2013 Corporate Sustainability report
Be More Sustainable_ Contents 1_ 3_ 4_ 5_ 6_ 7_ 8_ 04 Letter from About Our Responsible People Society Planet Annexes the Chairman this report approach management 120 Privacy: an open 144 The key role 174 Green ICT and 200 Telefónica 08 Principles for the 28 Corporate 44 Ethics and and secure Internet of telcos in environment Sustainability 2013 Sustainability Responsibility and compliance for all constructing the indicators report Sustainability as part digital world 176 Environmental of the Telefónica 48 Customer satisfaction management 10 Report boundary vision 126 Freedom of 202 Awards and and structure 50 Labour practices expression 148 Innovation in acknowledgements 32 Corporate 50 Staff Telefónica 182 Energy and climate Responsibility 130 ICTs for children change 204 GRI references 54 Working environment and Sustainability 150 Digital inclusion and commitment 134 More accessible structure in 186 Electromagnetic 224 Compliance with services Telefónica, S.A. 58 Training and talent fields Global Compact _ management 154 Response to 2 138 Digital education emergency 34 Materiality: focus on 64 Attracting and retaining 226 Review and external situations the key issues talent 188 Green ICT services validation of the Driver of Progress 140 e-Health 68 Fair pay and Report 36 Stakeholder 156 Volunteers 192 Smart Sustainable 16 Our contribution to performance engagement recognition Cities 230 Glossary of terms the communities: 72 Freedom of association 158 Social action at social cash flow 234 Best practices and social dialogue Telefónica 194 Global summary 20 Contribution 74 Health and safety environmental to the public 162 Support for leadership 236 Thanks administrations 78 Management of entrepreneurship diversity 22 Universal service 162 Open Future
24 Telefónica as a 82 Sustainability in the 164 Wayra responsible investor supply chain 166 Talentum
96 Responsible 168 Campus Party mineral trade 170 Think Big
104 Human Rights 110 Respect for The 2013 Telefónica Annual Report is made up of the Integrated report, Annual corporate governance report, Financial report and the Corporate children’s rights Sustainability report. 114 Commitment To access any of the Annual reports, click on the corresponding links below.
2013 Integrated report 2013 Annual corporate governance report 2013 Financial report 2013 Corporate Sustainability report Annual report on the remuneration of Directors
Be More Be More Be More Be More Digital_ transparent_ Solid_ Sustainable_ Integrated report2013 | Integrated Corporate Sustainability report 2013 | Corporate Annual corporate governance report governance 2013 | Annual corporate / report of Directors on the remuneration
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Integrated Annual Financial Corporate report corporate report Sustainability governance report report The 2013 Telefónica Annual Report is available in an online version for smartphone and tablet. Telefónica Corporate Sustainability report 2013
Letter from the Chairman_ César Alierta Izuel Executive Chairman
Dear friends, With regard to the economic impact, which in Register by the Ethibel Sustainability index; and, Once again I have the pleasure of writing to you terms of sustainability has to do above all with for the twelfth year in a row, it forms part of the to present the Annual Corporate Sustainability the way in which we obtain our income and FTSE4Good ranking. And as a consequence of Report, which recounts our activities in the carry out our activities, we should mention the all this, Telefónica was acknowledged in 2013 as areas of risk management and leverage of achievements of our Business Principles Office the most admired European telecommunications opportunities, and our effective management of during 2013, the advances in compliance with company, and second in the world, by Fortune the risks inherent to economic, environmental the principles of sustainability in our chain of magazine. and social development. suppliers, and the progress we have made on privacy and data protection. I would like to conclude by reminding you This Report, which Telefónica has been publishing that our Company is currently positioned as a since 2004, aims to respond to the concerns Relating to the social impact, in this Sustainability fundamental actor in the sector. Being able to about information and transparency that the Report 2013, we have emphasised diversity count on the recognised team of professionals distinct groups with a stake in our activities may management in the workforce, the projects that we have assures me that I can say to you have. Similarly, it entails compliance ahead of of digital inclusion and social innovation, that Telefónica is going to play an ever more time with European Union Directive 2013/34 and also the important schemes to boost decisive role in the digital world, because we are with respect to “disclosure of non-financial and entrepreneurship in which we are engaged. convinced that technology ought to be within diversity information by certain large companies reach of all individuals, companies and public and groups”. In addition, we would like it to On the environmental side, you will find complete authorities, so that they can BE MORE. answer demands for information that are being information about our environment policy in made in some of the countries in which we this Report. We continue to reduce our energy I would like to express my thanks for the support
operate, under the format “inform or explain”. consumption and are moving forward noticeably of our stakeholders who, with their opinions and with electronic billing as an alternative to paper suggestions, have helped us to move forward in We at Telefónica are convinced that corporate consumption, and in addition our “green” services achieving our vision. sustainability and transparency are long-term have made important advances which are already
sources of competitiveness and progress. Not being translated into income for the Company. Many thanks, only do these help to underscore our legitimacy to operate in the different countries in which As you will be able to see, sustainability is being we are present, but they also have positive incorporated gradually into the value chain “ repercussions on the management of our of Telefónica. Indeed, we are collaborating We at Telefónica are business, and therefore on our results. Moreover, actively with all the interest groups which ICT, based on connectivity, are leading the have a relationship with our Company, and convinced that corporate processes of transformation of our society and we are offering exhaustive information on the they are an essential factor in the creation of developments in the most relevant subjects, our sustainability and employment, economic growth, saving energy indicators and our sustainability policies in terms and transparency, as is shown by the digital of standard publication criteria like the GRI and César Alierta Izuel transparency are long-term agendas of the most important public and private the UN Global Compact. Executive Chairman bodies in the world. sources of competitiveness All this means that in 2013, our Company has In this Report you will be able to see the progress been included in the worldwide Dow Jones “ and progress that Telefónica has made during the financial year Sustainability Index; it was fifth in the Carbon along the three basic dimensions of sustainability: Disclosure Project and Sustainalytics rankings; economic, social and environmental. it was recognised in the Excellence Investment
4 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 5 Principles for the 2013 Sustainability report_ 1.
Report boundary About this and structure_ report_ Telefónica Corporate Sustainability report 2013
About this report Principles for the 2013 Sustainability report_
Telefónica presents the Corporate Sustainability Report 2013, a document that covers the progress made during the reporting period in economic, environmental and social Similarly, it also includes the results of research ➜ Comparability. The Report and the information terms, as well as in human rights, anticorruption policies and diversity management carried out by the Company among its distinct contained within can be compared on a stakeholders to learn which aspects could have year-to-year basis through tables and charts, a substantial influence on their evaluations and thus highlighting any significant variations decisions. Both external and internal factors are in the boundary and scope. In addition, the Telefonica is one of the world’s leading integrated information in this report has been subjected to taken into consideration, as well as other facets Sustainability website of Telefónica describes telecom solutions providers in the areas of varius levels of external reviews. highlighted among companies of the sector. the ATLAS RC platform, which facilitates communication, information and entertainment, comparabilty of the indicators considered most with operative presence in Europe and Latin The Report follows the principles of the Global ➜ Stakeholder inclusivity. This Report is relevant in managing corporate responsibility at America. The Company is present in 24 countries Reporting Initiative (GRI) and AA1000 (APS), addressed to the distinct stakeholders of the Telefónica. and has a customer base that exceeds 323 million. the most reliable and widely used standards in Company and has been compiled bearing in mind It was constituted in Spain in 1924, is totally Sustainability and Corporate Social Responsibility the aspects most important to them in their ➜ Accuracy. The Report information is sufficiently private and has over 1.5 million direct shareholders. reports. This methodology is used to facilitate relationship with our business. By stakeholders, accurate and detailed (data, sources, Telefónica is quoted on the continuous markets of comprehension, comparability and maximum we understand those entities or individuals who measurement techniques, bases for calculation, the Spanish stock exchanges of Madrid, Barcelona, transparency for our stakeholders. may be affected significantly by the activity, underlying assumptions and estimates) for our Bilbao and Valencia, as well as in London, New products or services of Telefónica, as well as stakeholders to assess Telefónica’s performance. York, Lima and Buenos Aires. At the end of April, This book has been drawn up following the general those groups that could affect the capacity of The data published are contrasted with an the Group was the sixth biggest in the world in principles G3.1 established by the Global Reporting Telefónica to carry out its strategy and fulfil its independent report by Ernst & Young. the telecommunications sector by stock market Initiative (GRI), and a guide to the progress already objectives. The stakeholders considered were: capitalization, the largest integrated operator made towards the new G4 standard is included as shareholders and investors, customers, suppliers ➜ Regularity. This Report is presented with in Europe and twentieth in the Eurostoxx 50 an annex. and collaborating companies, employees, sufficient regularity for stakeholders to be able to ranking, which groups the largest companies in the trade bodies, social NGOs, public authorities take well-informed decisions. eurozone. This chapter explains how these standards have and regulators, the media and sustainability been applied and gives details of those that professionals. ➜ Clarity. The information is expressed in a Telefónica boasts one of the most international determine the content and quality, which ensure comprehensible and accessible manner for profiles in its sector, generating more than 76% of a balanced and reasonable presentation of the ➜ Sustainability context. This Report addresses Telefónica’s stakeholders. its business outside its domestic market. Movistar organisation’s performance. The entire process the subjects covered from a perspective of (for Spain and Latin America, except Brazil), Vivo has been followed taking both the experience and sustainability, in the sense of how the Company ➜ Reliability and verification. The information (in Brazil) and O2 (in the United Kingdom, Ireland, intentions of Telefónica into account, as well as contributes to helping others to achieve greater and processes used in the preparation of this Germany, the Czech Republic and Slovakia) are the utility for its stakeholder groups. Likewise, the development along economic, social and Report were gathered, recorded, compiled, the principal brands under which its products and verification was conducted by Ernst & Young under environmental dimensions at local, regional and analysed and presented for external validation. services are offered. the framework defined by the standard AA1000AS global levels, within its business strategy and in (2008), whose values seek “to guarantee the quality accordance with its policy on managing risks and According to AA1000 (APS) For the compilation of the qualitative and of the Sustainability Report of the organisation opportunities. quantitative information, internal and external and the processes, systems and competencies ➜ Inclusivity. This refers to the participation of tools and programmes have been used, especially which underlie accomplishment throughout the ➜ Comprehensiveness. The indicators and our stakeholders in developing and achieving eSIF for matters related to human resources and organisation”. material aspects and the definition of the an accountable and strategic response to Credit 360 for matters of customers, community scope of this Report are sufficient to reflect the sustainability. and the environment. This process has permitted According to the Global Reporting significant social, economic and environmental self-diagnosis and verification of each datum from Initiative (GRI) impacts. They also allow stakeholder groups ➜ Relevance. This is how Telefónica has its department of origin, as well as ensuring its to evaluate the Group’s performance in the determined the importance of each issue for traceability, accuracy and reliability at different With regard to the content reporting period 2013. stakeholders. levels of aggregation. All the information published has in turn passed through internal processes ➜ Materiality. The information contained in With regard to the quality ➜ Responsiveness. This is the reaction of of checking and verification, both internal the Report covers aspects and indicators that Telefónica to the demands of its stakeholders, as (Management Control/CFO in some countries reflect the significant social, environmental and ➜ Balance. The Report reflects the positive translated into the milestones and challenges for and the corporate Environment and Corporate economic impacts of Telefónica, in accordance and negative aspects of the organisation’s the Company in terms of sustainability. Sustainability Department). Additionally, the with its business strategy and development, performance so as to enable a reasonable and its management of risks and opportunities. assessment of overall performance.
8 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 9 Telefónica Corporate Sustainability report 2013
About this Report Report boundary and structure_
The data that appear in this Report, published annually, describe the evolution of Grupo Telefónica in terms of corporate sustainability
To compile this publication, Telefónica has an have decided that the consolidation perimeter for online system to coordinate and consolidate information relating to our operations included the information received from each country in this Report will refer only to telecoms service for each of the qualitative and quantitative provision, so as to retain the materiality of the indicators. This mechanism allows analysis of information and make it more comparable with each of the Company’s countries of operation in other companies of our sector. In any case, all a comparable, weighted and measurable way and information relating to human resources will be the use of these data as a management tool. consolidated for all Group companies, including the less material ones. The Corporate Sustainability report describes the scope of the operations of the Group with During 2013, the sales of 40% of the assets in clarity. Apart from this publication, Telefónica Central America and 100% of those in Ireland also publishes local information on sustainability and the Czech Republic were announced. With in its most material markets: Argentina, Brazil, respect to Central America, the sale of the said Chile, Colombia, Ecuador, Mexico, Central shares package does not entail the complete America, Peru and Venezuela. In addition to the de-consolidation of the companies, and so we are local publications, a complete breakdown of all maintaining the region within the consolidation the corporate data by country is presented on the perimeter of the sustainability information. platform http://Atlas.telefonica.com Regarding Ireland and the Czech Republic, while the sale has been announced, this is pending Telefónica, S.A. is basically divided into four large regulatory approval and the assets remained operations departments from the point of view of consolidated for financial purposes during the serving its markets: Telefónica Spain, Telefónica whole year. Thus we have decided to retain rest of Europe, Telefónica Brazil and Telefónica them within the consolidation perimeter of this rest of Latin America. Report, to make the information comparable to earlier years and allow the rates to be derived This is why we present the consolidated automatically from the relationship with other information for many of the indicators broken financial factors which have included these assets down in this way. throughout the year, both in the Profit and Loss Account and the Balance. Although within Telefónica, S.A. there are some small companies whose activity does The complete list of all companies that make up not fit neatly into these categories, they are Telefónica Group has been published in Annex VI: not of sufficient size to be considered material, Principal companies of Telefónica Group from the constituting only a small part of the Group by Financial Report that accompanies the present revenue, equity and workforce. Therefore, we Report and may be found on the corporate website.
Importance of Telefónica’s core businesses in the perimeter of the Company
Million € % of total Staff % of total T. Europe + T. Latin America 56,033 98.2% 107,742 85.02% Rest of companies 1,028 1.8% 18,988 14.98%
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Consolidation parameter by chapter Core local Other Corporate By category, the origin of the information by country and line of business. This chapter businesses affiliates centres presented herein is as follows: includes the whole economic perimeter of the Our contribution to the communities: social cash flow Telefónica Group. It is important to emphasise Contribution to the public administrations ➜ Corporate Governance and shareholders. This the difference between the data for provisioning Driver of progress comes from the same sources that compiled the in the aggregated accounts of the financial Universal Service information included in the Annual Corporate statements (according to the criterion of accrual Telefónica as a responsible investor Governance Report 2013. and the consolidated accounting perimeter of Corporate responsibility and sustainability, Telefónica S.A.) and those for purchases allocated as part of the Telefónica vision ➜ Economic and financial information:This used in various sections of this Report, which Corporate responsibility and sustainability structure inTelefónica, S.A. comes from the same sources that compiled refers to the purchases approved in the period, Our approach the information included in the Financial Report independently of the criteria for accounting and Materiality: focus on the key issues 2013, audited by Ernst & Young. periodicity applicable to the expenditure. Stakeholder engagement Ethics and compliance ➜ Innovation. This is consolidated through the ➜ E-inclusion This information is from the quality corporate innovation department of Telefónica control, operations and regulatory systems of Customer satisfaction Digital, in collaboration with Telefónica R&D Telefónica Latin America, Telefónica Europe, Staff and Telefónica Global. The sources of the data Telefónica Digital and Fundación Telefónica, in these chapters are the purchasing systems as well as from the Social Innovation Reports Working environment and commitment and are consolidated without application of any published by the Company’s CSR Department. Training and talent management criterion of proportionality. Labour practices Attracting and retaining talent ➜ Social action. The information is derived from Responsible Fair pay and performance recognition ➜ Customers. This comes from the Telefónica the systems of management control and the management quality control systems and those of the patronage committees of Fundación Telefónica, Freedom of association and social dialogue operations of Telefónica Latin America and ATAM and Telefónica S.A. and it is integrated with Health and safety Telefónica Europe. The total number of accesses LBG validation in a single digital platform. of the Company need not coincide with the sum Management of diversity of the country-by-country accesses because for ➜ Exchange rates. All the information in this Sustainability in the supply chain reasons of uniformity the corporate Management Report is expressed in real euros, except where Respect for children’s rights Control Department standardises some reckoning the contrary is stated. The exchange rates are Human rights criteria for accesses. The standardisation criteria the mean annual rates for each period and Commitment are given in the corresponding chapter. correspond with those used in all the financial Privacy: an open and secure Internet for all statements published by the Company (balance, Freedom of expression ➜ Employees. The numbers come from the HR individual and consolidated profit and loss ICTs for children management systems. This Report uses the accounts), so as to ease understanding of the People concept of ‘person’ as opposed to the term overall relationship between financial and non- More accessible services ‘employee’ usually employed in financial financial variables. Digital education reports. In those cases in which aggregated information is given, the number of employees Exceptions to the perimeter e-Health is used as factor of proportionality. The section The data of some operators is not included when The key role of telcos in constructng the digital world dedicated to this includes the entire economic the percentage held by the Company is well Innovation at Telefónica perimeter of Telefónica Group, except in the below 50%. chapter on Employee Health and Safety, where Digital inclusion the rates reported only relate to the Group’s ➜ China Unicom: Telefónica has a strategic Response to emergency situations telecoms businesses for easier comparison shareholding of 5.01%. Volunteers with other companies of the sector, because circumstances and legislation specific to the ➜ Telecom Italia: Telefónica has a strategic Society Social action at Telefónica sector are envisaged in compilation (for instance, shareholding of 10.50%. Open future occupational diseases). Wayra Throughout this report there are links to further Support for Talentum ➜ Environment and climate change. The information, which provide more detail on certain entrepreneurship information comes from the departments of matters covered herein. However, the information Campus Party environment and operations in each country in these links is not an integral part of this Report. Think Big through online questionnaires and other computer support. The information is aggregated For a deeper understanding on matters of Green ICT and environment by simple summation and, in the case of climate corporate governance and financial performance Environmental management in Telefónica change, the emissions factors of the GHG of Telefónica, this Report refers to some part of Energy and climate change Protocol are taken into account. the Corporate Governance Report 2013 and the Financial Report 2013, supplementing the Annual Planet Electromagnetic fields ➜ Suppliers. Derived from the contract adjudication Report of Telefónica 2013. Green ICT services system of the purchasing departments. The Sustainable Smart Cities information has been consolidated without using any factor of proportionality, and is broken down Environmental and global leadership
12 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 13 2. Driver of
Our contribution to Contributions Universal Service_ Telefónica as a the communities: to the public responsible investor_ social cash flow_ administrations_ progress_ Telefónica Corporate Sustainability report 2013 Economic dimension
Driver of Progress Others Suppliers(1) Public Authorities Divestments €50 M n.s. €32,992 M €14,060 M Our contribution to €870M -9% 1.6% -68.8% Spain Rest of 0.2% Rest of the communities: Financial Latam Latam Spain Entities 33.9% 27% 24% 35.6% Rest of social cash flow_ Europe 21.7% Rest of Telefónica aims to be an economic, social and Europe technological development driver Tangibles and Brazil 10% Intangibles 26.0% Brazil 64.4% 39%
Despite the return to organic growth or revenue obtained in 2013, the effect of the decline of exchange rates for Latin American currencies against the euro Investment has resulted in reduction reported revenues by 8.5%. This, along with the smaller divestments during the financial year (-68.8% compared to the previous €9,395 M year, during which there were divestitures in the long term investments of China Unicom and Atento), has -0.7% resulted in a smaller presence of the Company in the Total Total Spain global economy when compared to the previous year Rest of 16.3% (-11.1%). Latam inflows outflows 33.2% In this way, the value which has been distributed by Rest of Telefonica in 2013 has fallen for all reference investors Europe (stakeholders), except for public administrations (for €70,069 M €70,069 M 24.7% higher taxation, both at the part of taxes collected as part of the input taxes ) and financial institutions, as -11.1% -11.1% Brazil a result of negative net exchange differences, since 24.7% the effective cost of debt in the last twelve months, excluding exchange differences, stood at 5.34%, 3 bp below December 2012. Employees €6,690M Receivables from operations -13.2% €69,149 M Spain -9% Rest of Customers 3.3% Latam Spain 12.9% 38.7%
Customers Customers Rest Shareholders(2) Rest of Rest of Latam Rest of Europe Europe 37.6% 18.6% (Contains financial expenses, Brazil 0.2% fluctuations in exchange rates, €2,559 M 8.5% transactions involving treasury Customers shares, charges from holdings, -2.2% Brazil 28.7% etc.)
