by equal consideration of economic, social and ecological criteria companies can cope with their growing responsibility for the society. Deutsche Telekom purchases each year goods and services for more than 20 billion €. This amount exceeds the gross net product of many countries by many times.

Problems in our Supply Chains. Central problems in our supply chains according to conducted Social Audits and NGO-reports: Autor / Thema der Präsentation Child Labour and War Financing in DRC*: in the extraction of minerals for the ICT industry, e.g. Coltan. Discrimination of women, minorities or migrants, e.g. conducting pregnancy tests before employment. The forms of discrimination are different, often related to social economic backgrounds and difficult to prove. Excessive Overtime: following the National Chinese Labour Law is the absolute exception. Partly more than 60 hours overtime a month is normal. In extreme cases overtime may exceed even 100 hours a month with only one day off. Forced Labour: e.g. forced overtime work, partly confiscation of passports, inadequate provisions for labour agencies etc. Inadequate Payment: in countries like China the regional minimum wage often does not cover the basic needs (Living wage). Partly even the minimum wage is not paid. Sometimes unreasonable deductions for food and accommodation or punitive deductions from the saleries are made. Obstruction of Workers Councils or Trade Unions: e.g. by threat, intimidation or discrimination of trade unionists and members of workers councils. Inacceptable Dormitories: partly 12 and more persons in one room, no daylight, no privac or intimacy, less than 2 sqm per person, mould on the walls, partly unacceptable and unhealthy food. Neglection of Occupational Health and Safety: no working fire extinguishers, insufficient fire drills, missing sign posting of escape routes, insufficient protection clothes (e.g. in stores), insufficient protection in handling hazardous substances. Seit 1850 haben die Alpengletscher ca. 50% ihres Volumens verloren. Die Bilder zeigen die Hohen Tauern, Großglocknerregion * Democratic Republic of Congo

Development of Sustainability within DTAG Procurement On the way to Sustainability 2.0 Autor / Thema der Präsentation Sustainability Development 2012 4 Business Strategy Sustainability 2.0 Sustainability is a winning strategy against competition All procurement decisions are systematically checked on their impact on sustainability Vision of world class CR procurement strategy and activity 2009 3 Strategic Management Approach Online-training for purchasers Stakeholder Dialogue Integration in „daily business”: Increased integration within procurement guidelines Pre-qualification SAQ Supplier selection and Supplier-scorecard Sustainability campaign 2006 2 Differentiation Sustainable Procurement Strategy Foundation of SPWG First Social Audits Initiation of E-TASC* Supplier Dialog Sustainability implemented in Procurement Guidelines and General Terms & Conditions Innovation & Product- development and opportunities 2003 1 Recognition Social Charter Suppliers are obliged to be compliant with our Social Charter Sustasinability over the last years became more and more important. (e.g. growing LoHaS segment etc.) This social development is also refelcted in the developement of procurement within Deutsche Telekom over the last years. Currently sustainability is positioned as a strategic issue within procurement. Suddicient consideration of sustainability within all steps of the procurement process is implemented also in the guiding procurement documents, including Procurement Policies & Pratices (GPP). The next logical step is the implementation of sustainability as an important business strategy to create competative advantages and to create Shareholder Value. In this all decisions on rewarding contrancts sholuld systematically be reviewed with respect to sustainability. Years * E-TASC = Electronic Tools for Accountable Supply Chains, Online Tool for Supplier Self Assessment on Sustainability Performance

Value Driver Sustainability. Significant value by sustainable supply chain management: Autor / Thema der Präsentation Market Leader by Increased Competitive Advantage Minimizing risks, incl. regulatory risks Avoiding lawsuits Reducing assurance costs Reducing production costs through innovative product specification Cost Saving Profitability Securing business models and their social acceptance Creating new business opportunities (driving innovations) Reputation and trust Supporting brand building and its values Stabilizing business Employee satisfaction Customer satisfaction Brand Value Stabilizing long term oriented investor relations Increasing DT share in sustainable funds (Socially responsible investment) Share Value Sustainability is an important building block to increase competitiveness and to ensure and increase market leadership. Sustainability reduces the cost of adverse regulative measures and the risks for costly law suits. Sustainability ensures social acceptance of our business model and increases sustainable innovations. Sustainability ensures and improves brand reputation and –value. This heplps to increase the satisfaction of customers and employees. This over all has a positvie impact on our shar price. Trustful relationships to sustainable and long term oriented investors may be build up. In this way the percentage of Deutsche Telekom shares held by sustainable investors can be increased.