Note: The information on this graph is calculated on the basis of payments and takes into account the scope of consolidation of the consolidated statements of cash flows for the financial years ending on December 31. €4,697 M (1) Includes all providers for operating expenses, including interconnection and operating leasing. (2) Includes both dividends and capital increases. -46.9%
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Contribution to local progress Revenue Supplies Salaries Taxes Investment Contribution to local progress Revenue Supplies Salaries Taxes Investment All figures are expressed in millions of euros. All figures are expressed in millions of euros
Economic impact Revenue/GDP (%) Amounts Economic impact Revenue/GDP (%) Amounts
Argentina 2013 Ireland 2013
Staff 17,139 Staff 967 Revenue 3,871.6 Certified suppliers 1,298 Revenue Certified suppliers 14 1.1% 538.2 0.3% Payments % local purchases 88.1% Payments % local purchases 99.4% 971.4 723.3 1,195.0 574.0 Accesses (thousands) 26,650.7 156.7 63.1 76.6 56.0 Accesses (thousands) 1,552.0
Brazil 2013 Mexico 2013
Staff 20,878 Staff 2,969 Revenue 12,378.3 Certified suppliers 2,945 Revenue Certified suppliers 668 0.7% 1,613.1 0.2% Payments % local purchases 98.37% Payments % local purchases 94.7% 3,098.9 1,160.0 5,419.7 2,127.0 Accesses (thousands) 92,748.9 712.0 134.3 95.1 242.0 Accesses (thousands) 21,891.7
Chile 2013 Peru 2013
Staff 4,911 Staff 9,824 Revenue 2,477.9 Certified suppliers 1,011 Revenue Certified suppliers 1,102 1.2% 2,499.1 1.7% Payments % local purchases 78.9% Payments % local purchases 76.4% 785.1 245.9 351.0 488.0 Accesses (thousands) 13,630.2 627.9 335.2 599.0 479.0 Accesses (thousands) 20,898.0
Colombia 2013 Spain 2013
Staff 3,613 Staff 34,604 Revenue 1,689.7 Certified suppliers 547 Revenue Certified suppliers 2,065 0.6% 13,143.4 1.3% Payments % local purchases 72.8% Payments % local purchases 91.9% 462.6 130.6 331.6 457.0 Accesses (thousands) 14,782.0 2,818.0 2,540.8 3,443.5 1,529.0 Accesses (thousands) 41,653.6
Czech Republic+Slovakia 2013 United Kingdom 2013
Staff 6,011 Staff 7,833 Revenue 1,787.3 Certified suppliers 191 Revenue Certified suppliers 343 1.2% 6,651.7 0.4% Payments % local purchases 92.7% Payments % local purchases 73.3% 553.7 218.8 357.1 218.0 Accesses (thousands) 9,341.7 3,322.8 657.7 363.0 1,385.0 Accesses (thousands) 23,906.6
Ecuador 2013 Uruguay 2013
Staff 1,365 Staff 408 Revenue 489.9 Certified suppliers 340 Revenue Certified suppliers 329 0.9% 256.2 0.7% Payments % local purchases 69.9% Payments % local purchases 47.7% 130.2 51.4 105.2 94.0 Accesses (thousands) 5,151.3 69.0 17.7 57.8 46.0 Accesses (thousands) 1,843.9
Germany 2013 Venezuela+Central America 2013
Staff 5,735 Staff 8,826 Revenue 5,154.9 Certified suppliers 492 Revenue Certified suppliers 1,640 0.2% 4,228.0 1.1% Payments % local purchases 65.2% Payments % local purchases 94.4% 1,922.6 433.2 625.0 666.0 Accesses (thousands) 25,166.9 1,169.0 390.4 995.9 739.0 Accesses (thousands) 23,491.6
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Driver of Progress Distribution of taxes paid by Contribution to the public geographical areas Breakdown of the total tax contribution in the world Taxes borne (1) Taxes collected (2) administrations_ Thousand euros Thousand euros Rest Taxes on Taxes on propriety Taxes on Taxes on of Europe products and profits 11,308 profits A total of 24.6 euros out of every 100 that Telefónica collects 10% services 588,621 1,524,850 1,805,801 Brazil Taxes overall is paid in taxes associated to 39% employment 940,794 Rest of Latam 14,060 M€ 4,792 M€ 9,267 M€ 27%
Spain Taxes associated to Taxes on propriety Taxes on products and 24% employment 465,433 services 996,836 7,726,777
Breakdown of Telefónica’s global tax contribution Thousand euros Country Taxes borne(1) Taxes collected(2) Total contribution(3) Telefónica makes quantifiable economic and payments are not included due to their different Corporate Income Brazil 1,197,612 4.222,062 5,419,674 social contributions by paying taxes to the classification and accounting treatment. Taxes accounted authorities of the different countries where it Spain 1,094,284 2,349,171 3,443,455 for 38% of borne operates. The countries where tax payments are Taxes on profits represent 38% of the total Argentina 507,294 687,723 1,195,017 largest are precisely the jurisdictions in which tax borne. Taxes on goods and services, which Central America 774,087 221,836 995,922 Telefónica obtains its main income, namely Brazil, are mostly special levies on the telecoms tax, while 32% Germany 170,834 454,200 625,034 Spain and Argentina. sector, made up 32%, and taxes associated to refers to other employment made up 21%. Among the taxes Peru 299,364 299,648 599,012 The total tax contributions of Telefónica in the collected, VAT stands out, representing 83% of United Kingdom 43,742 319,308 363,050 taxes and fees financial year 2013 were 14,060 million euros, the total. Chile 158,961 192,036 350,997 4,792 million euros of which corresponds to associated with taxes borne and 9,267 million euros to taxes The Company's tax contributions in Spain in 2013 Colombia 160,654 170,907 331,561 our economic collected. This means that for every 100 euros of were 3,443 million euros, or 24.5% of the total. Czech Republic 130,231 200,423 330,653 Company turnover, 24.6 euros was dedicated to The tax contribution ratio for Telefónica in Spain Ecuador 84,650 20,536 105,186 the payment of taxes, or 8.4 to taxes borne and was 35.67%: that is, during 2013, Telefónica paid activity Mexico 47,035 48,044 95,079 16.2 to taxes collected. These figures include the 36 euros out of every 100 euros of pre-tax profits payment of taxes and other local fees such as generated in Spain, in taxes. Ireland 38,494 38,154 76,648 operator general taxes, numbering fees, charges Uruguay 41,047 16,719 57,767 (*) for using the public domain, fees to finance Out of every 100 euros of Total Value Distributed Slovakia 7,377 19,021 26,398 the Public Radio and Television in Spain, and by Telefónica in 2013, 51 euros were used to taxes. other similar taxes in other countries. Spectrum Luxembourg 18,394 2 18,396 Puerto Rico 7,881 8,220 16,101 Netherlands 7,203 146 7,349 Israel 1,826 1,534 3,359 Others 1,951 2,191 240 Total 4,792,921 9,267,499 14,060,419
(1) Taxes borne. Those taxes paid by Telefónica to the administrations of the various states in which it operates, and have been a cash cost to the Company. (2) Taxes collected. Those taxes collected by Telefónica that have been entered on behalf of other taxpayers as a result of the economic activity of the Company, (*) According to the methodology of the CTT of Price Waterhouse Cooper, distributed tax value of a company consists of the sum of the i.e. tax revenues are obtained thanks to the economic value generated by it. following elements: shareholder value (dividends, reserves, etc.), wages and salaries (net of tax raised to employees), net interest (3) Total contribution. CT measures the total impact represented by taxes. and tax (borne and collected).
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DRIVER OF PROGRESS Universal Service_
The objective of Universal Service is to establish suitable financing mechanisms for extending telecommunications services to the entire population, so as to guarantee the whole population a common minimum standard of services under the same conditions and at an affordable price
Public Universal The so-called Universal Service implies a February 2013 by the government of Venezuela, guarantee of a minimum quality standard of passing from 4.3 strong bolivars per dollar to 6.3 Service service to the entire population at affordable strong bolivars per dollar. Similarly, on 22 January prices. In each case, the sector’s regulator, 2014, the Venezuelan executive announced the agreements are in those countries that decide to have one, creation of a new exchange system and a general in force in eight of specifies the different services included and currency plan, so that certain transactions would the conditions under which they are provided, come to be administered through a system of the countries in as well as the operators that take on this auction at the SICAD rate of exchange, which in responsibility. In the case of Telefónica, recent transactions has been set at about 11.4 which Telefónica Universal Service is currently offered in bolivars per dollar. Argentina, Brazil, Colombia, Spain, Peru, the offers its services Czech Republic, Venezuela and Ecuador. Another major point this year is the rise in the value in Peru (+39% in local currency with It is important to emphasise that the figures respect to the year before), due to the inclusion in euros reflect the impact of the depreciation of obligations of other Group companies in the in the exchange rates, mainly in Brazil and country, such as Telefónica Multimedia S.A.C., Argentina, and the devaluation in Venezuela. The TIWS and Media Network S.A.C. devaluation of the bolivar was announced on 8
Universal Service in countries
2013 Local currency Euros Argentina 135,133,813 18,700,763 Brazil 250,219,397 87,761,951 Peru(1) 82,952,841 23,159,355 Colombia 153,398,891,350 61,887,095 Venezuela 211,719,012 25,316,724 Ecuador 5,465,699 4,117,519 Czech Republic(2) 135,000,000 5,195,070 Spain(3) 30,455,695 30,455,695 Total 256,594,172 (1) Includes services of Telefónica Multimedia S.A.C., TIWS and Media Network S.A.C. (2) Estimate, pending approval by the CTO in the Czech Republic. (3) Estimate, pending approval by the CNMC in Spain.
22 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 23 Telefónica Corporate Sustainability report 2013 Economic dimension
DRIVER OF PROGRESS Telefónica as a responsible investor _ Fonditel, the managing entity for the Telefónica pension funds in Spain, takes SRI issues into account, using environmental, social and good governance criteria (ESG criteria) in its investments
Fonditel is one The Socially Responsible Investments (SRI) (ILO), the UN Guiding Principles on Companies SRI (investments) Distribution of SRI funds that specifically consider environmental, social and Human Rights, and the Unified Good Million euros of the founder and good governance criteria, of the employee Governance Code of the Spanish stock market pension funds of Telefónica Group(1) reached regulator (CNMV). members of the 75.13 million euros in 2013, representing 2.34% of the total value. Of this total, 45.67% Fonditel is one of the founder members of Spanish Forum is allocated in companies and funds of an the Spanish Forum for Socially Responsible UNPRI risk capital 2012 for Socially environmental nature, in renewable energies, Investment (SPAINSIF). The forum is a non- Good funds water and forestry. 41.76% in companies profit association made up of entities interested governance 2.56% Responsible dedicated to affordable housing for rent and in encouraging socially responsible investment 10.01% student residences. 10.01% is in funds aimed at in Spain by creating a platform which includes 71.11 Investment, good corporate governance, and 2.56% in risk financial and managing entities, providers of capital funds that have signed the UN Principles SRI services, non-profit organisations linked to a non-profit of Responsible Investment (UNPRI). SRI and trade unions, and currently totals 41 association associates. The association aims to be a point At Fonditel, sustainability analysis takes into of meeting and reference, to generate and Total 2013 Environmental account the performance of its investments with disseminate knowledge of socially responsible nature 75.13 M€ 45.67% regard to principles, directives, recommendations investment, as well as to raise awareness and 2013 and regulations backed by a broad consensus, encourage changes in the processes of the in both the domestic and international arenas. investment community, the public authorities, These are the UNPRI, the UN Global Pact companies and the public in general. 75.13 Initiative, the Guidelines for Multinationals of Social the Organisation for Economic Cooperation and nature Development (OECD), the OECD Principles of 41.76% Good Governance, the Tripartite Declaration of Principles for Multinational Companies and Social Policy of the International Labour Organisation
(1) Employees of Telefónica Spain, F.P. and Fonditel B, F.P.
24 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 25 3. Our approach_
Corporate Corporate Materiality: focused Stakeholder Responsibility and Responsibility on the key issues_ engagement_ Sustainability as part and Sustainability of the Telefónica structure in vision_ Telefónica, S.A._ Telefónica Corporate Sustainability report 2013
Our approach Corporate responsibility and sustainability as part of the Telefónica vision_ How do we work? The company’s vision is borne out of the conviction that technology should be available to every person, company and public administration so that they can BE MORE_ How do we work every day? Discover, Disrupt, Deliver define the way we work. Deliver. We take These three key attitudes summarise our existing advantage of our Technology is amazing and it’s getting more ➜ Firstly, because Digital Technology provides corporate behaviour and brand values as well as global presence, Telefónica helps amazing every day. But technology is nothing new opportunites for people and holds the the insights we gathered from our customers, while remaining agile, people to access, without people. What is important is how it power to transform the Company in a positive employees and analysts. allowing us to fulfil our improves people’s lives. Technology transforms light. Due to this, we take the lead in this commitment of carrying understand the way in which people are in touch, keep up transformation, creating opportunities for the What do we do for our customers? affordable technology to date, enjoy, buy, share and learn. Technology many and not the few. to people. and enjoy what also strengthens businesses, providing them Connectivity is the first step into the digital world. with opportunities and increasing their ➜ Secondly, because bringing technology to To be a Digital Telco means taking another step. Disrupt. We anticipate Discover. We have technology can productivity. people requires a number of special capabilities; Our mission is to act as a guide for people and this change and will be always known the offer them Telefónica is uniquely positioned to make a businesses. We help people to access, better innovative using our importance of being Why do we work every day? difference. We can bring technology to people understand and enjoy what technology can offer knowledge of the digital focused on our through our networks and our commercial them. This means that we will use our consumer world and our spirit customers. However, As a consequence of this reality, at Telefónica capabilities. This is what we know how to do best. knowledge, our networks, our technology and our of openness. Disrupt it is now up to us to we believe that technology should be open to commercial experience to deliver simple digital means to improve the discover what it is they everyone so that we can all be more_. In this way, ➜ And thirdly, because technology is creating an services that are smart, safe and enjoyable. rules of the game to need in the digital world. we can all do more, live better, be more_. We unstoppable and irreversible revolution within In summary, a Digital Telco brings the best of generate greater value believe in this for three reasons: our industry. We can take advantage of arising technology to people. for our customers and opportunites for those companies that best for Telefónica. respond to the needs of customers.
Shareholders Employees Consumers Businesses Institutions Partners Company
We can all The digital world We all aim to develop our Technology changes the Technology offers new Institutions are challenged In the digital world, Society seeks socio- be more_ creates opportunites for potential as professionals. way in which people live. business opportunities to accelerate socio- businesses cannot do economic progress and the companies. We want our We want our employees to We want our customers and increases productivity. economic development. everything on their own. protection of the natural shareholders to be more_ be more_, achieving the best to be more_, discovering, We want businesses to We want institutions to be We want our partners, environment. We want it by capitalising on the new for themselves, their teams understanding and making be more_ thanks to the more_ transformational startups and entrepreneurs to be more_ by making the revenue streams that flow and their clients. We are all the most of technology. tools and knowledge in and for this reason we are to be more_ thanks to most out of technology. in from our digital future. committed to being a Great order to stay at the cutting openly collaborating with our scope, vision and Place to Work. edge of the latest digital them. experience. innovations.
28 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 29 Telefónica Corporate Sustainability report 2013
Corporate Sustainability in the Telefónica vision ¿What is our strategic sustainability Protection of minors, supply chain management? sustainability, privacy and freedom of sustainability We are living through a social and economic expression, human rights in all their aspects, revolution unprecedented in the history of Business transparency and the management management of the business opportunities is a source of humankind, brought on by the possibilities that of integrity through the Business Principles linked to the positive impacts of our services on technology opens up to people. of Telefónica allow the creation of trust in society and the environment, are some of the competitiveness the markets, and more generally among the projects under way. and progress: Our mission is to make these possibilities available stakeholder groups of the Company. to all companies and individuals, so that they can All this is very much in harmony with the concept it helps reduce live better, do more things and Be more_. Corporate sustainability is a clear source of of stakeholder engagement, that helps Telefónica competitiveness and progress: it helps to reduce to have a voice in debates on sustainability risk and increase The sustainability strategy of the Company is a the risk premium on financial markets, increases issues, beyond the traditional ones handled part of this mission and manifests itself in clear the value of the brand and the distinctiveness within projects as part of their needs. brand value and results: for clients, facilitates employee fidelity, ensures differentiation for a stable project as a Company and for society, The progress and results of this process can ➜ Helping people to live better. At Telefónica we are bolsters the legitimacy to operate and permits be seen in the Annual Corporate Sustainability customers convinced that with our technology and services sustainable development of the communities report, which takes the materiality matrix as a we can help to improve the quality of life and where Telefónica is present. reference, all within a framework of international safety of our users. reporting standards and verified externally. With In Telefónica, sustainability is analysed from a these, we keep our stakeholders informed about ➜ Transforming society. We at Telefónica know that value perspective, with 3 main guidelines: growth the main advances in management issues and where there are ICT, there are development and in activity, increase in profitability and risk the evolution of indicators, in addition to stating opportunities, and that the new technologies are management. It is centered on quality, innovation our objectives for future years. a source of enterprise and social innovation. and productivity to create long-term competitive advantage and value. Sustainability at Telefónica is rated as among ➜ Caring for the planet. At Telefónica we are the best in our sector by its most influential working on efficient management of the This is realised in a series of key projects linked to analysts, and our actions are acknowledged in environmental risks of our operation, and we operation with criteria of sustainability (economic, the most prestigious worldwide sustainability provide services that further the environmental social and environmental), 100% aligned with the rankings, such as the Dow Jones Sustainability sustainability of people and cities. Company mission, and which offer responsible and Index (DJSI), the Carbon Disclosure Project (CDP), transparent management of our entire footprint. Sustainalytics, Oekom, FTSE, etc.
Awards
Nº 5 in the telco industry Member of the top category, DJSI Listed for twelve Sustainability Leaders Prime Rating 5th telco out of Excellence World Index, 86 points consecutive years Bronze class 112 operators Investment Register
30 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 31 Telefónica Corporate Sustainability report 2013
OUR APPROACH Corporate responsibility and Sustainability structure in Telefónica S.A._
The sustainability framework of Telefónica or importance patronage exceed the threshold is supported by a corporate-based strategic set by the Council. management and operational executive. This model is carried out in the organs and units that ➜ Promote the development of Telefónica’s the company has in the headquarters and in Corporate Reputation and Responsibility project, countries where it is operating. together with the implementation of the core values of the Group. Corporate Reputation & Sustainability Direction is the responsible area for the strategic The Committee on Institutional Affairs offers management of Sustainability, reporting a calendar of meetings and an annual plan directly to the Global Public Affairs & Regulation of activities, meeting monthly according to Direction. schedule, and when necessary, upon call of the Chairman. During 2013, as planned, Governing bodies the Institutional Affairs Committee held six meetings to discuss certain issues and aspects In May 2013 the Board of Directors approved the of reputation and social responsibility of the Management bodies Corporate Reputation & Sustainability Direction establishment of the Committee on Institutional Telefónica Group. is addressed in the Global Public Affairs & Affairs as the top governing body of Reputation Corporate Reputation & Sustainability Direction Regulation area, whose mission is to disseminate and Corporate Social Responsibility, replacing the works to facilitate, improve and measure and transmit the digital public positioning of Committee on Human Resources, Reputation and Institutional Affairs Committee corporate reputation management at Telefónica. Telefónica in all those international public spaces Corporate Responsibility, created in 2002. It generates positive perceptions of trust and and areas related to Internet world, strengthening Date of respect for all stakeholders (global and local) our regulatory position in Europe and Latin This consolidates and reinforces the Composition Appointment in order to facilitate the construction of the America, improving our reputation in all countries implementation and development of our new public positioning. To realize this, the area Mr. Julio Linares López where Telefónica is present and the new policy of sustainability strategy with other public promotes a responsible and sustainable manner exploitation of digital sponsorships. (Chair) 31 May 2013 affairs, in order to have a better understanding in the way we do business throughout the of the demands and expectations of all our Mr. José Fernando de Almansa company by (1) the identification, prevention Corporate Responsibility and stakeholders. Moreno-Barreda 31 May 2013 and mitigation of reputational risks (pure and Sustainability in countries Mr. Alfonso Ferrari Herrero 31 May 2013 derivatives from activity), (2) the management of Functions of the Committee on Institutional the Business Principles or code of ethics, (3) the The Corporate Reputation and Sustainability Mr. Gonzalo Hinojosa Affairs: development of policies, standards and projects team has international presence through Fernández de Angulo 31 May 2013 to deploy the Business Principles… all with the direct collaborators in all the countries where ➜ Analyze, report and propose to the Board the Mr. Antonio Massanell Lavilla 31 May 2013 aim of responding to new regulatory demands, Telefónica has operations, thus implementing principles that must rule the Sponsorship and Mr. Francisco Javier de Paz to prevent unwanted social and environmental global projects and developing their own projects Patronage Group policies, track them and approve Mancho 31 May 2013 regulations and strengthen the legitimacy of based on their local context. Thus, the Company those sponsorships individually when the amount Telefónica to operate. provides local responses to issues that are specifically relevant in each country.