Sustainable Procurement Strategy. Common approach of CR and procurement guarantees broad integration of sustainability into the procurement processes and guidelines. Autor / Thema der Präsentation Suppliers Sustainable Procurement Strategy Purchasers & Employees Strategy Sustainable Procurement Process Tools for Supplier Evaluation Sustainable Procurement Working Group (SPWG) Responsibilities Tools This chart provides an overview over the overall Sustainable Procurement Strategy: The Sustainable Procurrement Strategy is the Basis and the starting point for our activities in the area of sustainable procurement. The Sustainabale Procurement Working Group was founded as a consequence of the Sustainabale Procurement Strategy. It is a common working group of representatives from Procurement and Corporate Responsibility. The working group has the task to develop sustainabale procurement at Deutsche Telekom. The Sustainable Procurment Workinggroup is responsible for the internal and and external communication with respect to sustainable procurement and the internal communication of sustainability issues within the procurment community. The Sustainabale Procurement Process: Sustainability is targeting on each step of the supply chain: From the prequalification process over supplier selection and supplier evaluation up to supplier development. The tools for Sustainable Procurment: In this context especially the tools for risk evaluation and risk reduction have to be mentioned. Therefore we use a 3 step approach: Starting point is the supplier self assessment within our prequalification questionnaire ( For strategic important suppliers and for suppliers bein identified as “risky suppliers” (Industry, location of production, use of the Telekom brand, as e.g. Corporate Fashion etc.) we demand a more deatiled supplier self assessment via E-TASC (Electronic tools for Accountable Suspply Chains). Especially in case of serious concerns on sustainability issues in consequence of supplier self assessments, NGO reports or other suspicious information it is necessary to take the third step and to conduct a Social Audit at the premisses of our supplier. Therefore beside own audits we will additionally use 3rd party audtits by well recognized auditing companies to significantly increase an adequate risk coverage. Stakeholders: The most imoportant stakeholders with respect to Sustainable Procurement are suppliers, customers, NGOs (Non Governmental Organizations), SRIs (Sustainability Related Investors) and also the purchasers and the employees of the company. Sustainable Investors Customers & NGOs

Sustainability along the Supply Chain. Sustainability addresses all relevant sourcing/supplier management processes to avoid CR related supply chain risks and to utilize respective opportunities. Autor / Thema der Präsentation Autor / Thema der Präsentation 8 Procurement Process Sustainability Aspects Tools and Sources Avoidance of CR related Supply Chain Risks Basic Supplier CR Information Basic Supplier CR Compliance Basic Supplier CR Commitment Supplier Questionnaire Prequalification of Suppliers Sustainable Specifications Mandatory Sustainability Requirements Additional Sustainability Criteria (e.g. energy…) Provisioning of Transparency on CR-issues E-TASC Audit results Supplier- Selection CR Risk-Score CR Compliance CR Commitment Supplier-Scorecard Other sources (e.g. Media, NGO-Reports) Escalation process Supplier- Evaluation Eco-Efficiency Green Product Innovation/Joint Development Joint Marketing on “green” Products & Services Workshops with suppliers Supplier agreements on Sustainability targets Supplier Relationship and Cooperation Supplier Development Within Deutsche Telekom sustainability is implemented within all steps of the procurement process. Already within the pre-qualification process in the supplier questionnaire there is a set of questions collecting information on the sustainability performance, including questions on the comliance to our requirements and on the commitment beyond sompliance. From our strategic suppliers and from risky supppliers with respect to sustainablitity we demand additional information via E-TASC (Electronic Toolos for Accountable Supply Chains). Currently we are developing critereia for the systematic consideration of sustainablity within process of oofer evaluation and the awarding of contracts. Sustainable supplier development will grow importance in future. We expect an increasing speed of innovations and that innovations have to be accepted by the society to create a valid business case. 8

Core Elements of the Sustainable Procurement Strategy.
Autor / Thema der Präsentation The Sustainable Procurement Strategy is: an integrated part of the procurement strategy and policies fully implemented under the procurement guidelines an important criteria on supplier selection, supplier evaluation and supplier development Compliance is a must: The basic requirements stated in the Social Charter are mandatory. Standardized Supplier Self Assesments : Self Assessment Questionnaires for pre-qualification and E-TASC Standardized processes: Clear roles and responsibilities between corporate responsibility and procurement Knowledge is key: Focus on purchasers and suppliers Sustainability is a chance: Promoting of innovative solutions Core Elements of the Sustainable Procurement Strategy: Primary reference points Core issue of our Sustainable Procurement Strategy is the management of social and ecological risks in our supply chain, e.g. by encouraging the the development of sustainable products and services. The Sustainable Procurement Strategy is essential part of the overall procurement strategy and politics. Sustainability is increasingly implemented in procurement guidelines, especially in the Global Procurement Policies and Practices (GPP) and gets more and more important in terms of procurement decisions, e.g at the selection of suppliers or with repect the development of suppliers. Compliance is the basis for our Sustainable Procurement Strategy. Our basic minimum requirements are stated in our Social Charter, which includes essential internalitional agreements as the ILO cinventions or the Global Compact as far as national rules and regulations going beyond the international standards. Core elements of our Sustainable Procurement Strategy are beside that: Standardized Supplier Self Assessments including the verification of this inforrmation by on-site Social Audits of our suppliers. Standardized Processes, as e.g. the E-TASC invitation process, the Audit process or the escalation process. Capability building with respect to Corporate Responsibility for purchasers (e.g. Online Trainings Tool) as well as for suppliers (e.g. SWITCH China). Supplier Workshops to promote the chances of sustainability issues by cooperating in the development and commercialisation of innovative products and/or services.

Stakeholder Involvement is Key. How Deutsche Telekom addresses the issue of sustainable procurement? Autor / Thema der Präsentation Stakeholders Tools Targets Purchasers/ Employees Stakeholder Dialogue Day and 2009 Online training for purchasers Internal communication Internal rules and guideline Creation of awareness for sustainable procurement Increased employer reputation Suppliers Supplier Self Assessments Supplier audits Workshops with suppliers Supplier development Reduction of CR related risks Increased CR awareness of suppliers Promotion of innovations Investors Investor conferences CR-Reporting SRI Questionnaires Improvement of Social Rating Improved attractivity for sustainability-oriented investors Customers/NGOs The communication to external and internal stakeholders is extermly important to be sucessful in sustainable procurement: The purchasers have to experience the essential importance of sustainability for their daily business. Therefore beside sufficient internal rules, regulations and guidelines it is important to create awareness and commitment on sustainability issues. Therfore we implented an online trainingscourse for our purchasers. This online training so far reached around 500 empyees within the procurement function. Even suppliers are sometimes not very aware on sustainability. Therefore capability build is very important. We are very engaged in dialogue with our suppliers, e.g. when we introduce E-TASC and motivate the suppliers to use this tool to share their information with respect to their social and ecological performance with us. Beside that we also conduct workshops with our top-suppliers to dicuss sustainability issues or comon projects on the development of sustainable products and services. For Social Responsible Investors (SRIs) sustainable supply chains are also very critical. With outsourcing and global sourcing supply chain got much more complex and internal. The evaluation of the sustainabilty of our supply chains has an important impact on our social ratings. Questionnaires from rating agencies and the direct dialogue to investors at investor conferences are highly important on the investment decisions of Social Ressponsible Investors. With our new advertisment campaign on sustainability ( we actively address the issue „Sustainable Procurement“ to our external customers. The reports from Non Governmental Organizations (NGOs) are a valuable source of information to identify problems in our supply chains. We discussed the questions comming up from such reports with our suppliers and motivate them to come to sustainable solutions. 2008 we initiated our first Stakeholder Dialogue Day to bring our different stakeholders together to discuss our Sustainable Procurement Strategy and to get some input how to further implent and develope our Sustainable Procurement Strategy. Sustainability campaign Stakeholder dialogue Follow-up of NGO reports Reduction of reputation risks Creation of brand value Competitive advantages