32 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 33 Telefónica Corporate Sustainability report 2013
Materiality matrix
OUR APPROACH + Quality of service Materiality: focused on Transparency
Privacy and freedom the key issues_ of expression Ethics & compliance Green ICT services We have taken an importan step in the methodology Materiality Sustainability in order to convey our message on sustainability better to the in the supply Energy and Human rights chain CO2 markets and society in general by compliling a more relevant, to stakeholders Relevance Social Accessibility credible ande easy-to-use report inclusion Safe use of the - Internet by children Labour
H igh practices Electromagnetic fields Diversity
Medium Environmental management Low
Low Medium High - + Impact on strategy
This procedure Taking advantage of the framework offered by significant economic, environmental and social The analysis procedure are following: individuals, companies and public authorities so version G4 of the Global Reporting Initiative (GRI), effects for our organisation, and also those that they can Be more_. Discover, Disrupt, Deliver has let us create we at Telefónica wanted to go one step further of greatest relevance in our stakeholders’ 1. Identification of relevant general issues defines our way of working. These three attitudes with regard to our materiality matrix, so that evaluations and decisions, such global and To identify the relevant general issues, we sum up both our current corporate behaviour a more general we can concentrate on those issues which turn country level. analysed the trends in the sector and the GRI G4 and brand values, and the expectations of our out to be key for our activity and our principal indicators, and we carried out interviews with our customers, employees and analysts. In the light matrix that shows stakeholder groups. This procedure has let us create a more internal stakeholders. We identified 15 relevant of these criteria, we analysed whether each of which issues exhaustive general matrix that shows which subjects. the relevant issues identified fitted in with the In this way, we have analysed its materiality issues should figure in the Report, and a specific company vision and strategy. should figure in by creating a common procedure that makes matrix for each relevant material aspect. 2. Identification of relevant specific issues us aware of the material aspects that reflect For each general issue, we carried out individual ➜ Trends among our peers in the industry the Report, and interviews with experts in the areas involved We assessed whether each of the relevant for analysis to determine which aspects were subjects was being addressed by other a specific matrix Identification of relevant general issues material. A total of 67 specific issues were companies in our industry. for each relevant identified. ➜ Sectoral initiatives and international material aspect Ethics & compliance Energy and climate 3. Identification of stakeholders affected sustainability trends change As the outcome of our ongoing dialogue with our We determined whether the general issues stakeholders, with whom we collaborate closely, identified were being considered by the main Privacy and freedom Electromagnetic of expression fields we identified those affected by the issues, sector trade bodies and sustainability rankings. yielding weightings in terms of the impact and (GESI, ITU, DJSI, GSMA, CDP, ISO, etc.). Safe use of the relevance for the company. Internet by children Green ICT services ➜ Normative context Universe of 4. Evaluation of the impact on The applicable laws, regulations, international Work practices General Issues Accessibility managing the company agreements and voluntary agreements were To determine whether an aspect was material we analysed for each of the issues identified. Sustainability in performed a qualitative analysis in terms of four the supply chain Human rights parameters evaluated according to a common 5. Evaluation of relevance for stakeholders criterion: We identified the main stakeholders for each Diversity Transparency of the general issues, using all the information ➜ Company vision and strategic relevance of from the different mechanisms employed in our Quality of service Digital inclusion sustainability habitual dialogue with them. The company vision sets out from the conviction Environmental that technology should be available to all management
34 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 35 Telefónica Corporate Sustainability report 2013
our approach Stakeholder engagement_ At Telefónica we know that interactive communication with all our Stakeholders Methodology for dialogue Some examples of commitment stakeholders, in person and online, helps us look for positive results for both our identified and interaction Company and the groups implicated. Customers Through the channels we establish at the http://www.movistar.es/particulares/atencion-cliente/ moment of sale, and through customer http://www.movistar.es/particulares/tienda/servicios- services, monitoring of satisfaction, SDC, digitales/solucion-guru/ and through our services of Marketing and Market Research, fora, and trialling of our http://info.telefonica.es/es/servicio_defensa_cliente/html/ products and services in their facets of http://www.telefonica.com.br/residencial/atencaoaocliente/ Sustainability and Corporate Responsibility. faleconosco/ombusdman/ http://forum.o2.co.uk/ http://www.movistar.com.mx/Contacto-Foro- Conectados#ForoConectados http://www.movistar.com.ar/foro/web/guest/foro https://twitter.com/#!/search/users/Telef%C3%B3nica https://twitter.com/#!/search/users/O2
215 online In our day-to-day work we take active responsibility and customer service; children and the use of Staff Through the annual survey of all our https://twitter.com/#!/UniversitasTef for talking about those subjects related to new technologies; the digital revolution and ICT in professionals, which includes specific http://www.observatoriocomunicacioninterna.es/Imagenes/ channels take information and communication technologies (ICT) society and the economy; the CR report and social questionnaires on matters of sustainability, ponencias/PresentacionTelefonica-EstrategiadeComuniacac of most interest and concern to our stakeholders. action. internal round tables on the Business the pulse of ionInternaOnline.pdf This allows us to identify their relevance and Principles, various internal channels for impact, so helping us to find exact, positive stakeholders’ The objectives we are pursuing at Telefónica with allegations, the intranets of Telefónica https://portalsenior.telefonica.es/em/pub/a/index.html solutions among all of us. To do this, we collaborate this dialogue are, above all: better knowledge of and its affiliates and its blogs and Twitter actively with different interested specialised groups the opinions and expectations of stakeholders; opinion, 29% of accounts, as well as through all the fora for (stakeholders) so as to improve this exchange. offer of an agile and effective channel for them in Twitter, Among these are government entities, NGOs, customer service and incident management; debate on training courses, online platforms, consumers’ associations, academics and scientists, providing more personalised information; Yammer, etc. 26% in Facebook employees and investors. Knowing which questions establishing an emotional connection with an 19% in most concern the stakeholders of Telefónica is the them and improving their perception of us, so foundation for the sustainability projects of the as to bolster our legitimacy when it comes to Shareholders Through continuous meetings, both http://www.telefonica.com/es/shareholders_investors/jsp/ YouTube Company. operating in the different markets. individual and collective, with institutional home/home.jsp investors and analysts of the sector, as At Telefónica we have 215 online channels for http://serviciosaccionistas.telefonica.es/Registro. Talking about the digital impact well as by online channels to learn which the Telefónica, Movistar, O2 and Vivo brands for do?idioma=es matters turn out to be most relevant to communicating with our different audiences (as at To support and demonstrate the digital February 2014). Of these channels, 29% use the transformation of the Company, the online the investor community, especially ISR http://www.telefonica.com/es/shareholders_investors/ platform Twitter; 26%, Facebook; 19%, YouTube; channels reinforced their contents and centered institutions and/or those with specific html/presentaciones/index_foros.shtml projects of responsible investment and and the rest, on other platforms, among which is the conversation both on the new digital http://www.eurosif.org/ Tuenti in Spain (26%). businesses (M2M or Machine to Machine, Big signatories of the PRI. Data, Cloud, mobile advertising, digital security, The stakeholder groups to whom we pay closest etc.), and on their role as part of the solution attention in these processes of online dialogue are to the great worries of society (education, Suppliers Through the biannual supplier satisfaction http://www.telefonica.com/es/suppliers/html/modelo_ customers, employees, academics and students, health, social inclusion, energy efficiency, open survey, and the assessments of quality compras/como_ser_proveedor.shtml and people connected to social networks in general. government, etc.). included in the different operators' quality http://www.ecovadis.com/website/l-en/home.aspx Among the priority subjects we should mention: control systems. new products and services; quality, provisioning
36 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 37 Telefónica Corporate Sustainability report 2013
Stakeholders Methodology for dialogue Some examples of commitment RConversa is the Telefónica platform for identified and interaction open online dialogue with all members
Industry organisations We participate actively in fora and www.ctia.org/ of its stakeholder groups associations which debate the particular www.etsi.org themes of Sustainability and Corporate Responsibility affecting our sector, www.gbd-e.org with the objectives of improving www.gsm.org measurement, standardising indicators and sharing best practices. www.itu.int www.gesi.org/ This trend was reflected in blogs like Think In addition, it represents a chance to open up Big, Telefónica’s Digital Hub, M2M, Telefónica the debate internationally with official bodies, Professorships Network, and Sustainability regulators, the industry and users, to define the Governmental Dialogue can be classified mainly by www.weforum.org and Corporate Responsibility, as well as their public policies that need to be adopted in the new organisations geographical area, grouping different accounts on the different social networks. environment to drive development of the digital www.worldbank.org/ parties according to the scope of their society and economy. activity: local, regional, national and www.ilo.org Likewise, the majority of the debates that were global. Within each field of action we held during this past year on the online dialogue Tools for professionals www.who.int/es/ maintain a fluid dialogue with those platform RConversa concentrated on the digital responsible for telecommunications www.un.org/es/ world. ICT in the area of health; education Telefónica employees have access to the services, for innovation, for consumers, technologies in the new digital era; MOOCs; website Telefónica and Communication 2.0, in www.eifonline.org enterprise in the digital world; digital cities and which responsible use of social media channels education, social policy, regulation, open government, were the topics of some of the is promoted, through recommendations for economic policy, etc. web.oas.org/citel/es/Paginas/default.aspx 13 debates organised. action, an online course and the Company Social www.rpd.es/ Networks Policy. In line with this digital evolution, in 2013, Telefónica promoted #TheOpenAgenda, an inter- Similarly, we encourage use at Telefónica of NGOs (Non- Agreements of collaboration and www.acnur.org/t3/ sectoral project to communicate Telefónica’s the Enterprise Social Network (ESN), whose governmental continuous dialogue. The following are point of view about the concept Be more open, aims are to talk about and drive our cultural * www.msf.es/ organisations) our principal advisers on products and to show that the Company is being transformed transformation into a Digital Telco and bolster the services developed by Telefónica for www.oxfamintermon.org/ into a Digital Telco, which acts differently, is commitment of our professionals to this change persons with some disability. more open, more agile... Telefónica also wants by making cooperation easier. www.UNICEF.org to strengthen its commitment to the openness www.bsr.org of the web, data and innovation in support of This internal network –Yammer,– now has over the business objectives; to reach and influence 55,000 employees registered, with about 2,000 www.centroregionalpmal org/ the technology elite, the opinion-formers in the more joining each month on average. At the date web-pacto/esp/index.php media, bloggers, developers, consumers… of this Report Yammer had more than 400 active communities of interest in its principal network We managed to get a big reaction with (Global). Specialist audience The opinion of professionals www.unglobalcompact.org/ #TheOpenAgenda, which included support from in sustainability and corporate www.cdproject.net/en-US/Pages/HomePage.aspx key influencers in the industry, with articles by These days, all the global internal communication responsibility is very constructive for Tim Berners-Lee, the founder of the web; Mitchell channels at Telefónica are bidirectional, and harvest identifying items of materiality. www.ghgprotocol.org/ Baker of Mozilla; Kathryn Parsons of Decoded and the opinions and evaluations of our professionals. Bill Hoffman, of WEF. In 2013, the most viewed items in the online daily www.globalreporting.org/ bulletin were those relating to employee perks www.theiirc.org/ Telefónica has already published its public stance (offers, prize raffles, grants...) and the Company’s on the new Internet ecosystem, in March 2014. organisation and results. The most viewed in the www.lbg.es/ The manifesto, entitled A Digital Manifesto_: online corporate magazine was content about the An open and safe Internet experience for all, Telefónica strategy to turn itself into a Digital underlines the political issues and challenges in Telco. releasing the full potential of the digital world for consumers, companies and the authorities, On another subject, knowledge transfer at * Telefónica mantains relationships with local NGO’s in each of the countries for all aspect. while it also offers 10 recommendations for Telefónica is based on eKISS, a platform that improving consumers’ experience on the Internet surpassed the figures of 62,000 documents held and prompting more investment in digital and 138,000 visits during 2013. The conferences infrastructure. held had around 18,000 visits.
38 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 39 Telefónica Corporate Sustainability report 2013
Social channels of Telefónica @RCySostleans an Facebook YouTube Twitter Others Corporate Responsibility
USA and Sustainability blog 0 0 Ireland and RConversa platform 1 1 1 1 Guatemala 4 1 2 1
Mexico 1 1 3 2 United Kingdom 1 1 2 0 Nicaragua 1 1 The operator with the 2 3 best customer service 2 1 First Flock award for on social networks Twitter (Socialbakers) New mobile app My Movistar for immediate assistance
Germany 3 1 During 2013 we added more information to Best The most wide-ranging and Panama the internal online platform on the subjects of exhaustive global survey carried 3 0 practice 1 1 public affairs and the role of ICT. Specifically, we out to date among young people 1st shop included content on Public Policy, Regulation and from 18-30, from 27 countries: 1 0 in Facebook Institutional Relations, aiming to have material of El Salvador interest on the Company stance within a single What does the ‘Millennium 1 1 Colombia tool for dialogue with stakeholders. Generation’ think? 2 3 Telefónica, in collaboration with 1 0 Milestones the Financial Times, carried out 4 2 209,000+ the Global Millennium Survey in Facebook fans Spain @RCySost, is one of the most influential on 2013, Venezuela 4 5 Twitter in Sustainability. 2 2 The aim of the initiative was to Costa Rica 7 13 In 2013, the Twitter account of Telefónica, which obtain the most accurate possible 4 2 1 1 New self-management deals with matters of Corporate Responsibility and snapshot of the Millennium service at Sustainability, was included for the first time in the Generation, for which more than 1 0 @movistar_es social media ranking SustMeme CSR & Business, 12,000 of its members were Over 20% of customer Brazil which lists the 500 most influential users in the interviewed. queries are answered 4 4 world on these subjects. Telefónica went straight using social networks in at number 78, being the fifth company. Also, in 8 6 Some overall results Peru January 2014, it was in seventh position in the new 76% believe firmly in all that VIVO: 2.5 million ranking TOP 100 CSR, centered on Spain. technology can offer. 3 2 Facebook fans Ecuador 2 0 Uruguay Throughout hte year, it remained a point of 42% say that improving 3 2 3 million 1 1 reference in its field, exceeding 37.1 million access to quality education is plus impacts at the end of 2013 (10.3 million in 2012). the principal way to make a 2 0 Facebook 1 0 fans difference to the world. 370,000+ Facebook @RCySost is supported by the Sustainability and fans, Corporate Responsibility blog and the debating 42% of men and 29% of women 11% of the population platform RConversa. think that technology is the most Chile Argentina Global & important field of study for their corporate Total future success. 3 1 7 5 13 7 56 42 1 0 6 6 68% judge that they can 10 19 63 55 Movistarchile.tv: Encounters #Craneando: become entrepreneurs in their streaming HD, 120,000 1.9 million social network own country or else develop visits the first year users and introduce an idea onto the market.
40 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 41 4. Responsible management_
Ethics and Customer Labour practices_ compliance_ satisfaction_
Management of Sustainability in the Human rights_ diversity _ supply chain_ Telefónica Corporate Sustainability report 2013 Economic dimension
responsible MANAGEMENT Materiality matrix
Specific Business Principles matrix Ethics and compliance_ 10 As part of our DNA, ethics is fundamental in the process of transformation to a Digital Telco Anticorruption General sustainability matrix
10 Code of ethics
Ethics and compliance
Stakeholder relevance Stakeholder Complaints channel Stakeholder relevance Stakeholder
0 10 Impact on Company management 0 Impact on Company management 10
The Telefónica It is a priority for Telefónica that our employees honesty and trust, respect for the law, integrity the Company of having ethical directives, their Business Principles Channel In 2013, the are aware of the spirit and letter of our code of and human rights. In addition, it sets out some responsibility as professionals to abide by them All employees have the opportunity to ask code of ethics, ethics. This is the basis for building a culture specific principles oriented at guaranteeing and the channels of assistance to resolve doubts questions, seek advice and raise matters related Office of where employees understand what is required the trust of our customers, professionals, or handle allegations are all explained. to compliance with the Business Principles, either underwritten by of them and their own responsibility in the shareholders, suppliers and society in general. anonymously or in person. Corporate the Board, runs observance of the Business Principles. In the same By December 2013, more than 73,000(1) Business way, we rely on our partners and suppliers to In 2013, the Business Principles were ratified in employees (63% of the workforce) had passed The Business Principles Channel is available on right through comply with principles similar to ours. Costa Rica, where Telefónica began commercial the Business Principles course. the Intranet for employees, and during 2013 the Principles operations at the end of 2011, and all the Business Principles Office revised and updated our Business In addition, there is a series of elements that mechanisms to ensure their fulfilment have been The case of Telefónica Brazil is worthy of note, the regulations that govern it. received, through make up an appropriate control setting. This put into place. which with the integration of the fixed and mobile Principles defines our anticorruption programme, where businesses following the purchase of Vivo, has In 2013 the Business Principles Office recorded a the Canal, a the institutional message leaves no place for The body responsible for ensuring observance launched the training course for its more than total of 77 communications through the Business total of 77 misunderstanding about our total intransigence of the ethical code throughout the Group is the 18,000 professionals in late 2013. Principles Channel. Of the 63 whose investigation towards corruption and illegality. Business Principles Office. During 2013, this body has concluded, 14 turned out to be well-founded, communications incorporated new representatives designated Together with this online training, various in-person one of them being for corruption and none for Code of ethics by the departments that comprise the Office training activities have been devised to delve discrimination. Among the measures adopted (Audit, General Secretaríat, Human Resources more deeply into some of the ethical principles, there were three dismissals. Our code of ethics, called Our Business Principles, and Sustainability), and revised and updated its emphasising their applicability. These have taken approved by the Board of Directors in 2006 and functionality and duties in accordance with the place either anywhere in the organisation, or in All communications received were handled revised in 2010, applies to all our employees and new organisation. those departments identified as at risk. in keeping with the principles of respect, operations, independently of the country where confidentiality, exhaustivity and substantiation. our activity takes place. Training All employees have access through their In the cases in which some irregularity was An online training course on Our Business respective intranets to the Business Principles detected, the Audit and Control Committee, (1) To calculate the percentage of employees Available in four languages, the code reinforces Principles has been included within employees’ website, where full information about the code reporting to the Board of Directors, was informed. trained in the code of ethics, we’ve taken into account the number of permanent our commitment to act in line with the most professional training plans. In this activity, by of ethics and the mechanisms to guarantee employees of the companies of the Group, demanding ethical principles, associated to means of varied scenarios, the importance to compliance with it are given. wherever it has provided the training.
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Telefónica employees who have passed the Code of Ethics course the financial processes that manage or affect information about the main ledger accounts of the Group. The team issued certificates of the 74,000 73,695 absence of material or significant weaknesses 70,286 73,136 and the external auditor has attested to both the 60,219 56,000 results and the efficacy of the revision process.
➜ 19% were directed at the prevention of fraud, 35,949 investigation of allegations or revision of actions by individuals. Best practices Training at Telefónica Vivo ➜ 8% were total or partial analyses of processes 2007 2008 2009 2010 2011 2012 2013 related to the cycle of expenditure and With the integration of the fixed and investment (purchases, payments to third mobile businesses in Brazil following parties, payments to employees, logistics and the purchase of Vivo, at the end of management of warehouses, the investment 2013 Telefónica Vivo launched, under process and management of assets, discounts the banner of Our commitment, and customer refunds). everyone’s responsibility, a training campaign on the Code of Ethics to its ➜ And another 7% of the reports were to verify more than 18,000 professionals. During 2013, Anticorruption Organisational elements correct observance of other legal obligations Our commitment is to ‘zero tolerance’ of fraud Telefónica has a series of specific committees (occupational, data protection, fiscal, etc.). So far, about 4,400 employees, Telefónica and corruption, since we understand that they and units that help to ensure we keep our 22% of the workforce, have already have a negative impact in the long term on the commitment to zero tolerance of corruption In these activities, some cases of misuse or completed the course and another conducted 980 businesses and society. and bribery, within their specific areas of misappropriation of Company assets were 1,121 are currently doing it. internal audits responsibility and experience: detected, giving rise to 99 dismissals. All these At Telefónica, there is a series of elements that were of minor importance, and in no case was The launch of this training activity and inspections make up an appropriate control setting in all our ➜ Committees reporting to the Board of Directors there implication of directors or senior members has been complemented by weekly operations. Audit and Control Committee, Institutional Affairs of the Group or the relevant companies. information on the intranet about in all companies Committee. the Code of Ethics, videos, etc., with Regulations special attention paid to employees and countries in Our Business Principles include our commitment ➜ Specific organisational units: who deal directly with the client which the Group in matters of anticorruption. (sales agents, shop staff, etc.). ➜ Internal Audit Units in all the countries where holds interests In addition, there is a series of regulations of the Group has significant interests. global application that develop and complement this point, whose objective is to prevent ➜ Central Inspection Unit specialised in corruption in the processes identified as being prevention of fraud and investigation of most at risk: decision-making, purchases and allegations or other situations. contracting, payments, warehouse management, etc. ➜ Payment Intervention Unit in the most Integrity important companies. Some of these are: We do not offer or accept Dow Jones Sustainability Index ➜ Global Sustainability Department. gifts, invitations or any ➜ Corporate regulations on gifts, invitations and other kind of incentive that In 2013 Telefónica was among the entertainment expenses. We can highlight that ➜ Corporate Risk Management Unit which could be compensated by or 10 Telecom companies leaders in Nuestros in 2013, local regulations on conflict of interest centralises and reports information on Principios influence a business decision. the world by criteria sustainability, were approved in Venezuela. risks that it receives from the local risk de Actuación with 27 points percentage above the management units present in the Group’s We avoid or declare any average sector, according to the Dow ➜ Regulations on approval of patronage. principal operators. conflict of interest which Jones Sustainability Index (DJSI), one could put personal priorities of the most demanding in the world. ➜ Telefónica purchasing model manual. Controls ahead of the business ones. Among the best industry practices The Internal Audit and Inspection team, (Best in Class) highlighted Telefónica ➜ Regulations on general criteria for procurement of responsible for the processes of auditing We behave with rectitude, was outstanding in code of conduct goods and services. operations within the Group, carried out in no case seeking personal and anticorruption policies, among around 980 actions in 2013, throughout all the advantage or that of other aspects. Risk management companies and countries in which the Group has third parties through Within the overall risk identification procedure interests. Main points: inappropriate use of our we include the risks of corruption or bribery position or contacts in in our operations, so as to establish and carry ➜ 25% were audits of finances or of information Telefónica. through the controls and action plans necessary systems, fundamentally designed to review the to mitigate this. existence and effectiveness of controls over
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Materiality matrix responsible MANAGEMENT Specific customer service matrix Customer satisfaction_ 10 Quality of service At Telefónica, we have placed the customer at the centre of everything we do. Satisfaction analysis is a her tool to know the perception of the service General sustainability quality and the customer care matrix 10 Quality of service Stakeholder relevance Stakeholder Stakeholder relevance Stakeholder
0 10 Impact on Company management 0 Impact on Company management 10
In 2013, Customer Total accesses of Telefónica exceeds 323 million at According to data from the OAUT (statutory In Argentina we won first prize in the the end of 2013, or 3% higher than a year before, telecoms ombudsman in Spain), Movistar is the International Team Excellence Competition Best practices Satisfaction Index driven by mobile contract customers, especially for operator that receives fewest claims. In the area of 2013 – awarded by the American Society mobile broadband, and pay TV. It is notable how fixed telephony, Movistar only received 0.88 claims for Quality (ASQ) in Indianapolis, USA – The AI (Internauts Association - a consumer rose to7.14 points accesses of Telefónica Latin America developed for every 10,000 users. This is very different from for a quality management improvement body) has rated the quality of mobile (69% of the total), rising 4% inter-annually despite Orange (with 4.62), Jazztel (3.73), Ono (2.69) and project focused on the final satisfaction broadband access offered by operators in Spain out of 10, with an more restrictive criteria for counting prepay Vodafone (2.55). Respecting fixed Internet access, of customers. The Telefónica project at 6.41 out of ten. This figure is well below the increase of 0.02 customers. It is important to bear in mind that the Company is again the one that receives fewest, Conectados a tiempo (Connected on time), 9.1 rating achieved by Movistar. According to the variation in accesses is impacted by the sale as only 0.19 of every 10.000 clients has lodged a centered on diagnosing and implementing the analysis carried out by AI, Movistar is two points compared of the residential fixed line business in the United claim. Above this, Jazztel (0.81), Vodafone (1.01), sustainable improvements in installation points above Vodafone and Yoigo and more Kingdom. Orange (1.38) and Ono (2.42) can all be found. time for different equipment, was also than 2.7 above Orange. to the year before There is no doubt that the greatest differences recognised as the best at an international We use the CSI (Customer Satisfaction Index) between operators are found in the fixed line voice level. This Telefónica initiative was developed The association has explained that the methodology to measure the satisfaction of our and data packages. Indeed, while Movistar has following the Six Sigma methodology, a differences are in the download speed (in clients, and this indicator is reported periodically only 1.11 claims for every 10,000 users, the figures system implemented by the company which comparison with the speed offered), in to the Board of Directors of the Company. Indeed, for the rest are 2.96 for Vodafone, 3.89 for Jazztel, points the way to perfection in management customer service and in the prices and features the Company’s Board of Directors has a specific 5.57 for Orange and 5.60 for Ono. of products and processes. of the classic offers. committee dedicated to Service Quality and Customer Service. This meets every quarter so as Telefónica United Kingdom has also managed Milestones Specifically, AI has underlined the “large to reinforce our orientation towards the customers to be the operator with fewest complaints in differences” in compliance with nominal of the Group. that country; according to data from the British We won first prize in the International Team download speeds of 7.2 Mbps. While Movistar regulator Ofcom, O2 has now been in this position Excellence Competition 2013 for the quality attained 101%, the Vodafone mean was 64% In 2013, the Telefónica CSI rose 0.02 points for ten successive quarters. management improvement project based and Orange reached 78%. At the 42 Mbps over the previous year to reach 7.14. The most on the final satisfaction of customers in speeds, Vodafone and Orange reach 39% and substantial improvement was in Spain, where In Brazil, where CSI fell slightly, we are putting Argentina. 31%, respectively, although Vodafone reaches customer satisfaction rose by 0.42 to reach 6.85. a lot of effort into improving and expanding 73% at 10.8 Mbps. By regions, there was a generalised improvement the channels of contact, with digital access Telefónica has also maintained the channels in Europe (6.94 vs 6.75 in 2012) and a slight technologies adapted to massive Internet use of communication with diverse consumer and Regarding customer service, the data show a worsening in Latin America (7.32 vs 7.54 in 2012), and the growth in the smartphone portfolio. official bodies and with the regulator. Thus, mean score of 5.9, ahead of Orange, which had which was affected by slippage in markets of high Indeed, we are working on improving the meetings have taken place with ASGECO (the 5.4 points, and Vodafone, with 4 points. volume like Brazil, in the second half of the year, available functionality of channels like as SMS, general consumers’ association), the OAUT and Argentina in the second quarter. Chat and URA, so as to provide simpler, faster, (ombudsman) and various OMICs (municipal With respect to prices, the mean cost per MB standardised interactions. We recently introduced consumer information offices). without speed limitation ranges from 0.0065 Customer Movistar again became the Company with the a chat channel for fixed users and launched a euros/MB with Movistar contract to 0.17 with Satisfaction Var. best customer service, according to the latest collaborative forum so that customers of one of the Vodafone card model, according to the AI Index (CSI) CSI 2012/13 report from the Civil, Economic and Social Rights our major promotions can communicate ahd help data. Spain 6.85 +0.42 Association (ADECES) in 2013, with 6.2 points each other to clear up doubts. The success of out of 10, followed by OMO (5.4), Jazztel (5.35), these initiatives is made manifest by the fact that Relating to combined offers (bundles), Total Europe 6.94 +0.19 R (5.29), Telecable (5.14), Euskaltel (5.08), Vodafone they now deal with about 80% of the incoming the mean score was 6.60 points, Movistar Brazil 6.95 -0.39 (4.92) and finishing with Orange (3.95). contacts. leading with 8 points, followed by Orange and Total Latam 7.32 -0.22 Vodafone.
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responsible MANAGEMENT Materiality matrix
Specific labour practices matrix Labour practices: Staff_ 10 Fair pay and recognition As a global company in a rapidly evolving sector, at Telefónica we have of work at Employment made an effort to put our professionals in the spotlight in order to adapt and Telefónica transform ourselves to face new social and industry realities, and accelerate Work climate General sustainability matrix Health and safety our conversion into a Digital Telco 10 Training Attracting talent Freedom of association and Retention social dialogue of talent Work Stakeholder relevance Stakeholder conciliation
Labour practices Communication Stakeholder relevance Stakeholder
0 10 Impact on company management 0 Impact on company management 10
Number of Telefónica employees in the world
37,014 2012 2013 Telefónica has The telecommunications sector has been At Grupo Telefónica we have more than 34,604 completely redefined in a short period of time: 105 nationalities, distributed in 24 countries. employees new business ecosystems have appeared that Latin America continues to represent the highest require companies to adapt and transform percentage of the workforce. The country with from over 105 to their new environment. This urgent need the most employees is Spain with 34,604, for transformation is linked with innovation. followed by Brazil with 20,878, Argentina with nationalities, Companies must implement ecosystems that 17,139 and Peru with 9,824. distributed in promoted and favour innovation in order to ensure long-term success, which places more and In Telefónica we make an effort to use 24 countries, more people at the centre of the business. sustainable work policies: 94% of the personnel 21,863 have indefinite work contracts and the presence 20,878 with Latin In response to these new realities, Telefónica has of women on the workforce has increased focused on managing employees in three clearly to 38%. Additionally, the number of female 16,792 America having defined areas: design a simpler organization; managers increases each year, reaching 21% in 17,139 the highest have the best team; and have an appropriate 2013, that is, 1.7 p.p. more than the previous year. company culture, capable of adapting to the In the last four years, this ratio has increased percentage changing needs of our clients. The three priority by over 4 percentage points. On the other hand 11,523 areas for the Employee department support turnover reached 21.31 in 2013 compared with 9,369 7,833 the implementation of Telefónica’s strategic 18.54 in 2012 excluding the effect of Atento. 9,824 8,408 transformation programme Be More_. 8,625 7,022 5,792 Also, and as part of the simplification of processes 6,903 5,363 5,735 A simpler organization strategy and in order to favour conciliation, we 4,911 3,452 3,024 1,929 are promoting telework contracts, which already 3,613 2,969 1,923 1,328 At the end of 2013, Grupo Telefónica had amount to 11,320, 166.1% more than in 2012. 384 1,365 126,730 employees, with an average age of 408 39, of which less than 1% were managers. The best team
The workforce has increased by 4.9% in size (1) compared with the previous year due to an effort The best team is achieved through development Spain Brazil Peru Chile Mexico Others Ecuador Uruguay to increase organizational efficiency with the and recruitment of necessary qualities, according Argentina Venezuela Germany Colombia objective of maintaining Telefónica’s innovative to the needs of the company, and ensuring proper United Kingdom Central America capacity given the difficult environment that the attraction and diversity in hiring new talent. sector is in. (1) ‘Others’ includes operators from Telefónica in the U.S., Israel, Czech Republic, Ireland, Slovakia, Rest of Europe (the Netherlands, Luxembourg, Portugal, Brussels).
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Workforce distribution by age and gender
5,331 Employees >54 1,346
23,108 Employees 45- 54 8,836
25,827 Employees 35- 44 16,030
10,883 Employees 30 - 34 9,285
13,028 Employees <30 13,056
Men Women
Best practice
BE MORE_ Experience, an initiative that started on January 27 to volunteer to get in front of the cameras and talk about the and ended on February 21. The format was an MOOC (Massive Company’s transformation stories. Online Open Course) taught in four languages. A learning environment was created that encouraged participation allowing The broadcast of the channel through Yammer, Telefónica’s us to connect users from around the world, to a single learning and corporate social network, has the advantage of allowing direct knowledge initiative. By overcoming five challenges, over 7,000 interaction between all of the Group’s employees, facilitating employees from around the world were able to experience the conversation and enabling viewing from any device (computer, three attitudes, through comments, images, videos, and votes. tablet, phone, etc.).
Be More_ TV, a new communications channel that attempts The Be More_ programme has materialized itself in the to share with employees everything happening with the company transformation the company has experienced in its organizational with regard to Be More_: programmes, actions, attitudes... but, structure. This organizational structure is a complete response to above all, people. the 10 strategic priorities defined by the Be More_ programme. The objectives pursued through this new structure announced The first Be More_ TV programme was aired in January of 2014, in February 2014 can be summed up in: increasing our income, The adequate culture Challenges although the idea for its creation was conceived in September. modernizing networks and systems, increasing efficiency and The best people are capable of achieving the From the start it was conceived as a fresh, distinctive channel strengthening our leadership in the digital ecosystem. best results if they share the same principles ➜ Upon defining the new Company structure, that would provide a different perspective on things. With the on how to do things and understand that each announced at the end of February 2014, one of help of all the teams from Internal Communication and the In order to reach these objectives, the company has decided to of them have an important role in achieving the the department’s challenges will be achieving the participation of employees from around the world, Be More_ give local operators greater visibility, bringing them to the centre objective of any organization, which is no other best design of the areas in order to promote the TV has come to life and is now a reality. With improvised hosts, of corporate decisions, simplifying the global organization chart than achieving success and ensuring long-term transformation of Telefónica into a Digital Telco. fictitious poker matches and spontaneous appearances from and strengthening transversal areas to improve flexibility and sustainability. actors, there have already been many Telefónica employees speed decision-making. ➜ Ensuring the globalization of Company who have participated in the programmes and many more wish In 2013 we have focused our efforts on management by establishing three world hubs: transmitting the need for transformation to the Madrid, London and Sāo Paulo. entire organization, ensuring the employees’ commitment and alignment to our global transformation programme Be More_. For this Turnover* reason over 200 Be More_ workshops have Turnover 94% 38% 126,730 been held in 20 countries, with more than 120 2012 2013 of indefinite of the workforce employees in trainers trained. In total, over 13,000 employees 21.31% have participated in these workshops, with a Total turnover 18.54% 21.31% contracts are women the world satisfaction index of 9.2 out of 10. Voluntary turnover 15.13% 15.75%
* Entry of personnel into Grupo Telefónica + voluntary departures, dismissals, retirements or deaths x 100/average workforce in Grupo Telefónica in 2013 (not including Atento).
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responsible MANAGEMENT Result of the global survey on the work environment Labour practices: Dimension 2011 Dimension 2012 Dimension 2013 2010 2011 2012 2013 76 76 ICC* 79 Total 76 Working environment 78 global 79 78
86 Pride of 88 and commitment_ belonging 84 87 Telefónica 83 Latam 85 83 Keeping our professionals motivated is essential for achieving a 80 Leadership 82 high level of commitment and an excellent service for our clients. direct boss 82 71 Therefore we commit ourselves to align expectations and understand Digital 68 67 the problems and situations that can affect the work environment, 79 Client 82 which is fundamental for the increased sustainability of our company focus 80 Telefónica 75 global 78 resources 81 Daily 77 79 work 79 71 Telefónica, S.A. 75 72 and subsidiaries 76 Professional 75 74 path 73
68 Leadership 64 Telefónica 70 upper 69 Europe 73 manager 67 72
(*) ICC: Global Climate and Commitment Index.
Telefónica is Toward the end of 2013 we launched the With these results an analysis has been made management practices and policies of individuals The study considers the reputation of a good Climate and Commitment Survey, one of the following the Employee Effectiveness Framework, from the companies. company to be based on three values: employer among the most important tools that we have for learning where two variables are combined: commitment brand, internal reputation and work quality. the opinion of all of our employees on various and preparation. This allows us to perform Being for the third consecutive year among the Telefónica has good assessments in the three Top 10 large aspects of the organization. Thanks to the results a departmental study and thus implement 20 best multi-national companies in the world to scopes, but it is in the last where we show our obtained we have been able to learn of and specific measures for improvement, to result in work for (No. 16), this is undoubtedly a privilege, greatest strength, acknowledging ourselves in companies in the promote potential lines of improvement in each an increase in employee satisfaction, focusing but also a challenge for Telefónica: to show on a the market as one of the companies with the best world for offering area that integrates Telefónica, S.A. on each variable based on the result obtained in daily basis that we are deserving of this award. working conditions. the department. At Telefónica we know that the its employees The last edition had the participation of 92,550 actual benefits of performing surveys on Climate Telefónica Spain Top 10 of the 100 The methodology of MERCO Personas present the employees, which represents a 79% participation and Commitment are produced when employee best companies to work for in Spain assessment from different opinion groups like the best work and an increase of over 10 points compared feedback becomes actual actions. VIII Edition of the MERCO Study People, Business university students about to finish their degrees, environments with the survey performed during the previous Monitor of Corporate Reputation. business school students, the general population, fiscal year. Great Place to Work® (GPTW) experts in human resources or workers. Along this same line, during 2013, Telefónica As a result, the 2013 Global Climate and In 2013 Telefónica once again occupies high España continues to be in the TOP 10 of the Commitment Index (ICC) —which is uniformly positions on the best places to work lists, that 100 best companies to work for in Spain, applied in the Group — has remained high, are drafted by the Great Place to Work® (GPTW) occupying eighth place on this list, according to reaching 77.7%. It should be noted that the most institute, being the international benchmark with the information in the VIII Edition of the MERCO strengthened aspects are image and pride of over 25 years of experience in the analysis and Study. People, Business Monitor of Corporate belonging, by 87%, as well as the dimension of assessment of work environments. To perform Reputation, an institution that performs a study leadership by the direct supervisor, by 82%. its rankings, the institute takes surveys on the every year. work climate among employees and analyzes the
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Comparison of participation and ranking development over the last five years: Great Place to Work
2009 2010 2011 2012 2013
Four companies from among Eight companies among 2nd place GPTW Latin 2nd place GPTW Latin 4th place GPTW Latin 100 GPTW Latin America 100 GPTW Latin America America America America
1 Uruguay 1 Venezuela 1 Nicaragua 1 Panama 1 Venezuela 1 Ecuador 2 Ecuador 1 Uruguay 1 Venezuela 1 Ecuador 1 Venezuela 2 TM Colombia 1 Venezuela 1 Uruguay 2 Colombia 4 Chile 2 Ireland 2 Ecuador 1 Ecuador 2 Panama 4 TM Colombia 3 TM Argentina 3 TM Argentina 2 Nicaragua 2 Nicaragua 10 Telecom 6 Telecom 4 El Salvador 3 Chile 5 Germany 11 TM Argentina 7 TISA 4 Chile 3 Colombia 7 El Salvador 11 CAM 8 CAM 5 Colombia 3 Germany 7 TGSC Argentina 13 TM Peru 9 Chile 5 Panama 4 TISA 8 Guatemala 18 TSC 10 Mexico 6 Ireland 6 Ireland 10 Argentina 25 Mexico 13 TM Peru 8 TISA 7 El Salvador 10 TGSC Peru 41 TASA 17 TSC 11 Guatemala 8 United Kingdom 13 T. Vivo 12 TASA 9 Argentina 15 Costa Rica 13 Mexico 11 TGSC Argentina 15 CAM 13 TGSC Peru 12 TGSC Peru 16 Peru 14 TGSC Argentina 13 Guatemala 17 Mexico 15 Peru 18 Mexico 22 Vivo 18 Vivo 78 Telesp 18 Peru
Telefónica has Reconciliation human resources policies, training and how the ➜ Age. It challenges the idea that part-time work is Telefónica Germany: ‘Beruf und companies communicate their family friendly only for junior roles. Familie’ Audit and certification been externally Telefónica UK: Mumsnet policies to their employees. Telefónica Germany has a certificate for its acknowledgement of our family friendly ➜ Inspiration. Stories that open new roads or which family human resources policy (called ‘Beruf acknowledged for policies. Silver accreditation. Power Part Time List. Milica through personal interest are a model to be und Familie’). The certificate is granted by Telefónica United Kingdom has been recognized Gay named in the Top 50 followed by others. the berufundfamilie Service GmbH, under the its reconciliation in 2013 with the Mumsnet silver ranking for The Power Part Time list is managed by TimeWise sponsorship of the German Ministry on Family in the United the second consecutive year. Mumsnet is the Foundation. The TimeWise Foundation, is formed ➜ Success. Evidence of advancement or significant and Economy. It is an accredited seal of quality largest online network in the United Kingdom for by three companies: Women Like Us – a social achievement since starting part-time work. for staff policies regarding family. The audit is Kingdom and parents, generating 60 million page views and company that supports women in reincorporating based on interviews with employees, managers, 10 million hits per month. Mumsnet invites large themselves into the work world after the Milica Gay, employed in Telefónica United as well as the company committee. The Germany companies to join its Family Friendly programme. maternity period, especially for part-time Kingdom, appears on the Power Part Time reconciliation of family and work is an important, Under this plan companies can highlight the employees with employers that value their skills 2013 list. Milica manages a series of projects thus Telefónica Germany wishes to be measured. internal actions implemented in relation to and experience - TimeWise Jobs (online leader in at Telefónica in the United Kingdom, being In general, the award also acknowledges, the maternity/paternity leave, flexwork, etc....as the United Kingdom for job searches dedicated responsible for the launch of products and joint development of diversity and aid to critically well as, if relevant, what products and services entirely to temporary jobs and ‘flex’ jobs) and ventures worth millions of pounds. Admitted reflect on existing measures. This certificate, also they offer to families. The awards were created TimeWise Recruitment, a temp agency for to O2 (Telefónica United Kingdom) in 1999, is positively influencing the position of Telefónica to acknowledge companies for their contribution candidates with experience looking for workplace initially working in the Mobile Banking Area, Germany, on the ranking prepared by the Great to family friendly policies with bronze, silver and flexibility. having started her degree in a postgraduate Place to Work institute. gold categories. The assessment is based on the programme of Lloyds TSB. As the mother of three internal analysis of family friendly practices and The Power Part Time list comprises 50 business children, Milica works part-time, in order to spend through secret shopper actions by the team of leaders selected from a wide range of candidacies more time with her family while handling her Mumsnet users, which cover criteria including and reflects key selection criteria: professional concerns. customer service, quality-price relationship,
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responsible MANAGEMENT The Digital Race is a voluntary, fun activity that ➜ We achieved the highest number of participants takes place on the platform Yammer, and in which in the history of Universitas Telefónica (4,610 collaborators from each country form teams to employees), in addition to a reduction of 2% in Labour practices: Training take on different challenges that give them a our budget, thanks to the collaboration of internal chance to show off their knowledge and skill with speakers. We have speakers from the Executive and talent management_ digital tools. Committee, internal coaches, managers and sponsors. In 2011, only 5% of our facilitators During 2013, a total of 2,607 collaborators from were internal, while in 2013 we reached 55%. Talent is a global asset, and the development of our personnel is a basic different countries of Latin America participated in this initiative, helping to drive digital culture ➜ We achieved better ratings than ever: 4.6 out of pillar on which to build the sustainable transformation of the company and forward in the region, and to show our people that five, for average rating of the programmes, and attain digital leadership. Our experience shows that development plans have they are the leaders of the digital revolution that 4.8 out of 5 for the overall campus experience. a positive impact on the motivation, commitment and loyalty of employees, is on-going in our industry and the world. ➜ Leadership For Change as well as their productivity Yammer has also established itself as a tool for global collaboration within the Group. This ➜ Leading Self technology (Enterprise Social Network) is provided to our employees to facilitate transversal ➜ Leading High-performing Teams collaboration, allowing the sharing of information and knowledge contributing to the transformation ➜ Global Professional Skills. New of processes in our company. It is open to all employees in every market and they can create ➜ AMP. New international online communities as they wish. During 2013 Training and staff development in Telefónica The process of training puts special emphasis on ➜ Engaging Realities is included in a cycle that begins with setting the needs of each department, to support all the Universitas Telefónica more than 2.9 objectives, continuing with the assessment of initiatives of transformation, internalisation and ➜ Customer Focus performance and finishing with the design of a simplification which are identified, and this allows Universitas Telefónica is the meeting place for million training personal development plan. us to advance with the transformation process in our professionals, where they live and breathe ➜ Global Management Programme the Company. the culture and values of Telefónica, while they hours were given During 2013 over 2.9 million hours of training share concerns and points of view in training ➜ Innovation & Creativity in the Group were given in the Group. Training opportunities In 2013, over 9,000 employees were trained programmes. This initiative comes out of our at Telefónica are structured by means of within the transformation training framework commitment to the training and development of ➜ Postgraduate Course in Business Telecoms different tools: classroom training (Universitas at Telefónica Spain, and more than 290 courses our professionals. and specialised courses) and online training and 183,996 hours of classes were given. The ➜ English Week (e-learning programmes). students’ evaluation of the perceived quality of Thanks to the programme design, we reached the courses was eight out of ten. the figure of 4,610 employees trained in 2013, ➜ Spanish Week At a local level, individualised training plans are or 64.8% more than in 2012, with 55% of the devised, generalising the use of the 70/20/10 Among the most relevant initiatives, with the teachers being Telefónica staff, compared to only Universitas Telefónica was a winner of the methodology, where we encourage training and biggest impact on the organisation, was the new 5% in 2011. In total, there were 43 editions of 12 VIII Garben Training and Business Awards, in development techniques like swapping jobs, territorial model for the call centres and the new programmes: recognition of its role as the meeting point for international mobility, project-based work in network supervision assistance model. the Company’s best professionals, not just from groups, and mentoring schemes as alternatives to Milestones Spain, but from all our European, American and traditional classroom-based education. Similarly, the Telefónica Schools were launched, Asian teams. which cover material organised into six areas: ➜ We launched Universitas Offshore for in-person The term ‘70/20/10 methodology’ means Leadership, Finance/Legal, Technology, Sales, training at off-campus locations: China, the United The Garben Training and Business Awards were that 70% of training should be received in Languages and Internal Teachers. In addition, Kingdom, Ireland, Brazil, Peru and Germany. instituted in 2005, with the aim of recognising the workplace, through real problem-solving the whole training management model has been and stimulating the efforts made to improve the experiences, this being the most important integrated into the same platform that supports skills and capabilities of workers. These prizes aspect of any development plan. Another 20% the schools. of the development comes from feedback, observation and role exchange. And the final 10% In Latin America, the Digital Race or Marathon comes from formal education in courses and initiative was launched, within the overall project classroom learning. to make employees more digital, and its objective is to speed up the transformation of Telefónica The model used by Telefónica Spain allows the into a Digital Telco, giving our collaborators access creation of a dynamic Training and Development to the Internet and smart devices, generating 30,554,188 2,983,665 23.54 Plan, which is adjusted during the whole year, digital experiences for training purposes and Euros: total spending on Total hours of training Training hours per yielding much better responses in time and form promoting the use of digital services and tools. to business needs. training in 2013 employee
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* Staff training Training hours/employee * Calculated using 70/20/10 methodology Spain 31.5 Classroom Germany 30.2 training 10% UK 9.4 Argentina 28.2 Training Brazil 8 arising from feedback Hours Chile 31 20% received Colombia 24.4 2.9 in the million workplace Ecuador 47.9 hours 70% Mexico 11.8 Peru 7.8 Uruguay 34.7 Venezuela 18.9 Cent. America 20.7 Others 45.7
During 2013, underline the work performed by institutions, who their manager is), and course availability During 2013, we had 176,429 students, 460,320 Talent management companies and individuals of different categories data (colour codes to denote numbers of free inscriptions in training activities, representing an we had 176,429 related to continuous training. places). increase in penetration of over 98% compared to Talent is a global asset, and at Telefónica the results of 2012: that is, in 2013, the number we boost it through benchmark training students Corporate e-learning (a+) ➜ Consolidation of the e-learning model, with of students who benefited from a+ training programmes, promoting diversity and facilitating and 460,320 47,109 unique users and 382,982 accesses in the activities doubled, thanks to the rise in the use ways to achieve a work-life balance. Developing The e-learning range is a fundamental lever corporate schools. The number of unique users of the platform in regions such as Latin America the talent of our employees, giving them registrations for of training that aims to boost the digital grew by 62% over 2012 (29,017). and Europe, with nearly 25,000 inscriptions more opportunities of personal and professional development of our professionals with a more than in 2012. development, and supporting their personal training actions dynamic and collaborative training model, with a ➜ Implementation of: growth constantly with the distinctive single access for all users, and which emphasises The data show that user interest has shifted opportunities at Telefónica. students’ self-development. ➜ The Spanish School, which went from significantly towards synchronised in-person 13,882 accesses at its launch in July to training by means of the a+ platform’s Virtual The evaluation of talent lets us have a map of Principal e-learning achievements in 2013 23,240 in December. Classroom tool, which accounted for 98,528 hours the management talent of the whole Company, in 2013, an increase of 91,266 hours over 2012. as well as a structured succession plan. This is ➜ New tools were put into service that allow ➜ Design and implantation of global content a fundamental tool of differential management broader management of in-person training of strategic utility for the whole Company, This, allied to excellent results in the number of and boosts a meritocratic culture which should (classroom and speaker logistics, validation of like Get to know Telefónica and the telco hours of training received through the resources of facilitate decision-making on aspects such as inscriptions, permission for training managers to sector, which combines the content of Get to the corporate schools (176,350 hours), indicates development, organisation, pay, etc. In 2013, include ratings or close events), an improvement know Telefónica and Engaging Realities. a change in user preferences towards more the talent of more than 80% of all managers was in the display of student profiles (showing data immediate, individualised and up-to-date training. assessed. such as who registered them for the course and
‘Universitas’ and ‘e-learning’ training programmes
176,429 460,320 382,982 4,610 43 e-learning students registrations for training ‘e-accesses’ to employees were trained editions of 12 activities corporate schools in 2013 programmes
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Group meet its strategic targets, and they are the category Organisational Management and The creation of aligned with the real situation of the Company. Consultancy and also a distinction in the Retail The ideas proposed are evaluated by the selection Sector. The real protagonists of the success a talent map for committee and the finalists defend them in oral of this initiative have been Telefónica Spain’s sessions which take into account aspects like own professionals, who are acting as the best the Company originality, business impact, strategy and viability. ambassadors for our brand at the personal level, and have increased the satisfaction and loyalty of is fundamental Cegos Award for the ‘A better customers. in boosting the business team’ initiative For Telefónica Spain, people have always been With this award, Telefónica Spain is meritocratic a priority and so in 2009, the initiative A better acknowledged yet again as a benchmark for business team was launched, aiming to convert all projects that add extra value in the marketplace. culture employees into ambassadors for our brand and Movistar products, boosting pride in belonging to the Company, and rewarding employees for their commercial effort.