Sustainability provides opportunities for Procurement. Sustainability drives Procurement Engineering and value based Procurement. Autor / Thema der Präsentation Autor / Thema der Präsentation 11 Supply Chain Security: Factory based sustainability approach along the supply chain helps to make bottlenecks in the supply chain transparent and to recognize possible threats of the supply chain at an early stage. (Example: Earthquake Taiwan) Cost Transparency: Sustainability helps to provide information on production chains for a better under-standing on cost structures, cost changes and recognition of chances and risks in global supply chains. Improved Productivity and Quality: Higher labour standards may help to develop especially for suppliers in low-cost countries to increase productivity and quality (Nike Example Mexico). Discussing Specifications: Internal customers partly complain on limited influence of procurement on specifications, neglecting significant saving potentials by e.g. lower energy consumption or longer life cycles. Value Creation: The value of a product is not only based on its functionality but increasingly on the way of production and recycling. The understanding of the link between procurement decisions and sales opens a new potential for value creation. Innovative Products and Services: Sustainability provides chances for procurement to use market knowledge and supplier relations to support the development of innovative products and solutions. Employer Reputation and Customer Satisfaction: Sustainablity helps to attract best talents to procurement, increasse customer satisfaction by innovative solutions and may positively influence the reputation of procurement internally and externally. Within Deutsche Telekom sustainability is implemented within all steps of the procurement process. Already within the pre-qualification process in the supplier questionnaire there is a set of questions collecting information on the sustainability performance, including questions on the comliance to our requirements and on the commitment beyond sompliance. From our strategic suppliers and from risky supppliers with respect to sustainablitity we demand additional information via E-TASC (Electronic Toolos for Accountable Supply Chains). Currently we are developing critereia for the systematic consideration of sustainablity within process of oofer evaluation and the awarding of contracts. Sustainable supplier development will grow importance in future. We expect an increasing speed of innovations and that innovations have to be accepted by the society to create a valid business case. 11

The Sustainable Procurement Working Group. The driver for sustainable procurement within Deutsche Telekom. Autor / Thema der Präsentation Ensure sufficient consideration of sustainability within procurement. Development and tracking of KPIs for sustainable procurement Promotion of sustainable procurement within Deutsche Telekom Development of standards for sustainable procurement Internal communication on sustainable procurement issues First point of contact and escalation body for sustainable procurement issues Within Deutsche Telekom Outside Deutsche Telekom External communication of sustainable procurement for suppliers, NGOs and sustainable investors To gather information on the sustainability performance of suppliers Workshops with suppliers on sustainable procurement subjects Audit and compliance monitoring Sustainable Procurement Working Group (SPWG) as joint working group of Procurement and Corporate Responsibility This chart highlights the tasks and responsibilities of the Sustainable Procurement Working Group. The group consits out of representatives from Corporate Responsibility and from Procurement. the Sustainable Procurement Working drives sustainability procurement within Deutsche Telekom. Therefore KPIs have been developed, agreed, implemented and monitored to track a target oriented deveolpment of sustainable procurement. Beside that the Sustainable Procurement Working is the central interface within the company (purchasers and employees) and to external stakeholders (suppliers, Social Responsible Investors (SRIs), Non Governmaental Organizations (NGOs) and external customers. With respect to this stakeholders a foccused internal and external communication on sustainability issues is extremly important. It should also be mentioned that the Sustainable Procurement Working is the first point of contact for purchasers on all questions and sugesstions with respect to sustainability. In case of problems with suppliers related to sustainability issues the Sustainable Procurement Working is actiong as the first level in the escalation process.