Telefónica Spain received two prizes for this initiative in the IV Edition of the Cegos and E&T Awards 2013, for the Best HR Practices in
Best Practice
The strategic focus on the digital development of our employees In its 2013 edition, TEDx Telefónica São Paulo had 100 live means that training is more dynamic and collaborative, that it participants and over 3,200 online connections. is better organised, that it has a single access for all users and e-learning is On a different track, the evaluation of employees of big companies all over the world encourages students’ self-development, while in addition it In 2014 there will be a new edition, this time in London: TEDx competencies we are driving for over 23,000 (137 of them from Telefónica). Participants were simplifies the entire training process. Telefónica London. the lever to staff at Telefónica Spain should also be noted. asked to identify three companies, of any size or This process encourages the transformation sector, at which, in their opinion, leadership in the TEDx Telefónica São Paulo Smart Week boost the digital programme Be More_ evaluating the attitudes organisation is best developed. In the 2013 study, we want in the Company (Discover, Disrupt Telefónica was ninth in the world and seventh in In 2013 the second TEDx Telefónica event took place. While Smart Week, also known as Innovation Week or Be More_ training of all our and Deliver) for the entire workforce and also Latin America. the first edition was in Madrid, this new round took place in São Week, is a massive event for collaborators in which voluntary professionals assessing the business competencies of those Paulo. For Telefónica, this experience was an opportunity to workshops are offered on subjects such as creativity, innovation, groups following professional careers. The Telefónica Spain gather the workforce community under a global transformation entrepreneurship, the digital world, technological advances and process starts with a self-evaluation by each initiative, by means of knowledge and dissemination of ideas. marketing. person (86% of these completed), and an Idealab Innovation Programme Innovation, proactivity, technology, teamwork, responsibility evaluation by each manager (93% completed), Telefónica Spain continues to boost the spirit and growth were the keys to the presentations at TEDx The initiative was created seven years ago in Argentina, concluding with an evaluation interview of innovation among its staff through the Telefónica São Paulo. and since then it has also been held in Spain and other Latin between the manager and collaborator (82% programme Idealab which gets public awards American countries like Colombia, Uruguay, Venezuela and Chile. of these were completed). This initiative year after year. On this occasion, it was through Under the banner Opening up to all the possibilities of encourages communication, conversations about the TVE (Spanish state broadcaster) programme Technology, the agenda for the session was divided into four Each operator combines this initiative with other activities development and feedback, between managers Aquí hay trabajo (There’s work here), which blocks of talks. Citizen access: service evolution and social impact; like Torchbearers of Innovation, workshops for generating of people and their teams. dedicated part of its item Intraemprendedores ¿What is novelty and how does it arise? Creativity as instinct and ideas, ideas banks (Eureka), I-Tours, schools of innovation and (Between entrepreneurs) to Idealab, highlighting exercise; Technology and development: a tool for our generation creativity, ideas competitions, and so on, in such a way that the Awards the involvement of Telefónica’s professionals, who, and finally, Current issues: What makes today’s world stop and different programmes are integrated into models of innovation encouraged by the Company to which they belong, start? The speakers at TEDx Telefónica were chosen mainly from that encourage collaborators to offer ideas that will improve the 2013 Best Companies for Leadership or BCL develop innovative projects and receive a prize. the employees themselves, who made their own conference way we do things, and to propose new products or services that The BCL assessment classifies the best proposals to share with the rest of the Company, nine of will generate value for the business. companies in terms of leadership, looking at how The (Idealab) programme has the structure of Telefónica’s local employees in São Paulo having been chosen. they encourage talent and innovation. In 2013, four challenges, in four batches during the year. research was carried out among over 18,000 The objective of the challenges is to help the
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responsible MANAGEMENT Labour practices: Attracting and retaining talent_ Finding and attracting talent is a high priority at Telefónica. The innovation strategy backs ideas, young talent and enterprise
Attracting talent In 2012 Talentum Universities granted 569 fellowship while in 2013 were 217. At the end of During 2013, Telefónica aims to attract young talent, which is the 2013 edition, Telefónica hired 557 fellowship Telefónica indispensable in a sector as dynamic as ours. So, in 2012. during 2013, within the Talentum programme, contracted 5,700 5,700 under-30s were hired across theTelefónica Likewise, and aiming to attract digital profiles and Group, and the criteria for selecting them included fill posts in the area of technology and marketing, young people their ability to anticipate the challenges of change, we launched two digital talent search platforms their interest in the customer and their ability to in 2013. under 30 years work in teams. of age ➜ ‘Digital Jobs’ external portal. All the vacancies Into Talentum Universities, Telefonica Spain of the Telefónica Digital division were accessible and in collaboration with the Foundation SEPI online. 120 specific profiles were hired for the has a long-term fellowship program duration, 12 Telefónica Digital division. months, aimed at young graduates university up to 30 years of age facilitate their integration into ➜ ‘Digitalent’ internal portal. This is the the labor market, through practical training. The first global website with listings of internal fellowship is developed in Telefónica Spain with vacancies at Telefónica Digital, and also has the a possible later incorporation into the company vacancies at Telefónica Europe and access to as permanent employment if their practical the global website of vacant posts in the whole training is satisfactory. So far I have made 96% Group. The site is being used by the global participants performed in 2013, 557 hires. recruitment teams. It also includes sections on CV improvement, and on techniques that can be used at job interviews.
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Growth in international mobility of employees Internal transfers
9% Current Accum. mobility 34 Global/Long term 156 213 139 Global/Short term 22 58 127 -17 -5 Development Short term 92 260 114 109 Subsidiaries 2 14
Graduates 2 26
European Rotation Programme 18 28
International Rotation Programme 70 192
Permanent maves 2013 162 207
International transfers 71 99
International new hire 8 18
Local 83 90
Total 432 738 July 2010 July 2011 July 2012 New Returns Relinquishments June 2013 expatriates
Awards Retaining talent be the principal source of information for taking Telefónica was the regional winner in the Thames International In 2013, we consolidated the global target decisions when it comes to internal promotion. Telefónica Global Valley as Macro Employer of the Year for our Telefónica was mobility gives fulfilment measurement model, distinguishing Talentum programme. In recent years we have top-ranked in between performance and potential, and Talent mobility 2013 Fortune’sWorld’s Most offered an apprenticeship scheme which was people the combining it with variable incentives. The For Telefónica, international mobility is a critical Admired Companies or WMAC mainly a small technological niche programme 2013 as the most performance model not only evaluates issue, to guarantee that the workforce has the Telefónica is the most admired non-US company based in the operational area of our business. knowledge the compliance with objectives (What) by both the knowledge and capabilities necessary to tackle in the Telecommunications sector. admired non-US Company and individuals, but also the How of the challenge of converting the Company into a However, in 2012 we put our new Talentum Company needs their achievement, and in 2013 we used the Three global organisation. Mobility not only consolidates For the last 16 years, Hay Group has been initiative into effect, which integrates the telecoms sector to be a global Ds defined in the transformation programme Be the feeling of belonging to one single company; collaborating with the magazine Fortune to apprenticeship programme into a much broader company More_ as elements in the evaluation: it also helps to develop leadership capacity identify and classify the most admired companies project that offers multiple career choices for organisation and store up experiences which will facilitate in the world. To compile this ranking, interviews new and promising apprentices. With the creation ➜ Discover. We have always been aware of the intercultural understanding and collaboration. of over 15,000 managers and financial analysts of our Talentum programme, we have improved importance of being centered on our customers. These are qualities of particular utility when it from 687 selected companies in 30 countries our earlier scheme, focusing it on other business But now, in the digital world, this is the moment comes to taking on international acquisitions, were carried out, so as to find out which company areas of the Company such as sales and service. to discover what they need. negotiating alliances or opening up new markets. has the best reputation within each sector. The This has also given us the chance to explore joint analysis takes nine attributes of reputation businesses, by including the apprentices within ➜ Disrupt. We are ready for change and constantly During 2013, Telefónica implemented a uniform into account. our Tesco Mobile team. These fundamental looking for new ways to better harness our international mobility policy in the whole Group, changes have given rise to a growth of 300% knowledge of the digital world and our spirit of offering an international professional career to Telefónica was top-ranked among non-US in our number of apprentices since the start openness. Disrupt means to improve the rules of employees and helping to attract and retain the telecoms sector companies in 2013, having of 2012. the game so as to generate more value for our right people. improved since the previous year in the category customers and for Telefónica. of Attracting and Retaining Talent. This policy includes four international mobility ➜ Deliver. We take full advantage of our global options: Global Long Term, Global Short Term National Apprenticeship Awards - Regional presence while remaining agile, letting us keep and Development Short Term, which have been Winner: Macro Employer of the Year our commitment to take technology to people. designed for temporary international transfers. International Local Hire has been designed These awards acknowledge excellence, both at In 2013, over 80% of managers were evaluated for permanent transfers from one country to companies which increase their own talent pool by following this model. another. Each option has its own independent using apprentices, and by apprentices themselves access requirements, duration, remuneration and who have made a significant conribution to their Currently we are undertaking a process of benefits packages. workplaces. Management Review for all managers so as to give us a global picture of our talent, and which will
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RESPONSIBLE MANAGEMENT Labour practices: Fair pay and performance recognition_ At Telefónica, the on-going need to innovate, whether in products, services, processes or people, is growing at the same speed as the transformation of the business. At the core of the transformation are the employees, who must be motivated, attracted and retained, by means of the correct model of recognition that incentivises change
The highest The commitment of Telefónica to its employees 2. Compensation for meeting business and is included within our Business Principles, individual targets governing guaranteeing fair remuneration in accordance Telefónica recognises a variable component with the labour market in which our operations linked to fulfilment of objectives in its body for the take place. remuneration policy,. This variable pay will be remuneration calculated annually as a percentage of the base Principles of the remuneration policy salary, a percentage linked to the fulfilment of policy is the objectives by Telefónica Group, and another 1. Concept of Total Remuneration linked to the targets of the region and/or country. Nominating, At Telefónica Group, we use the concept of Each person responsible for a team will also be Total Remuneration, made up of the sum of responsible for assessing compliance with targets Compensation pay (base salary, variable pay, sales incentives in their area, seeking to maximise the differences and Corporate and long-term benefits Equity programmes), in distribution. benefits (pension plans, holidays, life and health Governance insurance, company car), career development 3. The correct balance between a global and opportunities (training programmes at the remuneration policy and alignment with the Committee corporate university Universitas, online training local practices of each market platform A+, possibility of international mobility, Telefónica has a Global Remuneration Policy recognition programmes (RecogniseD, launched whose objective is to achieve uniformity and as a pilot in the UK) and the culture of Company alignment in the remuneration practices social programmes through the Telefónica throughout the Group; in their turn, local Foundation, the Proniño programme, teleworking remuneration teams ensure alignment with and the work health and welfare campaigns. local practices. We have single providers for all 4. A clear model of governance in an equitable way), and the business markets, and the retention programmes launched The highest governing body for the Telefónica circumstances of each operation. are of global application. Remuneration Policy is the Nominating, Compensation and Corporate Governance In 2013, we consolidated the global target Committee. Its duties are centered on fixing fulfilment measurement model, distinguishing the remuneration of the Chairman, Managing between performance and potential, and Director, Board of Directors and senior managers combining it with variable incentives. This model of the Company. of performance measures not only fulfilment of (Local currency) Minimum salary Minimum TEF entry salary targets (What) of the Company and individuals, The Executive Committee of Telefónica approves but also the How, that is, whether they were Brazil 678.00 983.40 the budget item for salary revision, the global achieved using the 3Ds or attitudes defined in Peru 750.00 2,800.00 Remuneration Team being responsible for the Be More_ programme, as elements in the Chile 210,000.00 455,670.00 ensuring correct definition of local budgets. So, evaluation. this team uses macroeconomic data for each Mexico 1,942.80 8,000.00 country (inflation, growth and unemployment), Within the notion of total remuneration Colombia 589,500.00 1,140,000.00 salary surveys (using a single provider for all mentioned above, employee action plans play an UK* 6.31 6.70 countries, together with specific information for important role, because they align their interests some markets with special features), analysis with those of shareholders and at the same time Germany -- 2,073.67 of internal equality (monitoring pay for posts generate a more direct sense of belonging, and Spain 645.30 1,380.00 that are comparable in terms of duties and involvement in the results of the Company. Our responsibilities through salary structures that long-term share incentives philosophy seeks * Wage per hour. help to analyse and maintain salary differences to reach all employees of the Group all over
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In 2013, just as the world, at all levels of the organisation. So, ➜ Flexibility, as it fits in with employee personal and During 2013, the recognition programme in which managers, vice-chairmen or members It is of vital different plans based on the shares of Telefónica family needs at each moment. distinguished over 3,000 people distributed of the Board of each operator recognise project in previous years, have been put into operation: along these three axes. Under teamwork, four teams that have achieved important milestones, importance for ➜ Convenience, as the choice of suppliers, main transversal projects and workgroups at special events. the employee ➜ Global Employee Share Plan (GESP). Under negotiation and management are all done were identified as key to the transformation of Telefónica to could opt this plan, for each share that employees through the Company. Telefónica, with over 300 members in total. For The scheme also includes a regional award, in encourage and purchase and retain until the end of the vesting exceptional action with our customers, nearly which the three best projects of each country (one voluntarily for a period, Telefónica gifts another share as Awards 900 professionals were rewarded or recognised. for each D) compete to be recognised as the best drive the culture compensation. Over 25,000 employees have And along the more personal axis, nearly 2,000 under Deliver, Discover or Disrupt for the region. flexible plan that registered for the second edition of the scheme; It is of vital importance for Telefónica to people were recognised and congratulated. of recognition bearing in mind that 70% of those registered encourage and drive the culture of recognition The results of the Be More_ programme are adapts their pay already participated in the first round, this among its professionals. In Latin America, a recognition programme presented in public, and the winners get coverage among its to their personal demonstrates the success of the programme, has been established, which boosts individual in different national media of each country, so professionals as well as the confidence of employees, who Recognise_D is the recognition scheme that commitment and collaboration among work that they feel proud of their achievements and and family needs continue to invest in their Company. Telefónica Europe introduced in 2013. This teams, and reinforces the Be More_ attitudes, are motivated to carry on with efforts that let scheme is intended to evaluate the commitment because the behaviours worthy of awards are them Be More_. ➜ Telefónica, S.A. long-term share incentive of employees in terms of the three attitudes aligned with the three D’s: Discover, Disrupt, Deliver. plan: Performance and Investment Plan of Be More_: Discover, Disrupt, Deliver, by (PIP). Aimed at executives of high potential acknowledging work well done with recognition of This initiative includes both daily recognition, and performance in the Group, this is designed their commitment to transformation. in which any collaborator may recognise their to incentivise and remunerate development of colleagues or leaders, and differential recognition, the individual and the Company, and to boost Recognition comes from colleagues, who can use commitment to the Company’s results as both a simple tool to praise those whose daily work employee and shareholder. attitude is a good fit with the three Ds.
➜ Restricted Share Plan (RSP). A new long- This initiative, which is part of the recognition term share incentive plan has been put into scheme in the countries and regions, started effect, the so-called Restricted Share Plan (RSP). in the UK, where, after three months, there are This is a flexible tool for recruitment from the 2,500 active users, 3,300 recognitions have external market, and it is useful for retaining been made, and 333 images, 1,895 likes and 60 key personnel in new acquisitions, making them comments have been uploaded. participants in the Company through rights convertible into shares. The application is simple to use, whether from PC, tablet or smartphone, and it includes some Telefónica Spain, just as in previous years, made social network features. To use the tool, it is a personalised remuneration system available only necessary to have a user account on the in 2013 to its employees, under which part of Telefónica Enterprise Social Network (Yammer). their fixed salary can be voluntarily allocated to Recognising a colleague is very easy: text the subscription of a series of products and/or explaining why or a short video is sufficient. The services. This meant that employees can adjust colleague receives a the praise immediately. their pay to their personal and family needs at each moment. The current model at Telefónica Spain, which began to be used in 2009, has evolved and been Contracting these products allowed employees adapted along three principal lines: the first of to raise their net disposable income, thanks to these is based on Company, boosting the culture the more generous treatment of the products of teamwork, transversality and alignment; the for IRPF (personal income tax) purposes and the second is Customer, which identifies those people more favourable economic conditions obtained who have gone the extra mile for our customers from the Company. This flexible benefit plan has and are ambassadors for our brand; and the third, clear advantages for employees. People, recognises the behaviours and attitudes of individual employees who make a difference. ➜ Fiscal optimisation of total annual pay, thanks to current IRPF regulations.
➜ Savings from getting services and products at lower cost because of economies of scale (purchase at the Company and/or Group level).
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responsible MANAGEMENT the Company envisaged in the Social Plan, contribution to the Pension Plan), measures always following the principles of willingness, to guarantee employment were adopted, and At TdE, the Labour practices: Freedom of universality and non-discrimination. Thus, in the equal opportunities plan was agreed along Collective 2013 the total agreed number of redundancies with a protocol to prevent bullying and sexual (over 6,800) for the authorised reduction in harassment of Company workers. During 2013, Agreement association and social dialogue_ employment was finally attained. Similarly, and just as in the other regions, work on ensuring a and during the period of validity of the ERE, stable work framework took place in the collective 2011-2013 has the commitments to create employment laid bargaining process in all the companies. The Our Business Principles include the right for employees to belong to the out in the Social Plan itself were surpassed, principal achievements of 2013 are: been extended trade union of their choice and we do not tolerate any kind of reprisal or approximately 1.000 hires. ➜ to the end of hostile action towards those who participate in union activities Colombia: elections for Company and worker Telefónica Móviles España (TME) representatives to the occupational health joint 2014, allowing In April 2013 the VI TME Collective Agreement, committee and the community committee agreed by the majority of the worker were held, the UNO programme - which covers progress in the representatives, was signed, and it aims to: Company benefits - was consolidated, so as to facilitate work-life balance, and there were transformation Collective bargaining in Europe Telefónica Spain (TdE) ➜ Give TME its own legal personality, providing elections for staff representatives. Work was also There was major In the first quarter there was a modification a stable work framework in the short/medium done on unifying internal policies and procedures necessary within progress in Telefónica Europe has a European Works of the current Collective Agreement (2011- term, with guarantee of employment. following the fusion of the fixed and mobile a framework of Council (EWC) which informs and consults the 2013) by which the Company and employee businesses in 2012. 2013 in collective employees to promote dialogue and exchange representatives signed an accord to extend the ➜ Align the industrial relations framework at TME work stability opinions on transnational matters. Each Operator Collective Agreement 2011-2013 to 31 December towards convergence/integration with TdE, by ➜ Peru: collective agreements were reached bargaining, Business (OB) has a specific number of workers’ 2014. This accord permits progress in the adapting the professional classification model. with each trade union individually (four in representatives chosen specifically. They are transformation necessary within a framework the fixed business and three in the mobile based mainly selected in accordance with the law or practice of work stability, a key aspect of the negotiation ➜ A classification model for jobs based on part). A collective agreement of four years’ on meeting in their respective countries. From among those process guaranteeing, on the one hand, a pay rise notional standard types. duration was also signed with the Federation nominated, the EWC chooses a Chairman, at of 1% for 2014, and on the other, a reduction in of Communication Workers of Peru, and new the strategic present Christoph Braun (Germany), and a labour costs through the suspension for 15 months ➜ Formalisation of principles of action of negotiations with the Telefónica Workers’ Union Secretary, a post currently held by Angie Prangall of the contribution to the Pension Plan and Life the future TE classification model. and those of the telecommunications sector were targets set (UK). The European Works Council has 10 workers’ Assurance Policy, and a better fitting of the Social opened. representatives: one in Ireland, five in the UK and Funds to the current workforce. Through these ➜ Incorporation of TME sales staff to the four in Germany. measures, progress has been made towards the converging sales career track. ➜ Argentina: the mobile telephony Collective efficiency and productivity targets. Agreement was signed, and is the most flexible Furthermore, the European Works Council ➜ Adapt of salaries by containing and rationalising on the market; a pay agreement was reached appoints 5 people to a Special Committee (SC). In this same context, the conventional salary costs (suspension for 15 months of the with all the unions, and financial agreements This Special Committee meets with Telefónica’s commitments of the current Collective Agreement contribution to the Pension Plan) were reached with the three unions UPJET; OSTEL Central Committee in order to discuss matters were met, and important agreements were and FOEESITRA. In addition, the pending career of greater urgency, such as the preparation of a reached with worker representatives on aspects ➜ Progress on converging working conditions. path agreements were signed (with FOETRA/ new agreement for CER after the expiration of which were key objectives for the Company: FATEL and CEPETEL), so that all the unions now the existing one. The European Works Council ➜ Progress on matters of work-life balance (age of have career paths based on merit and work meets every 6 months to discuss transnational ➜ Shift modification agreement for the SME Call minor entitling employee with legal responsibility enrichment. issues and all matters raised through Telefónica Center. for same to reduced working day raised to 12). Europe. These are generally to do with changes ➜ Brazil: Integration of the employees of TVA of organisation and structure, the economic ➜ Approval of the Functional Mobility Agreement, to Telefónica Soluciones (TSOL) (segment -TV) of Telefónica in Brazil, implying the and financial situation of Telefónica Europe, meet the need to adapt the current Professional Along the same lines, in 2013, the TSOL Collective Agreement with the same parameters the introduction of new working methods and Classification model to define the organisational Agreement was signed, by which, together and the scope of the concession telephones policy technologies, fusions, transfers, workforce spaces, the procedures and criteria applicable for with the measures to contain and rationalise (logistics and distribution orders), revision of the reductions, or social and human resources policy, developing functional mobility in our Company. salary costs (suspension for 15 months of the model of unified work contracts for management, including health and safety and equality of contribution to the Pension Plan), measures administrative, commercial and office premises, opportunity. ➜ The Availability Regime for Customer Service in to guarantee employment were adopted, and negotiation of the voluntary retirement package Operations and Network has been modified to the equal opportunities plan was agreed along with workers’ unions (in March and October) the Collective bargaining in Spain meet the strategic productivity and efficiency with a protocol to prevent bullying and sexual PPR (profit participation) agreements, and the targets that let us maintain stable employment harassment of Company workers. database. During 2013, there were important advances in all over the country. collective bargaining based mainly on compliance Collective bargaining in Latin Worker representation on Joint Health and with strategic targets set by the Company on Likewise, during 2013 the Agreement reached America Safety Committees the adoption of efficiency measures, raising with workers’ representatives on the ERE The health and safety model established in the productivity and controlling labour costs, within (redundancy plan) 2011-2013 concluded its Along the same lines, in 2013, the TSOL different regions of Telefónica boasts a high level of the framework of dialogue and social partnership. life. During its period in force, this system Agreement was signed, by which, together representation and participation by workers through Among the most significant challenges with offered Telefónica employees the possibility of with the measures to contain and rationalise the corresponding Health and Safety Committees in impact on the Company strategy are: accepting voluntarily the conditions for leaving salary costs (suspension for 15 months of the all Telefónica’s regions.
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responsible MANAGEMENT Labour practices: Health & safety_ The health, safety and wellbeing of our employees constitutes one of the principal lines of attention and action by the company, which is implanted through the occupational health and safety management system
Telefónica The most important lines of action on matters of Operations, etc., as well as with representatives of Health promotion occupational health and safety during 2013 were: the other companies of the Telefónica Group. during 2013 guarantees OHSAS audit of health & safety Following this internal analysis and the adoption of During the year, various health promotion Sumario 16/18,5 very high levels management system appropriate measures of improvement, the process campaigns were carried out. of external OHSAS audit was begun, undertaken by BLUE 07 conecus of protection and As part of our commitment to very high levels of technical auditors accredited to do so. Some of these take place during the medical health and safety protection for workers’ health and safety, as well as examination, like the campaigns to prevent aperept atestem implementing a coordinated and efficient system for An exhaustive revision of the health and safety colon cancer, prostate cancer and gynaecological for its workers. In managing health and safety at work, during 2013 we management system procedures for working, and conditions, and to mitigate cardiovascular risk. nissunti utet, quo started the audit process according to the standard of Telefónica’s own installations proper, was carried et eni uta quasita 2013 we began OHSAS (Occupational Health & Safety Assessment out. During the external audit, various aspects of the Others are run at certain periods only, and the Series) 18001, for all Group companies in Spain. system including those listed below were verified, at workforce is invited to participate and take sum con corum the audit process both the central and provincial levels: advantage of the consultations and checkups for the OHSAS The first step was to start an internal audit process, offered, by means of notices posted on the sed min et lam, the work for which was performed by technicians ➜ Emergency measures. intranet. These are the annual campaigns of 18001 standard from the Joint Health and Safety Service. Its aim was anti-flu vaccination and the promotion of healthy od que ea necti to assess the compliance of the health and safety ➜ Evaluation of risks. habits, such as exercise, eating properly and nobit laces isitate management system for the 36 companies of the giving up smoking. Group, evaluating their capacity to comply with ➜ Investigation of occupational accidents. volupta tumque the applicable laws and regulations, as well as their In addition, during 2013 we have continued to ability to meet specific targets and identify possible ➜ Vigilance of individual protection equipment. work on making the procedures and instructions areas for improvement. in the area of health, safety and wellbeing more ➜ Coordination of business activities with our uniform, and promoting and publicising ‘good Similarly, we evaluated the effectiveness of the collaborating companies. practices’ among the operators of the different system through sampling in different provinces, geographical areas of Telefónica Group. visiting, among other places, A Coruña, Ciudad Real, ➜ Revision of installations (telephone exchanges, Guadalajara, Madrid, Segovia, Toledo, Valladolid and inspection boxes, base stations, posts, etc.). Zaragoza, in the case of Telefónica Spain. Europe ➜ Health & safety committees. During these visits the Joint Prevention Service ➜ During 2013, Telefónica United Kingdom has staff worked closely with those responsible for the ➜ Development of annual preventive scheduling. used its expertise to support one of its principal different units involved, such as Property, Security, partners – Capita – in obtaining OHSAS 18001 ➜ Health monitoring management. certification, meaning that the two organizations
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Latin America 2013 2012 Accident rate 12.92 11.50 Serious accident ratio 575.81 468.94 Mean duration 44.56 40.78
Europe 2013 2012 Accident rate 5.01 5.01 Serious accident ratio 152.08 130.72 Mean duration 30.35 26.08
GRI global indicators 2013 Total 2013 Total 2012 IR 0.93 0.83 ODR 0.39 0.34 LDR 38.10 29.68 AR 5,599.35 5,658.76
IR: Injury rate ODR: Occupational disease rate LDR: Lost day rate AR: Absentee rate
Telefónica are sharing synergies with a view to an effective ➜ In Venezuela, the first phase of the Health and Worker representation on operators, the main object of their activities being The health policy on health and safety at work. Safety Programme was adapted so as to cover, Joint Health and Safety the integration of people with a disability. continues among other things, processes for declaration Committees and safety ➜ In Germany, they are committed to a global – and investigation of accidents, identification of With respect to the relevant indicators, a to develop holistic – concept of health and safety at work, danger, evaluation and notification of risks, etc. The health and safety model established in reduction in the serious accident ratio, the mean committees and so they have developed a specific programme Telefónica’s different zones shows a high degree duration and accident rate in Europe can be procedures and called EAP (Employee Assistance Programme) for ➜ In Nicaragua, seven joint occupational health and of representativeness and participation by seen, as a consequence of the health and safety permit the instructions for problems of stress, and the programme BEM (for safety committees have been set up. workers through the corresponding health and policies applied. In the case of Latin America, occupational reintegration at work after a long illness). safety committees in all Telefónica regions. the most noticeable decline is in the serious the health, safety ➜ In Ecuador, a Programme of Industrial Safety accident ratio. health and safety ➜ In Ireland, a design and construction manual Inspections was carried out at telephone These committees permit the health and safety and wellbeing of has been defined as part of the network sharing exchanges located in the cities of Quito and objectives set to be turned into practice and Milestones targets set to process, and in this the requirements for all Guayaquil. consolidated, by means of continuous analysis its employees all aspects of network design and construction are and follow-up of the programmed preventive Start of the external OHSAS audit process for the be turned into over the world set out. ➜ In Colombia, the pilot programme TSAN has been activity. 36 Telefónica companies. practice and developed, which focuses on working safely at ➜ In the case of Spain, the content of the heights, identifying the needs for standards, Accident rates Challenges consolidated occupational health and safety website has been procedures and individual and team equipment reorganised. for such work. In the interests of transparency and The audit process of Telefónica Group in Spain, comparability with other companies of our sector, whose principal aim is for every single one of Latin America ➜ In Argentina, working conditions have been the ratios only include the core businesses of the companies of the Group to obtain OHSAS ➜ Various countries in Latin America have made checked in 175 buildings, awareness-raising Telefónica: fixed and mobile telephony in all certification, will be completed. To achieve this, good progress in the continuous improvement workshops were held for operational supervisors, the countries where we operate, together with we will continue to work with the representatives of their preventive activities, such as Mexico, reaching 83% of them, and over 5,000 people all the activities in Spain, being the corporate of the different units involved to fit the which has given 500 employees training in were mobilised for evacuation drills in 186 centre of the company. Employees of business procedures and processes to the standard for forming emergency teams. The Health & Safety buildings all over the country. units not related to the main activity of our continuous improvement of occupational health Committee made 26 trips around the country, company (mainly those of Atento and Terra in and safety cited. including both corporate offices and other ➜ In El Salvador, the ‘complete health fair’ was held Latin America) have therefore been excluded installations, with the objective of ensuring the to promote the benefits in the areas of health and from the calculations of these rates. Likewise, health and safety of all staff. nutrition to employees. the social employment enterprises of ATAM have been excluded, as they would diminish the comparability of Telefónica with the other
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responsible MANAGEMENT Materiality matrix
Specific diversity matrix Management of diversity_ 10
For Telefónica, diversity is a competitive advantage. The growth of the Group is possible thanks to its team of individuals from different cultures, generations, ethnic origins and sexual orientation, Gender General and their diverse professional experience sustainability matrix 10 Disability Women equal
Cultural 38.3% of the
Relevance to stakeholders Relevance employees at Diversity is a competitive advantage. Having a of employees from different origins help us Diversity team of professionals that accurately reflects the to make positive changes in our organisation Telefónica and
The goal is to to stakeholsders Relevance societies in which we operate, allows us to better and work methods. We attract, hire and retain understand our clients and surprise them with diverse talent with multiple ideas to help to occupy 21% of integrate and 0 10 new products that fit their needs. It also makes it build new products, services and markets, and Impact on company management 0 Impact on company management 10 management thus achieve possible to offer them high quality services, which broaden the existing ones. subsequently have an impact on our profits. positions greater benefit ➜ Deliver. The crucial success factor is not from the talent Our Business Principles include the fundamental the mere presence of diversity, but the right to equality: leverage and use of the differences existing in the service of excellent business results. the average salary for women was 96% in middle of the company’s Mean salary gender gap “We promote equal opportunities and we treat We create awareness in our leaders and management positions and 97% in management for Telefónica’s major markets employees all individuals fairly and impartially, without we support them in the construction and positions. This is a decrease compared with the discriminating on the basis of race, color, management of a diverse workforce at all previous year of 0.5 p. and 1.7 p., respectively. 2012 2013 nationality, ethnic origin, religion, gender, sexual levels. Senior managers Middle managers Senior managers Middle managers orientation, marital status, age, disability or We are aware of the need to progress in diversity. Spain 96.1% 95.6% 97% 96% family responsibilities.” The diversity project, which received an So, during 2013 Telefónica has driven various important push in 2012 through the pilot initiatives. Among them, it is worth mentioning: Brazil 93.8% 94.1% 96% 94.3% However the concept of diversity goes much programme in the European region, continued United Kingdom 94.0% 109.7% 88.7% 107.2% further, it is a fundamental value. The reasons in 2013 with the goal of creating a structure of ➜ The ‘Women in Leadership’ programme that diversity is a critical management factor global diversity and inclusion, aimed at insuring which began in September 2012 and continued for us are many. But from these we can proper management of our various work efforts into 2013 in its second installment. Thanks highlight, first, the need to use all of our talent, and an inclusive work environment, as well as to its success, the programme was extended and second, the importance of other market raising awareness that diversity and inclusion throughout Latin America and to other divisions segments, of other non-traditional groups with provide business opportunities and are part of our of Telefónica. The programme intends to a large purchasing capacity, such as women, transformation. strengthen women’s abilities, confidence and Diversity on the payroll handicapped individuals, elderly, etc. The personal recovery ability; establish a solid intended impact is achieved through proper Gender network of female leaders in Telefónica’s management of employee diversity; these European companies and increase their visibility; 2012 2013 employees come from over 24 countries (four of Regarding the distribution of men and women create an environment in which they can share which are represented on the Board of Directors in the global workforce, the total number of experiences that affect organizational culture, and which belong to more than 105 nationalities. employees of Telefónica on December 31, 2013 and identify mentors and sponsors that can Female 19.3 % was 126,730. The total number of professional support them, among other objectives. managers 21 % Strategy women amounted to 48,553 - in other words, 37.9 % 38.3% of the total. Total professional men ➜ Telefónica Mexico has received the award given Women in The diversity and inclusion strategy is adapted to amounted to 78,177, the remaining 61.68%. by the Great Place to Work Institute for the last workforce 38.3 % our company vision and finds an echo in each of three years, being among the 70 best companies the pillars of this strategy: Discover, Disrupt and In the same way, in 2013 Telefónica had a total of in gender equality. The good practices of the Deliver: 1,255 management positions, of which 21% were operator in recruiting talent, for example the filled by women, an increase of 1.6 p. compared Assessment Center, allows us to show non- ➜ Discover. Diversity is an added value. Our with the previous year. This increase was the discrimination, by giving more importance to employees’ diversity gives us a competitive result of optimizing the exchange of diversity as the potential and talent of candidates than any advantage in revealing and responding to our good practice within the Group. other consideration, whether it be their physical customers’ needs. appearance, age, race, or belief. Staff worldwide 2012 2013 Therefore, regarding the relationship between the Nº of nationalities on payroll - 105 ➜ Disrupt. Our employees’ diversity boosts our base salary of men compared with women, in our capacity to innovate. The vision and thought domestic market (Spain being the most relevant)
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Support for people 2012 2013 with disabilities Unconscious prejudices about diversity
Compliance with the Spanish Law on 3.04% 3.2% the Social Integration of People with By category Unconscious prejudices about Disabilities (3) diversity by categories Explicit The launch of a new course on subconscious Volume of contracting with social 4,225,258 4,548,894 Implicit 45 prejudice at Telefónica Europe attempts to suppliers raise awareness among our managers of how 40 decision making processes are influenced Web page accessibility level (W3C) AA AA by the subconscious. We all have prejudices 35 that are developed subconsciously. From a Dialogue established between ONCE, CERMI, CNSE, FIAPAS, FEAPS, ONCE, CERMI, CNSE, FIAPAS, FEAPS, 30 biological and natural point of view we prefer organisations representing people with ASPAYM Granada and CENTAC ASPAYM Granada and CENTAC being around people who look like us and who disabilities (1) 25 share our interests. This preconceived idea which we develop subconsciously regarding 20 Products and services that incorporate Bills in Braille or large-type print, Bills in Braille or large-type print, people, limits our ability to manage diverse teams. Greater awareness of prejudices and principles of universal accessibility and platform in sign language, accessible platform in sign language, accessible 15 underlying stereotypes allow us to make more design for all terminals, ATAM (LAVECO, MONDECO, terminals, ATAM (LAVECO, MONDECO, % Admitted preferences effective and objective decisions. The result is SERVITELCO, DO2, SOSTENIBLE) SERVITELCO, DO2, SOSTENIBLE) 10 called ‘positive conflict’, aimed at optimizing 5 the meritocracy and inclusion where there are Investment in social innovation and 9,328,294 8,688,997 equal opportunities for all of our talent to have (2) disability 0 a successful career, allowing us to progress, increase recruitment and the retention of the Handicapped Race Gays/ Immigrants Gender Age Telefónica volunteers who participate 1,816 3,051 individuals Lesbians legal most important skills, and maximize our growth. in initiatives where the beneficiaries are people with disabilities (1) Group
People with disabilities (Pwd) benefiting 12,436 16,397 from volunteer activities (1)
(1) Pwd: People with disabilities. (2) Data verified by LBG criterion. (3) Spain - General Law on rights of persons with disabilities and their social inclusion.
‘Positive conflict’ People with disabilities During 2013, nearly 16,000 people in Spain have benefited from their work and 774 employment the opportunity to access this scholarship subconscious and how to make this a positive finds and retains We are aware the need to progress on the diversity offers have been managed through the Mercadis programme. Through practical training, they will element in management. path, and even further, when it comes to the employment search, among others. be able to see the business up close, promoting talent, and uses employment of disability and dependency. their integration to it. This measure will Challenges 711 professionals have worked in these doubtlessly result in a significant improvement it to grow the ➜ ATAM and working to integrate handicaps companies during 2013, of which over 90% in promoting the addition of this group to the ➜ Creation of the global work group and Company and dependencies. ATAM, the social arm of suffered some type of handicap. workforce. employment of regional initiatives within Telefónica, with expertise in people, disability the group. and dependency, is a registered non-profit ➜ Telefónica, in its commitment to society, makes organization declared of Public Utility by the important social investments and innovations Milestones ➜ Preparation of the diversity map of Grupo Cabinet in 1977. for the handicapped. Among others, we can Telefónica. mention the Telefónica Ability Awards, which ➜ Constitution of the European Diversity The objective of the association is making it so recognize companies or institutions that have Committee as a subcommittee of the Executive ➜ Development and approval of the corporate that all handicapped individuals have greater incorporated handicaps into their value chain, Committee of Telefónica Europe. diversity policy. access to employment, as a key part of their or which have developed sustainable business social integration. Under the principles of their models, which integrate solutions, products and ➜ Successful completion of the 1st edition of the enabler model, they work so that people with services that meet the needs of individuals with Women in Leadership programme and start handicaps can develop themselves professionally. handicaps and deepen their incorporation in of the 2nd edition in Europe and the 1st in Latin Best practice In addition, the business project of ATAM is society. America. configured by firms that operate using the special employment center’s formula, which reinvests ➜ During the next round of the Talentum ➜ Implementation of the prejudices pilot test to their economic profits with the objective of Universities scholarship programme, raise awareness among managers of how the Telefónica España joined in the celebration of increasing the number of positions offered to which will soon be launched by Telefónica decision-making processes are influenced by the Diversity Day at Telefónica Europe by performing handicapped individuals. España, there is a reserve of 5% for young awareness actions among its employees. handicapped individuals with degrees to have
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responsible MANAGEMENT Materiality matrix
Specific supply chain matrix Sustainability in the 10
Child labour EP labour supply chain_ aspects General Conflict minerals sustainability matrix EP human rights Managing the impact associated with the acquisition of goods and services 10 EP supply has become a key issue in our sector, where companies share ever more chain EP environment links in the value chain with their suppliers and contractors EP social
Relevance to stakeholders Relevance Supplier Supply training chain Stakeholder relevance Stakeholder
0 10 Impact on Company management 0 Impact on Company management 10
Sustainable The identification and management of risks A significant commitment Details of adjudications Details of adjudications associated with the supply chain is an inherent given the presence and scope by product line by region management responsibility of each company, as is made clear of our supply chain by the UN’s Guiding Principles on Businesses and Infrastructure by our suppliers Human Rights, and the sectoral guides created by This commitment by the Group has let us set out networks multiplies the the European Union, published in June 2013. the positive impact of our activity through an Mobility 27% international chain of value, but with a high local 23% positive impact of Telefónica Group undertook a public commitment component. in 2010 to sustainability in its supply chain, ➜ Europe our activity incorporating social, working and environmental More than 800 professionals in 19 countries. >26,500 M€ 40% aspects into its purchasing criteria. The Content purchasing commitment, laid out in detail in internal policy ➜ Over 15,700 suppliers from 73 countries used. 4% volume and regulatory standards, has become a relevant LatAm 60% aspect of our global procurement model. ➜ Nearly 84% of supplier contracts awarded locally. Services and Publicity and ➜ construction Volume of purchasing above 26,500 million marketing 25% euros. 5%
➜ Over 247,000 professionals from our suppliers carry out key support and customer service Information Market activities in Latin America, playing a fundamental systems products 9% 7% role in the satisfaction of our customers.
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Through A global and transparent We at Purchasing are also working towards the Sustainability of the supply chain (value drivers) purchasing model objective of Telefónica to be a Digital Telco. Telefónica Global Ecommerce tools help us contribute to this target Services, the Our purchasing model is focused on a global and to ensure that our activity is carried out with approach which, at the same time, addresses the transparency and integrity. In fact, in 2013: Supply chain sustainability Group handled needs of the different markets and countries, guaranteeing coordinated and transparent ➜ We negotiated over 28,000 million euros value drivers over 22,000 management between Telefónica Group and its electronically, as well as nearly four million euros purchasing suppliers. through online auction. The main suppliers in 2013 by value were: Apple, ➜ We carried through more than 18,500 million Risk Efficient Culture Sustainable processes to the Samsung, Huawei, Ericsson, Atento, NSN, Nokia, operations of electronic formalisation which management production of sustainability products value of 16,900 Sony Ericsson, Publicis Group, Alcatel-Lucent. includes letters of adjudication, orders and contracts. million In 2013, we continued to consolidate our Reducing risks Reducing costs of materials, Training and involving Innovation to satisfy needs objective of managing purchasing globally and ➜ We received 598,484 invoices issued (environmental, energy and transport employees/user of Telefónica client and strengthening relations with our suppliers, electronically. occupational, etc.) to Developing strategic departments partners negotiating more than 22,000 procurement minimum relations with suppliers Building solid relations with Access to new markets ➜ processes through Telefónica Global Services We carried out further interconnection of Group Protecting reputation and to optimise the process, stakeholders whose total value exceeded 16,900 million euros. company systems with those of our suppliers, Boosting the power to value of brand products and services reaching more than 16,500 orders. Positioning in sustainability determine prices and LIkewise, in 2013 we have advanced in a project Facilitating access to rankings improve customer loyalty to transform the buying process into an end- ➜ More than 2,000 suppliers received training in financing and insurance to-end (E2E) process to raise the added value handling negotiations, ordering and electronic of Purchasing in the supply chain. This project invoicing. was also aimed at making the relations with Legal compliance: governance, management and transparency model our suppliers more efficient, through greater standardisation of specifications and greater involvement by Purchasing in the activities following adjudication.