Sustainable Procurement Working Group (SPWG). Composition.
Autor / Thema der Präsentation Dr. Heinz-Gerd Peters [CR/Head of Sustainable Development & Environment] Dr. Ignacio Campino [Board Representative Sustainability & Climate Change] Antonio Veloso [CR/Expert Supply Chain] Anke Schweitzer [CPS] André Kokoska [CPS] Andreas Kröhling [Procurement Operations] N.N. [TMUK, representing NT Procurement Function ] Rainer Langenbucher [T-Home, representing IT ISS Procurement function] Brigitte Pekeler [T-Systems, representing IT HW SW Procurement function] Marcus Hülsey [TMO, representing Terminal Procurement function] Dennis Neinaber [TMNL , representing Marketing/Indirect Procurement Function]

Investments in sustainable Supply Chains pay off. Enhancing Corporate Value by Sustainable Procurement. Autor / Thema der Präsentation DT was regularly awarded by leading SRI rating agencies: Sustainable Asset Management (SAM) „Gold Class for Deutsche Telekom in SAM‘s YearBook 2010“ Oekom Research Leading rating agencies acknowledge Deutsche Telekom´s efforts within corporate sustainability. In 2008 we reached the SAM Gold Class for the first time. This avheivement was mainly driven by our good performance with respect to sustainable supply chains. For the future we aim to further increase our ratings and to be the leading telecommunication operator with respect to corporate sustainability. „Deutsche Telekom ‚Prime Investment‘ „

Sustainable Supply Chain Management at Deutsche Telekom. Result: We really have to take responsibility for our value chain. Autor / Thema der Präsentation We know our responsibilities: In 2009 Deutsche Telekom purchased goods and services from 81 countries, many of which are developing or emerging countries. The overall purchasing volume reached 20.4 billion €. Group-wide sustainable supplier management: enables the focused and systematic management of chances and risks, resulting from a worldwide network of suppliers and sub-suppliers. We are actively engaged: Deutsche Telekom influences the conditions for production at it‘s suppliers and sub-suppliers worldwide. Deutsche Telekom is actively working within international organisations for fair working conditions and high quality standards. We aim to be on the leading edge in „Sustainable Supply Chains“: We work actively on the concepts for Sustainability 2.0 within Deutsche Telekom procurement and it‘s implementation. It is our target to be recognised by our competitors, social rating agencies, NGOs and in the public as world class with respect to sustainable procurement. Growing overall importance of sustainability issues: high influence on procurement and increased involvement or procurement within sustainability issues. Sustainabilty provides many chances for procurement: It helps to create value by provising information on a better understanding and planning of our value chains. Shortly summarized: We face up the challange. We managed to build up a group wide system for the efficient and effective management of our sustainability risks related to our supply chains. There fore we successfully implemented sustainability in our processes, systems and guidelines. Deutsche Telekom shows real commitment on sustainable procurement. We use our influence worldwide to work for fair working conditions, ecological production as well as social and ecological issues to increase productivity, quality and social acceptance. Therefore we via GeSI (Global eSustainability Initiative) we look for other companies in the ICT industry to join our efforts to move forward the whole ICT-industry. With our efforts and activities we gained national and international acceptance. We know that we can not rest on our laurels. We have to increase our engagement to compete with increasing requirements. Increasing inequality of wealth and the challenge of climate change are only two examples on challenging issues we have to deal with during the next years. This illustrates why we are currently working at the development and imlemantation of Sustainability 2.0 within procurement.

Many thanks for your attention.
Autor / Thema der Präsentation Many thanks for your attention.

Escalation Process for Sustainable Procurement. Consequent escalation in case of non-compliance to sustainability requirements. Autor / Thema der Präsentation SPWG CR Request External Indication of Supplier Non-compliances Supplier is not fulfilling DT-request Supplier Decision on DTAG Request SPWG informs Procurement (Supplier Manager) Meeting (SPWG, Procurement, Supplier) Full support on DT request -> „supportive“ Fullfiling DT request -> „compliant“ Committment from supplier, incl. statement and/or action plan if required GCL*/FHoP** to decide on consequences and measurement plan Acceptable solution SAP System Review SPWG Supplier still refuses DT request -> „not asupportive“ SAP marking of suppliers being not supportive or compliant to DTAG CR requests Not accepted In the context of an operating system to manage sustainability within procurement processes play an essential role. This chart presents our current standard escalation process. The need to escalate an issue can come from internal or external sources. The sustainable Procurement Working Group (SPWG) acts as the first point of contact for all escalations. (E.g.: NGO report, non-compliance to our sustainability requirements, e.g. unwillingness to participate in E-TASC) Within the process the supplier will be asked to give a statement on the escalated issue and (if aplicable) to develope a corrective action plan. Therefore Sourcing and the Sustainable Procurement Working Group work together hand in hand. If it is not possible to find a commonly accepted solution with the supplier, the issue has to be escalated up to the procurement management. There additional consequences and/or sanctions against the supplier will be discussed and decided. Escalation to GCL/FHoP Acceptable solution Escalation up to CPO*** Level Supplier still refuses DT request -> „not alligned“ *Global category leader **Function head of procurement ***Chief procurement officer

E-TASC Invitation Process Deutsche Telekom.
Autor / Thema der Präsentation Standard Escalation-Process Naming of “non-compliant” suppliers to procurement Supplier E-TASC Invitation DT Master Supplier List of suppliers to be addressed by E-TASC Information of suppliers on E-TASC requirements and verification of contact data. Provisioning of feedback. DT Supplier Manager SPWG Status Report on the E-TASC Invitation Process, provided within TPC Corporate Admin E-TASC Another important process is the invitationprocess for the participation at our sustainability tool E-TASC. Important in this context is that the purchasers, who are the direct interfaces towards our supppliers, are more involved than before. The purchasers have to communicate our requirements towards our suppliers and to take care that the invitations will be sent to the right points of contact on supplier side.

Online Trainings Tool for Sustainable Procurement. We already qualifyed 500 employees within procurement. Autor / Thema der Präsentation This slide provides the entrance page to the Deutsche Telekom Online Training „Sustainable Procurement“. This online training was especially developed for purchasers. It needs around 90 minutes to participate in the training. By answering 18 questions on the conntext of this training course the purchasers are able to test their knowledge out of 18 points are necessary to get a certificate, which they can print out by their own. The participation in the training course is absolutely voluntarily, however arround 500 purchasers participated in the training and more of 90% managed to get the certificate. In the last quarter 2009 there will be an adjusted new version of the online training course.

E-TASC: The Sustainability Tool for the ICT Industry. A common web-based supplier sustainability self-assessment tool Autor / Thema der Präsentation At this chart you can see the E-TASC homepage in the internet ( E-TASC is the central sustainability portal/tool for the whole ICT-industry, supported by the major industry associations GeSI (Global eSustainability Initiative) and the EICC (Electronics Industry Citizenship Coalition). The basis of the system is a web based self assessment of suppliers with respect to sustainability.