A general sustainability Our Business Principles include the minimum Risk framework integrated into the requirements on social, occupational, purchasing process environmental and ethical matters with which management is all our suppliers must comply. For this, we the key pillar in Our Business Principles Since 2010, and in compliance with the have made an online course available to them, commitment undertaken, we have incorporated accessible at our supplier portal. The standards the sustainability These are the basis for building trust with our stakeholders sustainability into all the key phases of the which we require of our providers are as follows: purchasing process. model ➜ Business Principles of Telefónica Group. ➜ Commitment Policy Standards At Telefónica we understand sustainability in the Commitment to sustainability. supply chain as a management framework that ➜ Policy of responsibility in the supply chain. Incorporating Establishing standards Defining mechanisms lets us mitigate risks and identify opportunities, ➜ Commitment to human rights. sustainability criteria of responsibility or creating new process- while it is a key driver of the reputation of the ➜ Commitment to responsible trade in minerals. into business strategies to keep our es that respond to Group. The sustainability in the supply chain ➜ General conditions for the supply of goods and commitments our policies framework is based on the global purchasing services. model, and rests on four basic pillars that allow minimisation of our negative impact, at the same We use different tools to ensure that these 1 2 3 4 5 6 7 time as it encourages innovation and efficiency. requisites are fulfilled by our suppliers, from pre- evaluation processes to audits in situ. Governance, management Creation Provision of Evaluation Finalisation Final and transparency model If a supplier does not reach the required level or Business needs of terms Adjudication products of proposals of contract evaluation On the basis of our Business Principles we cannot provide the information requested, an of reference or services require that our suppliers carry out their activity internal process with multiple phases and tools is
Revision of Revision of Revision of Valuation of Monitoring Assignment Supplier applying similar principles and that they respect triggered. The final objective is to ensure that the sustainability policies and fulfilment of sustainability knowledge of improvement record compliance with the law and regulations in force supplier does comply with our requirements. requirements clauses criteria aspects transfer category in the countries in which they operate. Legal and More info Prevention contractual Intervention Evaluation in the Suppliers Portal
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Audits carried out in Latin America Evaluation Map Defining aspects Monitoring and analysis of key of providers to be improved and support Venezuela aspects at risk Argentina 7% 12% Ecuador 10% Brazil 9% In extreme cases, when this is not feasible, on It is fundamental for Telefónica to perform an a Mexico the basis of the agreement initially entered into priori risk evaluation of our providers. Because of by both parties, relations with that provider are the size of our supply chain, this has to be carried 5% suspended until they can show that the situation out by an external and independent source. For has been rectified and that they do attain the this reason, in 2012 we decided on the solution >14,000 Chile levels demanded. offered by EcoVadis. Colombia 10% 10% The EcoVadis Risk management Deployment of 360º tool for process: a A key pillar of the supply chain sustainability evaluating our suppliers virtuous circle model, risk management consists of four basic At the end of 2012 Telefónica reinforced the processes: prior evaluation that it carries out of its at-risk All providers providers, thanks to the agreement reached evaluated go through ➜ these four stages Evaluation and analysis of key aspects. with EcoVadis. The solution offered by this company is based on international standards of ➜ Map of at-risk suppliers. corporate responsibility – in addition to having Peru 1. Preselection the contribution of experts in sustainability who 37% Online registry and ➜ Definition of aspects that need to be improved. analyse the information supplied by providers or rating of all sup- published by organisations of reference – which pliers ➜ Follow-up and reporting. allows a 360º analysis of the performance of our Priorities in evalu- suppliers. ations
The platform evaluates the policies, actions ➜ Latin America EcoVadis audits 2. Evaluation and results of our suppliers in terms of 21 Suppliers whose activity is labour-intensive, in Compilation from sustainability criteria. This sets in motion a direct contact with the customer. Especially, Telefónica multiple sources (online complete risk management process. contracts and call centers. questionnaires, etc.) suppliers so that The assessment carried out gives Telefónica an Under the aegis of the Aliados programme, more they comply 1 objective and independent point of reference. than 14,000 administrative audits, over 1,400 Similarly, the suppliers can share the results of audits in situ on the basis of local conditions, with the criteria their evaluation with other EcoVadis clients, so and 100 corporate audits were carried out, using 2 We have 21 CSR criteria taking advantage of the exercise performed. At uniform sustainability criteria. All these activities established by 4 the end of the first year of use of the platform, 86 led to over 750 improvement plans being put into suppliers had been evaluated and 36 more were operation around the world. the company in process. Policies I Environmental II Social III Ethical 3 In the context of the Annual Corporate Audit Plan Energy consumption Occupational health and Auditing the performance of our suppliers 2013, 100 audits of suppliers were carried out, and GHG (CO2) safety 3. Results Water Working conditions The evaluation model just described is representing 79% more than in the previous year. Dynamic easy-to-use Biodiversity Social dialogue complemented by the Annual Audit Plan that The graph above displays the distribution of the evaluation records avai- Local pollution Career management and takes account of the critical aspects in each corporate audits carried out in LatAm. lable online Materials, chemical products training region. and waste Identify the smelters or While the graph on the following page shows Supplier performance Shares refineries (SORs) – included rating and qualitative The audits made by Telefónica in 2013 were in the results of the evaluation in terms of the four in the supply chain information Use of product Child labour response to different needs in the two regions in pillars of the model. End of useful life Discrimination which we are active: Customer health and safety Basic rights Slight improvements were detected in the degree 4. Improvement Responsible consumption Corrective action ➜ Europe of compliance of the suppliers in the disciplines plan: module Profit and loss · Manufacturers of terminals and network Business Principles (BP) (0.5%), HR (1%), and Evaluation records infrastructure equipment Environment (2%). The most significant rise was to improve Supplier environmental performance IV Providers · 12 audits carried out in the UK, of a global in the area of Health and Safety (18%). supplier Social practices nature, with seven improvement plans put into performance operation.
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Corporate audits in Latin America all together the nearly 200 authorised To comply with these obligations, and with distributors and providers for Telefónica in the aspiration that the provisioning model In 2013, Ecuador. In addition, a training course of five become an effective engine of change, 2011 2012 Telefónica UK 2013 hours was held during the meeting. Telefónica United Kingdom requires that its suppliers: introduced a The event was also propitious for driving 86 87 home the policy of zero tolerance of child ➜ Have a sustainability plan, as well as measure to give 82 79 labour in the network of companies. sustainability certificates for their products. access to the 72 72 69 71 In response to the multiple concerns that ➜ Comply ahead of time with the law on the supply chain to 64 arose during this meeting, a virtual seminar elimination of dangerous substances. 61 was held later, on the Health and Safety at SMEs and social Work Management System: Compliance with ➜ Raise their purchasing levels for renewable 51 Legal Requirements. This digital event was energy, in line with market availability, and organisations 47 designed specifically for our value chain and commit themselves to ongoing improvement meant that more than 100 of our suppliers in energy efficiency. and authorised distributors, from different cities, could participate from their own ➜ Commit themselves to support the Business Human resources Health and safety Environment offices. Telefónica GoThinkBig programme, oriented Principles at improving young people’s skills so that During the 90 minutes that the event lasted, they can cope in a society that is evolving participants formulated over 100 questions rapidly. online. Further, 94% of participants stated that the matters dealt with by the seminar ➜ Revise their purchasing processes so as would help them with their business to allow greater participation by SMEs and management. social organisations. For cases of noncompliance, all the suppliers manufacturers as it ensures them direct contact have started improvement plans, there being 100 with Telefónica. So far, over one million units from ‘Marketplace’ on responsible purchasing In addition to the above, Telefónica UK introduced of these this year. We should mention the case the Marco Polo project have been deployed and and hiring people with a disability: a further measure in 2013 that facilitates the of Peru, where a software module to facilitate it is expected that this number will grow rapidly inclusion of SMEs and social organisations in management and follow-up of noncompliances in 2014. Within the scope of the Telefónica Ability our supply chain, direct or indirect, thanks to an detected in the audits has been implanted. Awards, and in collaboration with BBVA, improvement in settlement terms. So, a Buyers’ Culture of sustainability the different agents implicated from both Forum was held for them, also attended by some Some of the most common risks were: medical- We believe that communication is a strategic axis the supply and demand sides of the labour of our largest suppliers, where the SMEs and occupational, tidiness and hygiene, illness with a to generate commitment and closeness to our market gathered to discuss the solutions, social organisations learned in detail what and common cause, examinations of work relocation suppliers and allies in fulfilling the commercial barriers and myths that special employment how we buy, the support team we have at their and readaptation (HS), claims assistance targets that we propose month by month, so centres encounter; in the case of Spain, these disposal and what is required to be a Telefónica procedure, pay settlement, pay policy, disability helping us to meet the said targets. employ 61,851 disabled people. supplier. (HR) and energy efficiency policy, rational and efficient use of water (Environment). So, in 2013, in addition to reinforcing the existing Managing the opportunities With regard to risk management, the activity channels of communication with our suppliers like of Telefónica UK in 2013 was centered, in Efficient production the Allies’ Portal, online platforms, e-bulletins, We at Telefónica recognise that suppliers accordance with the principle of due diligence, Telefónica deployed the Marco Polo project in etc., we have promoted physical meetings with have a fundamental role to play in achieving on the categories of greatest risk, taking two 2013 so as to have end-to-end management the main providers throughout our geography, in a sustainable model, and so we manage fundamental factors into account: of the supply chain for residential modems particular: not only the potential risks, but also the (xDSL, FTTH). This project allowed participation opportunities. With regard to this two- ➜ The adoption of the EcoVadis platform, that by the Company in the whole process, I LatAm Regional Supply Chain Meeting, pronged approach, the actions of Telefónica offers an analysis of behaviour in the context of from the definition of the product and held in Brazil. UK should be highlighted, which boosted sustainability. technical specifications, up to scheduling the new sustainability practices in 2013 that manufacturing and quality control. II Authorised Distributors and Providers go beyond routine compliance with basic ➜ Greater coordination and involvement with the Meeting that took place in Ecuador: requirements. procurement team, requiring, for all purchases The main benefit of the project arises from the in excess of one million pounds, an express direct relationship with manufacturers (ODMs Here, spaces for dialogue were created and In 2012, Telefónica UK, as part of the Think declaration by the supplier that they comply with & Chipsets), and promoting local manufacture the exchange of good practices with our Big scheme, made 40 public commitments, the requirements set out in the Supply Chain in some key countries for Telefónica, such as strategic partners was encouraged, so as of which 20% affected the procurement Responsibility Policy or that, if not, they have set Brazil. In addition to the improvement in quality to reduce risks to the business and make process. improvement plans in motion in response to the and reduction of the time to market, this project the most of the opportunities of having stipulations of the said policy. has also simplified operational relationships with
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In addition, suppliers are contractually obliged open, global cooperation, informs the public Telefónica is to extend our supply chain sustainability about the voluntary actions of its members to requirements into their own supply chain, and improve their sustainability and encourages committed to to supply evidence that they have evaluated the technologies directed at sustainable risks associated to their own value chain, defining development. the eradication and/or implementing the projected due diligence of child labour, actions within the period defined. In relation to the supply chain, in June 2013 GeSI signed an accord with EcoVadis to update which affects 168 This model allowed Telefónica UK to work jointly and administer the new version of eTASC: for the first time with suppliers of level two, to a collaborative platform among ICT sector million children all deal with critical aspects. companies that sets their sustainability requirements of providers on a uniform footing, over the world Here are some key data about the results in addition to reducing the associated workload obtained by Telefónica United Kingdom in through the exchange of its results with multiple 2013, in relation to supply chain sustainability clients. management: PPA: the Public-Private Alliance for ➜ Nearly 7,000 employees of contractor responsible trade in minerals organisations were positively and directly Telefónica renewed its participation in the affected by the evaluations of suppliers in 2013. PPA, which campaigns for responsible trade in minerals. The PPA was proposed by the United ➜ Over 150 jobs created thanks to contracts from States Under-Secretary of State for Democracy Telefónica O2. and Global Affairs; it is a multisector and multistakeholder initiative, and it currently has ➜ A total of 776 jobs were maintained to fulfil more than 48 associated organisations. Telefónica O2 contracts. The Alliance promotes and carries out initiatives ➜ Up to 85% compliance recorded by corporate that respond to the various challenges faced audits of suppliers. Regarding revisions with in supply chains which could include minerals suppliers, the values were between 80% and from areas of conflict. The PPA provides finance 95%. and coordinates support for organisations that work in the region, to develop supply chains that ➜ Twelve audits and revisions performed on at-risk can be shown not to involve conflict, to align providers. the programmes and practices in the chain of custody, encourage responsible provisioning from ➜ Seven supplier improvement plans. the region, promote transparency and strengthen report a problem that affects 168 million boys, The basis of ‘Aquí estoy y Actúo’ is the guide civil society and government writ in the region. girls and adolescents. for identifying and mitigating the risk that Sustainable products there could be child labour in the value chain of Telefónica is aware that the global risks In addition, we can mention at a local level other ‘Aquí estoy y Actúo’ forms part of Telefónica’s companies. The guide was compiled in 2011 by that affect the supply chain need sectoral organisations with which we collaborate on efforts at a global level to foment a sustainable Movistar and Fundación Telefónica in Colombia, multistakeholder solutions, so that the goods and supply chain sustainability management, like supply chain. The Group’s strategy in this area is as part of their work with the Colombian Global services acquired are ever more sustainable. the Latin America and the Caribbean Regional structured along three lines of action: Compact Network. In 2012 we put the publication Compact, CERES, Cemefi, local chambers of at the disposal of the UN in New York, with the To this end, we at Telefónica collaborate at a commerce and Forum for the Future, among ➜ Compliance with the responsibility to respect determination to pass it to other Latin American global level with two key organisations in the area others. the Rights of the Child in our operations and our companies, and we began to build a programme of supply chain sustainability: supply chain. around a web platform ‘Yo digo aquí estoy’ (I say Eradication of child labour: I’m here). Global e-Sustainability Initiative (GeSI) ‘Aquí Estoy y Actúo’ ➜ Promotion of respect for the Rights of the Child, Telefónica is a founder member of GeSI, an especially in relation to education and infancy Currently the initiative offers four lines of support organisation of ICT companies and industry ‘Aquí estoy y Actúo’ (I’m here and I’m acting) free of child labour. to companies: associations committed to the creation and helps companies to eradicate child labour totally driving of technologies and practices that from their value chain, in both their own scope ➜ Incentivisation of activities and promotion of ➜ Make workers aware of the responsibilities of improve social, economic and environmental of activity and in that of their suppliers and alliances to achieve greater impact in eradicating employers and professionals to eradicate child More info sustainability. Created in 2001, GeSI foments distributors. Similarly, it invites the public to child labour. Link to ‘Aquí Estoy y Actúo’
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1. Contractor Classification and Policies
2. Outsourcing of activities 3. Administration of allies 4. Closure contracts allies
2.1 Supporting analysis and 3.1 Induction 4.1 Evaluation building a business case
2.2 Inclusion HR annexes 3.2 Communication 4.2 Legal report
2.3 Final validation and approval 3.3 Training and development
3.4 Intervention The ‘Aquí estoy y labour, as well as tell them how to act should they In 2014, in addition to carrying on with this and assurance become aware of a case. initiative, two key lines of action have been Actúo’ platform defined: 3.5 Working climate ➜ Create internal teams in companies to undertake has received 15 the implementation of a voluntary plan of ➜ Support and monitoring for companies that carry recognitions, ongoing improvement in this matter. out a self-diagnosis; for this a toolkit to help 3.6 Reports companies to follow up the activities to which among them ➜ Provide tools and guides so as to prevent they have committed has been created. child labour throughout the activity (including 5. Allies' Committee the UN’s Social providers and supply chains). ➜ Holding of awareness-raising and self-diagnosis workshops, both for new companies and those Investment ➜ Evaluate companies with a model that lets their that already exist on the platform. Pioneer Award actions be assessed and drives progress through a commitment to continuous improvement. Aliados
In addition, ‘Aquí estoy y Actúo’ includes an app Objectives so that anybody can report cases of child labour. Aliados is a transformation and commitment the Third Party Committee, the model for risk Principal lines of work initiative with our collaborating companies and detection and management, work audits and the The scheme has different lines of work, both The programme, launched in 2011 and implanted third parties who become ‘aliados’ (allies) of the online supplier training platform. internal and external, developed in each country in 2012, is managed and operated in 12 countries Company. The importance of this initiative, that in terms of the local framework in force. of Latin America, through a network made up of began in Latin America in 2008, lies in the fact In addition, and respecting the legal framework those responsible for the focal points of the UN that about 80% of direct contact with Telefónica in force locally, sustainability practices are The scale of the work carried out in 2013 is made Global Compact for America and the Caribbean, customers is made by third parties. shared with allied companies through workshops, manifest in the following data: and by members of the sustainability department certificates and communication bulletins. of Telefónica and social programmes of Fundación Alignment of third parties is a fundamental ➜ More than 14,000 administrative audits. Telefónica. element in achieving the Group’s targets, so the The keystone of this initiative is the Allies’ scheme aims to: Committee, the body responsible for putting ➜ Over 1,400 in situ audits and over 750 At the end of 2013, ‘Aquí estoy y Actúo’ is being the model into practice, and following up and improvement plans. used by over 100 companies in 12 Latin American ➜ Ensure the creation of strategic allies. updating the same. The Committee, present in countries, meaning that it has reached a total of the principal countries of the region, is made up ➜ More than 9,000 courses offered by our Company 180,000 employees. Indeed, Telefónica/Movistar ➜ Guarantee compliance with organisational of key departments in the relationship with allied to allied companies, from which about 27,680 is already using the platform in Colombia, objectives and technical security, and develop companies: HR (guarantor of work and health collaborators benefited. Costa Rica, Guatemala, Mexico, Nicaragua, early halting and risk prevention mechanisms: and safety aspects), Purchasing (ensuring that Panama and Peru. Further, there are many other sustainability criteria are incorporated into the What makes the Aliados programme different companies from different sectors who have also ➜ Raise contractors’ awareness of compliance with purchasing process), Sustainability (in charge is it has shown that this is a purchasing process incorporated it into their processes. Telefónica’s standards. of ensuring the sustainability of suppliers: aligned with sustainability standards during all evaluation and monitoring), General Secretariat its phases in all the countries, and in a continuous The initiative has already received 15 public The programme monitors compliance with social, and departments of management or petitioners and consistent way. acknowledgements, among them a Social occupational and ethical standards, facilitates the (who identify key providers for the performance Investment Pioneer Award from the United progress of allied companies in sustainability and of the service, who will be incorporated under This is the only initiative of its kind that works Nations. In addition, UNICEF, Save the Children promotes excellence in customer service. the umbrella of Aliados following analysis by the uniformly throughout the region, guiding and the UN itself all recommend it as a reference Committee). suppliers in the key aspects of sustainability, for compliance with the Rights of the Child and Management Model though without interference. Similarly, it has a Business Principles. A global third party management model has been high impact on controlling occupational liabilities defined, and which has given rise to common and on labour-intensive suppliers. tools, among which are: the minimums policy,
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The lines of work of Aliado Best practice Aliados
Communication Comunicación Argentina Supplier relations development model implementation In 2013, Telefónica Ecuador had over 2,600 visits to this Introduction Training in-person Telefónica considers that this is the most ideal mechanism for subsection after only five months in operation. Introducción Capacitación presencial sustainable development in relations with suppliers, especially in Argentina, where the economic context is complex because Mexico suppliers have to meet their obligations as employers, paying Sociabilisation and recognition of the Aliados programme and committing to pay the AFIP (federal tax office) and for social Telefónica Mexico received the Best CSR Practice Award 2013 Information CapacitaciónTraining online Sistemasystem de Aliados virtual work, which in some cases may reach 120, for periods of up to in the value chain category for its programme ‘Third Party información ten years. Management’. The distinction is awarded by the Mexican Center for Philanthropy (Cemefi), the Alliance for Corporate Social So: Responsibility in Mexico (AliaRSE), and the Business Forum. Measurement Follow-up Medición Seguimiento of climate ➜ de clima An information and communication mechanism for the status The award followed exhaustive analysis of the information of each supplier was developed, with web access, letting each supplied by Telefónica to the technical evaluation committee, Socialisation provider have up-to-date information about the status of their and confirms that its practices contribute to sustainable Socializaciónwith allies con aliados documentation and aspects pending. management in the Company and affect all those involved positively, while adding to the overall success and value of the ➜ Together with the Quality department, all the contracts were business. segmented by activity so as to define a suitable model of certification for each segment (COPC, ISO, National Quality Prize The main criteria for selecting this practice were: it is a creative or, where appropriate, special ad hoc certification of activity, as in response to a business need, taking the expectations of its the case of Agents or Channels). stakeholders into account; it integrates social responsibility into the management of the business; it requires allocation Colombia of resources for its implementation, and it has measurable, Awards Milestones Transparency Programme for Colombia innovative, sustainable and replicable results. The aspects of Within the framework of the Aliados scheme, and in line with sustainability are Telefónica Mexico, recognised for its supplier Telefónica’s purpose of accompanying the development and In addition, the third party management practice was presented management: ➜ Monitoring of sustainability throughout the growth of its contractor companies through extension of the at the 8th International Seminar on Best CSR Practices held in the most valued supply chain, with progressive implementation corporate practices, the programme Rumbo Pymes (SME Monterrey, Nuevo Leon, on 30 September, before an audience of ➜ In 2013 the Aliados programme received an of a 360º evaluation system for suppliers of high Course) was started in 2012, in alliance with Transparency for over 200 domestic and international companies who attended by our suppliers award from the Mexican Center for Philanthropy or medium risk. Evidence: implantation of the Colombia (the local affiliate of Transparency International – TI – the event. (Cemefi), the Alliance for Corporate Social EcoVadis platform. one of the world’s leading NGOs in the fight against corruption). overall. Responsiblilty in Mexico (AliaRSE), and the Peru Business Forum, in recognition of its Best ➜ Adaptation of sustainability criteria to the The programme, designed by Transparency for Colombia, is a Implantation of the Monitoring Module ‘No Conformidades’: Practices in Corporate Social Responsiblilty 2013. Purchasing platform. Evidence: choice of the self-contained tool for managers that helps SMEs to bring ethics The aim was to ensure correct flagging of and action on ‘No EcoVadis platform to evaluate suppliers of high into their management model, and create value and trust in Conformidades’ (noncompliances) encountered during regional ➜ The practice was exhibited at the 8th risk; inclusion of EcoVadis scores in RFQs to high- the business. It includes over 280 hours of assistance. During audits. Through this, the consultancy’s auditors could follow International Seminar on Best CSR Practices held risk providers. 2013 a second group of allies was constituted, made up of eight the action plans established for each supplier and validate the in Monterrey, Nuevo Leon, on 30 September and companies that received accredited training in building and evidence furnished thereby on the closure of noncompliances. 1 October. ➜ Reinforcement of monitoring, assurance, implementation of the ethics programme. awareness-raising and dialogue mechanisms with Promotion of ABE certification ➜ The Aliados management model was selected for suppliers. Evidence: activities of Aliados in each Ecuador To get Telefónica suppliers, the object of the Aliados programme, publication in ‘The Contribution of Latin America country, as well as projects like Marco Polo and New suppliers’ web section to obtain ABE (Good Employers’ Association) certification as and the Caribbean to Responsible Supply’’, by the the meetings or events held with providers. We launched the new suppliers’ web section in 2013, which awarded by AMCHAM (the American Chamber of Commerce), Latin America and the Caribbean Regional Center offers tools to our suppliers and partners for them to implant which certifies companies who comply with their labour for the UN Global Compact, and the Business responsible management. The section is divided into six obligations and follow good people management processes. Administration Faculty of Externado University in Challenges 2014 subsections, including: the commitment of Telefónica Group to Colombia. responsible supply chain management, our Business Principles At December 2013, 62% of third party staff audited were ➜ To implement the EcoVadis evaluation process in (BP), responsible environmental management, occupational working in companies with 100% fulfilment of the AMCHAM ➜ The UN Global Compact gave an award to the top 150 Telefónica suppliers health and safety, and taxation matters. In addition, the annexes evaluation criteria for obtaining ABE certification. Telefónica Colombia for its fight against child to contracts with local suppliers are included: in the BP section, labour, with the Social Investment Pioneer Award. ➜ To consolidate the Aliados programme in global a manual for creating ethical codes and standard clauses against suppliers. child labour are given, and our providers can take these as ➜ Our ‘Aquí estoy y Actúo’ app was a winner at the models for their own contracts. APPCircus in Bogota.