E-TASC: Advantages for DT and its Suppliers. Reduced Transaction Costs by Standardisation. Autor / Thema der Präsentation CR risks are identified at an early stage and therefore any detected risk can be properly managed and action plans can be implemented. One standardized questionnaire for the ICT industry makes comparison of suppliers possible and reduces the transaction costs. The system allows an automated risk evaluation based on the answers provided by the supplier in the SAQ The ICT industry wide approach helps to share the costs to develop and to run a sustainability system. Benefits for Deutsche Telekom Suppliers are able to demonstrate their own Corporate Responsibility status to other clients/interested parties in a secure manner. Information held in the system is owned by the respective company and can be made available to other companies, reducing requests for other lengthy prequalification. “One” standard self assessment questionnaire in the future used by all the ICT industry instead of individual company self assessment questionnaires will reduce transaction costs. Suppliers can benefit from best practice examples provided by the system. Benefits for our Suppliers Full Subscriber: 1,000 – 30,000 US-$, depending on revenues. All facilities are covered Partial Subscriber: 470 $ for each facility. 2 Membership Options The main advatage of the industry wide E-TASC approach is the readuction of transactional costs on the buyers and on the suppliers side. If every buyer deveolps and distributes own questionnaires to the main suppliers this will result in additional costs and efforts for all participants. The standardized questionnaire drives transparency and ensures comparability of results. It is important in the context of E-TASC, that the supplier is fully guaranteed the ownership of the own data at every time. Only buyers with dedicated permission of the supplier are able to view the data in the system. To participate in E-TASC suppliers can decide for full or partial membership. The costs to participate in the system are depenend on the choosen membership option. The fee for full membership is related to the annual revenues. It starts with 1,000 US$ a year for small enterprises and goes up to a maximum fee of 30,000 US$ for companies with annual revenues of more than 10 billion US$. Full members are able to invite suppliers to the system and to register as many facilities as they want. Partial members pay 470 US$ every year for each facility.

Process for Auditing of “High Risk” Suppliers.
Autor / Thema der Präsentation Evidence for high risk E-TASC Business Audit Preparation DT Audit Team: Briefing of procurement and suppliers Risk based Audit Planning Process Conducting the Audit DT Audit Team: Conducting Audit, Pre-Assessment Report SPWG Evaluation, decision on conducting a social audit of the supplier Social Audit (Process should not exceed 3 months) - Draft Audit Report DT Audit Team: Findings & Recommendations No Audit Feedback of the Supplier Supplier: Feedback and suggestion for corrective action plan Intranet (TPC) Provisioning of Audit Reports and corrective action plans for purchasers Corrective Action Plan DT Audit Team /Supplier: Agreement on final Audit report and corrective actions The last proces presented here is the auditing process. It is important to recognize that the Sustainable Procurement Working Group is the relevant decison body to decide to conduct a Social Audit. The audit process follows well recognized standards. On site there will be a Pre-Assessment Report including a regocnition of the main audit findings as well as a first commitment on corrective actions. The audit can only be closed if all agreed corrective actions meassures are fully implementated. In some cases it is useful to verify the implemenataion of the corrective actions by a follow-up auudit. DT Audit Team Follow-up and verification of implementation of corrective actions Closing of the audit Master Supplier List

Social Charter for the Deutsche Telekom Group. We expect Commitment to Social Standards and Principles. Autor / Thema der Präsentation Acknowledges and respects the cultural, social, political and judicial diversity of all nations and societies Recognizes the basic right of freedom of association Forbids all forms of forced labour Seeks to eliminate exploitive child labour Rejects all forms of discrimination and promotes equal opportunities and diversity of employees Respects the right to adequate remuneration and work contracts Adheres to the different countries’ national regulations on working hours and regular paid holiday Employee training in order to ensure and sustain a high level of performance and to guarantee high-quality services Compliance with minimum standards for health and safety protection Primary reference points Here you see the basic social standards and principles out of our Social Charter: No child- or forced labour Freedom of association/collective bargaining Non discrimination & diversity Labour contracts and adequate payment including holidays Einhaltung von nationalen und internationalen Begrenzungen der Arbeitszeit Employee qualification Occupational health and saftey The Social Charter also includes international agreements and standards as e.g. the ILO conventions or the Global Compact. National rules and regulations going beyond this standard are also to be followed. We expect from our suppliers that they not only comply to our Social Charter but also to oblige their suppliers to comply with our basic minimum standards.

Supplier Evaluation: The Supplier Scorecard. Structure of the evaluation criteria. (under development) Autor / Thema der Präsentation Dimensions for Supplier Evaluation Commercials & Contracts 1 Logistics 2 Quality 3 Innovation & Technology 4 Key Financials 5 Sustainability 6 Price level & market conformity Contract negotiations Rfx quality and Rfx process Communication & transparency Supplier-performance Logistic processes Management of invoices Customer satisfaction & services Incident & management of complaints Penalties Technology & proactivity Innovation & creativity Strategic importance and collaboration tbd Corporate responsibility (CR) Compliance Corporate Responsibility (CR) Commitment Sustainability Risk according to E-TASC score Key Per-formance Indicators (KPI) Procurement Risk Assessment under development Pricing Price position within competition ... Delivery in time Completeness of delivery ... Management Escalations Quality assurance ... International standards Financial KPIs Energy & resource efficiency Child labour avoidance KPI Attributes (Examples) Internal View External View Internal & External This chart shows the overall construction of the supplier evaluation via supplier scorecards. Sustainability is one out of six different blocks of criteria. Operation mode Top suppliers should be evaluated two times a year Evaluation by Procurement (Commercials & Contracts, Logistics) and IT (Quality, Technology & Innovation). Core Financials, Evaluation by Procurement Risk Management. Sustainability, Evaluation by the Sustainable Procurement Working Group (SPWG) Konzernentwicklung 24

Supplier Evaluation. Sustainability is one out of six criteria within the Supplier Scorecard. Autor / Thema der Präsentation Autor / Thema der Präsentation 25 Internal and external Sources: Including Supplier Self Assessments, E-TASC (if available), Audit Reports, NGO Reports, Press Releases, Rating Agencies, other Sources External Sources Supplier Questionaire, E-TASC Score Freely chosen employment Child labour avoidance Working hours Wages & benefits Human right treatment Non-discrimination Freedom of association Occupational health and safety Emergency readiness Avoidance of physical demanding work Safety of working equipment Dormitories & Canteens Pollution and waste prevention Energy and resource efficiency Usage of restricted and prohibited substances Business ethics Mandatory CR certificates 50% Weight CR-Compliance 25% Weight CR-Commitment Proactive eco efficiency Carbon footprint Sustainable product development Social ratings CR-approach CR certificates (Non mandatory) Common CR Initiatives Cooperation with NGOs Based on the Supplier Self Assessment via E-TASC as long as this information is available 25% Weight E-TASC Risk Score (if available) For the evaluation of sustainability compliance plays a major role. Compliance means that suppliers have to comply to our minimum standards stated in our social charter. Serious offenses against our basic minimum requirements may have serious consequences. In the worst case the business relationship has to be terminated imediately. Beside compliance it is important to find business partners showing commitment to sustainability beyond compliance. We are looking for partners which are working proactively on sustainablity issues. This may be done by additional certificates as SA8000, joint workshops on CR issues, innovative product development The third and last dimension of our sustainability evaluation is the E-TASC score as a kind of measurement on the sustainability performance of the supplier. While the first two criteria have to be evaluated by the members of the Sustainable Working Group by their own judgement on available internal and external sustainability information (sofft facts), the E-TASC score will be directly taken out of the system (hard fact). 25

Sustainable Procurement Processes Sustainability criteria for bid evaluation Autor / Thema der Präsentation Supplier related Criteria Supplier based risk score (E-TASC-Score) Labour standards at suppliers (SA8000, OHSAS18001) Ecological commitment of suppliers (IT, Logistics, Networks, Terminals) Product/Service related Criteria Marketing & Indirect Energy consumption Carbon Footprint (e.g. Logistics) Use of natural resources (e.g. paper) Employee qualification (manpower) Social impact (e.g. marketing/content) Child protection (Content) Hazardous substances (LCC) Terminals (Com & IT) Energy consumption/CO2-Balance Environmental packaging Durability & recyclability Extendability Used materials Ergonomic aspects Radiation (SAR) Data protection Disabled friendliness Networks Energy consumption Carbon Footprint Usage of natural resources Hazardous substances Recyclability

Sustainable Procurement at Deutsche Telekom Group.

Similar presentations

Presentation on theme: "Sustainable Procurement at Deutsche Telekom Group."— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

Sustainable Procurement at Deutsche Telekom Group.

Similar presentations

Presentation on theme: "Sustainable Procurement at Deutsche Telekom Group."— Presentation transcript:

Similar presentations

About project

Feedback