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responsible MANAGEMENT Sustainability in the supply chain: responsible minerals provisioning_
We at Telefónica are committed to respect for human rights and work with our suppliers to apply our supply chain responsibility policy with efficiency, seeking the correct way to handle the impact of our operations
The extraction Foreword Mineral extraction and its associated impact is Extracting and processing minerals to obtain moving into the arena of international action of minerals metals involves a series of actions which cause a to reduce the negative impact in the following significant environmental and social impact that regions: and the impact linger over time beyond the activity period of said associated come extractions. The Great Lakes region: Conflict minerals It refers to four types of minerals which mainly within the scope Many services are now incorporating digital come from The Democratic Republic of Congo technology which means that metal is present in (“DRC”) and the Great Lakes Region – Angola, of international a number of sectors, ranging from the automotive Burundi, Central African Republic, The Republic of action to reduce industry and equipment manufacturers to the Congo, Rwanda, South Sudan, Tanzania, Uganda technology sector and terminal manufacturers. or Zambia. the negative This rise in the use of electrical components has increased the impact on society and the The name “conflict minerals” refers to the fact effects in the environment. This is why the responsible supply that the profits gained by selling these minerals relevant regions of minerals has become an increasingly important finances armed groups in the region which Un minero sostiene en su mano fragmentos de coltán. / Fotografía cedida por Responsible Sourcing Network and current topic, both from a regulatory and prolongs conflict and advocates human rights public opinion standpoint. abuses.
Conflict minerals, also known as the 3TGs are: Great Lakes region, the situation in Indonesia is not determined by conflict but rather by the Telefónica follows ➜ Cassiterite. A mineral from which the metal impact in extraction on both the environment the directives The region of the African Great Lakes tin is extracted. Cassiterite is used in electronic and human rights. It is important to note that the apparatus (welding), coatings and as a stabiliser former affects marine and terrestrial ecosystems. of the OECD in plastics. The latter essentially refers to the dangerous working conditions and child labour that are and drives their ➜ Columbite-tantalite or “Coltan”: Is a high- characteristic of secondary mining in the area. application to the conductivity mineral from which tantalum is South Sudan Central African extracted. Coltan is used for manufacturing Practice is increasingly to consider all 3TG supply chain, with Republic electronic apparatus. minerals to be conflict minerals regardless of their origin; hence, this list might be extended in the special attention Republic ➜ Wolframite. A mineral from which the mineral near future. of Congo Uganda tungsten, used as a cable for electric and welding paid to minerals Rwanda appliances, is extracted. from zones of ➜ Gold. Used in jewellery and electronics. Democratic conflict Republic of Congo Burundi Indonesia: Tin extraction A third of the world’s tin comes from Indonesia Tanzania and its extraction plays an important role in local development. Contrary to what happens in The Angola Zambia
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Telefónica’s situation on regulatory We believe that, in some areas, extracting, ➜ We have included in the General Conditions ➜ We follow the OECD guidelines set forth in requirements for conflict minerals processing and trading minerals could lead to for the Supply of Goods to Telefónica S.A. and its “Due Diligence Guidance for Responsible Telefónica armed conflict or cause a breach of Human Corporations from its Group, Procurement Supply Chains of Minerals from Conflict-Affected supports We follow the OECD guidelines set forth in its Rights for the affected people and communities. Policy (MCT. NI.003), 8.1 Edition, March 2014, and High-Risk Areas” report and encourage “Due Diligence Guidance for Responsible Supply We understand that mineral extraction is a requirement for the submission of offers: its implementation among our suppliers who and is part of Chains of Minerals from Conflict-Affected and an important economic driving force in the The express warranty that to the best of their work with these minerals. We expect our High-Risk Areas” report. In this regard we: previously mentioned countries and regions; knowledge following due and careful analysis, suppliers to set up an appropriate management the principal meaning that if mineral extraction and processing the products offered do not contain any of the so system addressing the issue, to conduct a risk ➜ Have adopted a company policy, described in this were to stop, it would have a negative impact on called “Conflict Minerals”. “Conflict Minerals” are identification and assessment of their own initiatives in our document. the development of said places. considered as any those meet the following two supply chain, to define a risk management plan sector directed conditions: wherever appropriate, to conduct an independent ➜ Have structured internal management to support We are aware that finding a solution for this third-party audit as necessary, and report on at reducing the a supply chain due diligence, according to our type of situation is complex and that it goes ➜ That such minerals are any of the following: progresses to proactively mitigate risks of human Supply Chain Responsibility Policy. further than companies. This is why a joint Cassiterite, Columbite-Tantalite, Gold; and rights abuses. impact and commitment - from local governments and Wolframite, and ➜ Are implementing a system of control and authorities, companies and the non-profit ➜ Since its formation in November 2011, Telefónica redressing this transparency over the conflict minerals supply sector - to take action is necessary so that the ➜ 2. That these minerals were extracted from has formed part of the Public-Private Alliance kind of situation. chain. different initiatives that are being launched can the Democratic Republic of Congo, Angola, for Responsible Minerals Trade - a joint effort succeed. These actions are oriented to promote Burundi, Central African Republic, Republic of the U.S. Department of State, the U.S. ➜ Have strengthened our engagement with the transparency of the supply chain to obtain of Congo, South Sudan, Tanzania, Uganda, Agency for International Development, non- relevant suppliers. conflict-free minerals or to manage properly the Zambia or any other Country considered as governmental organizations, companies, and impact of mineral extraction and processing has conflict area in the future. industry organizations - to take on the challenge ➜ Will establish a company grievance mechanism. on the environment and working conditions. of addressing conflict minerals concerns while ➜ THE SUPPLIER must have a clear policy on delivering solutions that benefit those involved in ➜ Report on supply chain due diligence. In the spirit of the UN Guiding Principles, any 3TG Conflict Minerals that promotes the adoption responsible minerals trade in DRC and the Great minerals will be considered “conflict minerals” and use of OECD Guidelines for Multinational Lakes Region. In this way, previous initiatives in Furthermore, Telefónica as a listed company by Telefónica. For this reason we encourage our Enterprises and the United Nations Guiding which we were previously involved are integrated, on the New York Stock Exchange duly complies supply chain to conduct effective due diligence Principles on Business and Human Rights for for example the iTSCi (www.itri.co.uk) project. with Section 1502 of the Dodd-Frank Wall Street processes – according to the OECD Due Diligence internal use and within its extended supply chain. Reform and Consumer Protection Act. Guidance for Responsible Supply Chains of To support its policy, THE SUPPLIER must have a Participating in the sector’s initiatives Minerals from Conflict-Affected and High-Risk management system. In order to achieve a major impact on the In addition, in March 2014 the European Areas - to ensure traceability of 3TGs and risk responsible supply of minerals and also to Commission released a draft conflict minerals mitigation (including risks of financing armed This requirement is mandatory and there is no facilitate the actions developed in collaboration Regulation that will create a voluntary process groups and committing other human rights possibility of agreeing otherwise in the specific with our suppliers, we actively participate in in which importers of tin, tantalum, tungsten abuses), wherever necessary and possible. conditions or any related documents. various existing initiatives in the sector. Among and gold (the 3TGs) into the EU can self-certify them are the Electronic Industry Citizenship that they do not contribute to financing armed Telefónica supports and forms part of the main ➜ We are checking our level supplier compliance Coalition (EICC) and the Global e-Sustainability conflict. initiatives in our sector oriented towards reducing through external assessments. The main tools Initiative (GeSI) Extractives Working Group. the impact of and bettering these types of toachieve this goal are: Telefónica’s approach situations. Section 4 of this document identifies This Group has developed a range of programmes the main international initiatives which affect ➜ 360 degree assessments of our risk suppliers, which aims to guarantee the traceability of At Telefónica, we’re committed to respecting conflict minerals. thanks to a signed agreement with EcoVadis1 minerals used, from the moment of extraction to Human Rights and we work with our suppliers in May 2013. the final product, as well as initiatives which move to efficiently implement our Supply Chain Working with our suppliers and transparency in the supply chain. Responsibility policy by finding an appropriate establishing alliances ➜ Audits of our main risk suppliers, where the way to manage the impact of our operations. Telefónica does not have direct business risks associated to minerals have a specific relationships with smelters or refiners (SORs), monitoring. but we actively work to include the sustainability criteria in the whole value chain.
(1) EcoVadis promotes the improvement of environmental and social practices of companies by leveraging the influence of global supply chains. EcoVadis elaborates recognized ratings of supplier sustainability performance. Besides that EcoVadis offers monitoring tools that allow companies to manage risks associated to their supply chain. www.ecovadis.com.
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4. Main international initiatives
Global and Regional Main organisation Global and Regional Main organisation initiatives involved Aim Type initiatives involved Aim Type
OECD Due Diligence Organisation for Provides recommendations for responsible action Voluntary Conflict-Free Gold Standard World Gold Council (WGC) Establishes a common framework for mining companies Voluntary Guidance for Responsible Economic Co-operation in supply chains of minerals on a global scale. It and tools from the World Gold to act responsibly in the extraction of gold and for them Supply Chains of Minerals and Development helps companies respect human rights and avoid Council to show that their mining operations do not provoke from Conflict Affected and (OECD) contributing to conflict through their mineral or conflict or abuse human rights. High-Risk Areas metal purchasing decisions and practices. www.gold.org/about_gold/sustainability/conflict_free_ It promotes accountability and transparency in standard/ terms of conflict minerals within the supply chain. www.oecd.org/investment/mne/mining.htm LBMA Responsible Gold London Bullion Market Ensures that all gold stock and all gold produced in Mandatory Guidance Association (LBMA) refineries are conflict-free. for LBMA- accredited It allows companies who provide mining supplies to refineries United Nations Due UN Group of Experts Issued in May 2011, it complements the American Mandatory identify and have a conflict-free smelter programme. Diligence Guide to mitigate on the United Nations Dodd-Frank Act (2010) Section 1502. www.lbma.org.uk/pages/index.cfm?page_id=137 the risk of direct or indirect in the Democratic The guidelines aim to avoid (i) the abuse of human support of the conflict in Republic of Congo - rights and (ii) the promotion of armed conflict RJC Chain of Custody Responsible Jewellery Certification programme launched in March 2012. Voluntary the Democratic Republic of UNGoE through the extractive operation. certification from the Council (RJC) It supports the identification and monitoring of the Congo. Responsible Jewellery Council origins of conflict-free precious metals – gold, platinum, It promotes accountability and transparency for palladium, rhodium – throughout the supply chain conflict minerals within the supply chain. thanks to documentation in the chain of custody. www.un.org/sc/committees/1533/egroupguidelines. www.responsiblejewellery.com/chain-of-custody- shtml certification/
ITRI Tin Supply Chain Initiative ITRI; Tantalum-Niobium Supports units responsible for contracting Central Africa Voluntary The Public-Private Alliance Participant Multi-sector and multi-stakeholder initiative to Voluntary (iTSCi) Pact International Study through the development of: for Responsible Minerals representatives from support supply chain solutions to conflict minerals Center; Channel Research Trade (PPA) government, industry, challenges in the Democratic Republic of Congo A physical chain of custody which follows and and civil society Main (DRC) and the Great Lakes Region (GLR) of Central monitors minerals from the mining to the smelting members: http:// Africa. process. www.resolv.org/ A due diligence system which includes third-party The PPA provides funding and coordination site-ppa/governance- audits and assessments of the mining locations and support to organizations working within the region committee-and-work- transport routes. to develop verifiable conflict-free supply chains; groups/ align chain-of-custody programmes and practices; www.itri.co.uk/index.php?option=com_ encourage responsible sourcing from the region; zoo&task=item&item_id=2192&Itemid=189 promote transparency; and bolster in-region civil society and governmental capacity. German certified Trading Chains Federal Institute for Supports units responsible for contracting Central Voluntary Geosciences and Natural Africa by creating a certification framework for artisanal www.resolv.org/site-ppa/ Resources (Germany) mining sites. (BGR) Conflict-Free Smelter Global e-Sustainability An initiative which offers companies and their Voluntary www.bgr.bund.de/EN/Themen/Min_rohstoffe/CTC/ Program Initiative (GeSI) suppliers a guide and tools to identify the origin Home/CTC_node_en.html together with the of the mineral supplies. This is how smelting and Electronic Industry refineries can be catalogued as “conflict-free”. ICGLR’s Regional Certification International Conference Establishes a certification mechanism for mining and Mandatory Citizenship Coalition Mechanism on the Great Lakes Region the trade of conflict minerals coming from the Great for member It holds a workshop twice a year which gathers (EICC)® (ICGLR) Lakes Region. countries hundreds of industry, government and civil society representative to discuss the best practices in this www.oecd.org/investment/mne/49111368.pdf matter. www.conflictfreesmelter.org/ Source: CONFLICT MINERALS DISCLOSURE RULE/SEC’s Actions and Stakeholder-Developed Initiatives - July 2012
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What we expect from our suppliers While specific due diligence requirements and integrate into their management systems the processes will differ depending on the mineral following five-step framework for risk-based on and the position of the company within the OECD Due Diligence Guidance for Responsible supply chain, companies should review their Supply Chains of Minerals from Conflict Affected choice of suppliers and sourcing decisions and and High-Risk Areas.
1 2
Establish strong company Identify and assess risk in management systems the supply chain Adopt a company policy Identify ‘to the best of their driven programmes, joint Structure internal efforts’ smelters or refiners spot checks at the SORs’ own management to support (SORs) in the supply chain facilities supply chain due diligence Engage with SORs to obtain Establish a system of controls mine of origin and transit and transparency over the routes conflict minerals supply chain Assess whether SORs have Strengthen engagement with carried out all elements of relevant suppliers due diligence according OECD Guidance Establish a company grievance mechanism Where necessary, carry OECD due diligence out, including through guide on mineral participation in industry- extraction
3 4 5
Design and implement a Carry out independent Report on supply chain due strategy to respond to third-party audit of supply diligence identified risks chain due diligence at Develop report finding of list identified points in the of SORs at risk supply chain Define risk management plan. Define scope Implement/track/monitor Execution on a regular basis. performance of risk mitigation Input other steps efforts Undertake additional fact and risk assessments for risks requiring mitigation, or after a change of circumstances
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responsible MANAGEMENT Materiality matrix
Specific Human Rights matrix Human Rights_ 10
Complaint For Telefonica, in accordance with the ‘United Nations Guiding Principles on Business and mechanisms Commitment to Human Rights Human Rights’, the human rights impact assessment is critical to business sustainability. Compensation In 2013, we have worked proactively to strengthen the commitment to respect them General sustainability matrix 10 Impact Assessment Integration of Findings Human
Rights relevance Stakeholder Training Commitment In accordance with these principles, Stakeholder relevance Stakeholder Since, in 2006, respect for human we have developed an explicit Our Technology Our Business rights became one of the pillars of commitment to respect the human Partners 0 10 our business principles and in 2012 rights of our stakeholders, including Impact on Company management 0 Impact on Company management 10 we became pioneers in conducting our employees, community a comprehensive assessment of members, customers and business the impact of our operations, based partners, as well as the millions of Our People on the UN Guiding Principles on people whose lives are affected by Business and Human Rights, our our products and services every goal during 2013 was to integrate day. those aspects which had been identified both globally and locally The development of our strategy Our Role Our Role in external procedures. has been based on five core in the Community for the Change components that cover our area of influence:
Our Our Our Business Our Role People Technology Partners Our Role for Change in the Community
We respect our people We recognize that as Our responsibility to By applying our products We are committed to by setting high labour, a leading technology respect Human Rights and services, besides exploring all relevant environmental, health provider with global covers our direct impacts our knowledge, to local opportunities of & safety standards, operations, our business and extends to our community challenges, engagement or as well as fair, equal can help to promote business relationships. we can address some of alliance with external and premium working – or be used to impede – Expecting high labour the greatest local needs stakeholders enabling conditions Human Rights. conditions, environmental with due regard for the creation of leverage performance and Human Rights. effecting systemic excellent health and changes and promoting safety management in our respect of Human Rights. supply chain is one way for Telefónica to leverage, and make the best we can to effect change and mitigate risks of abusive behaviour of business relationships.
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Telefónica has set Due diligence ➜ Start building a map of stakeholders and multi- Health and safety and establish common standards of behaviour for The final report on our impact assessment stakeholder platforms. We will establish suitable mechanisms to all our companies. In 2013, we up global work in 2012 served as a starting point for the avoid workplace accidents, injuries or diseases consolidated development and implementation of a working ➜ Monitor risks and opportunities associated with our work activity through strict In 2013 we continued with the efforts we made for managing key plan at corporate and local levels. In it, 15 priority compliance with all relevant regulations and the in 2012, increasing internal audits on data our model of aspects of human issues were identified for Telefónica, involving a Non-discrimination preventive management of workplace hazards. protection by 19%; continuing the training plan combination of risks and opportunities. Our Business Principles/Code of Ethics state: “We started in 2011 on data protection, participating responsible rights promote equality of opportunity and treat all As part of our commitment to achieving and in multi-stakeholder platforms and developing management The plan was structured to develop and people fairly and impartially, without prejudice maintaining high levels of protection for the various awareness initiatives focused on data strengthen several different projects on a as to their race, colour, nationality, ethnic origin, health and safety of workers, in addition to the privacy (Familia Digital, Eleven Paths, etc.). in our supply global and local basis, adapting them to the religion, gender, sexual orientation, marital implementation of a management system for different contexts in the 16 countries where the status, age, disability or family responsibilities”. safety and health at work which is coordinated Freedom of expression chain, reinforced assessment was carried out. The main lines of and efficient. In 2013 the audit process began, in At Telefónica we are convinced that the best action of the plan were as follows: ➜ Equal opportunities. The Telefónica standards accordance with the OHSAS 18001 standard, at way to achieve overall progress on respect for by other for the promotion of the employment of people all companies of the Telefónica Group in Spain. freedom of expression and privacy is through initiatives such as ➜ Share the findings with the areas involved at local with disabilities include our commitment to dialogue between governments, industry, civil level. equal opportunities for all, including people with Collective bargaining and society organisations (including human rights commitment to disabilities. freedom of association experts), investors, supranational organisations ➜ Integrate the findings, identifying the existing The Business Principles include the right of and other stakeholders. Therefore, in March human rights and policies, strategies and management systems. ➜ Diversity. The Diversity Project, initiated in 2012 our employees to belong to the trade union of 2013 we set up, together with a group of with the pilot programme in the European region, their choice and we do not tolerate any type of operators and manufacturers in the industry, the responsible trade ➜ Arrange internal and global working groups to continued in 2013 with the aim of creating a retaliation or hostile action towards those people Telecommunications Industry Dialogue Group on in minerals manage key aspects that appeared after the global structure and processes to highlight the who participate in union activities. Freedom of Expression and Privacy. assessment, such as the Working Group on diversity of our Group, as well as facilitating the Privacy and Freedom of Expression and the process of transformation of the company. ➜ In 2013 there were important developments in Children’s rights Working Group on Business and Children’s Rights. collective bargaining, as reflected in the chapter At Telefónica, as part of our business strategy, on Freedom of Association and Social Dialogue. we have been working actively in different ways for more than a decade on the promotion of and Working conditions in the supply chain respect for Children’s Rights. In 2013 we worked Our public commitment to sustainability in the to transform the traditional approach – which supply chain, taken on in 2010, has enabled us includes a recognition of the responsibility of to articulate the positive impact of our activities companies towards children and is often focused through an international value chain, which on the impact on the supply chain – into a more nevertheless has a high local component. global approach, as described in the UNICEF report Children’s Rights and Business Principles. ➜ More than 800 professionals in 19 countries. Areas of competitive advantage (opportunities) Deployment and management ➜ More than 15,700 registered suppliers from 73 of network infrastructure countries. We work to minimise the environmental impact of our activities, promoting best management ➜ About 84% awarded to local suppliers. practices in all the countries where we operate, Access to Health Inclusion and the adoption of environmental criteria in the Access to Access to ICT ➜ Volume of purchasing above 26,500 million euros. deployment of the network, and the participation Education Social Innovation of all employees in achieving these gains. ➜ More than 247,000 professionals at our suppliers perform key customer support activities in Privacy Corruption and bribery Latin America, playing a key role in customer We are committed to ‘zero tolerance’ regarding Freedom of Expression Corruption satisfaction. fraud and corruption, and a number of elements and Bribery are in place to constitute a proper control Language In 2013 we consolidated our model of responsible environment in all our operations. Non-Discrimination management in our supply chain, which is Health and Safety reinforced by other initiatives such as our Access to health Collective Bargaining commitment to human rights and to responsible In 2013 we committed ourselves to becoming and Freedom of Association trade in minerals. a major player in mHealth with products and Supply Chain Labour Restriction services that contribute to new, more efficient Areas of fundamental obligation (risks) Areas Conditions of Content Privacy and effective health models. At Telefónica we respect the rights and freedoms Child Deployment and of individuals, including the fundamental right Access to education Management of Exploitation to protection of personal data. Our Business We support education through the Fundación Infrastructure Principles contemplate this fundamental right Telefónica programmes, which are focused on learning and education, both through our
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direct intervention projects and through our all of its commitments with the establishment ➜ Adoption of the framework established ➜ To develop training materials and awareness Telefónica is commitment to educational innovation. We of the service in October 2013. Content by UNICEF, as a guide for integrated about the impact of Telefónica on human rights founder member implement and support the generation of creation on preventive health in the indigenous management of the impact of our activity on and the main international frameworks. knowledge, research, publications and support for local languages was planned, but due to the children. of the Industry the educational community. dynamics of the community and its grassroots ➜ In critical processes, to work with the organisations it could not be completed. Challenges stakeholders involved on understanding the Dialogue on Inclusion and access to ICT situation, impact analysis, and access to Privacy and Telefónica is committed to promoting Compensation/complaint mechanisms for complaint and compensation. More info economic, social and cultural development in mechanisms on the UN Global Freedom of the communities in which we operate and our Compact page commitment extends to ensuring that society as Even with the best policies and practices, Expression a whole can enjoy the benefits of information and Telefónica may cause or contribute to an adverse communication technology (ICT). impact on human rights.
Social innovation Inquiries and facts relating to our activities may The strategy of social innovation at the arise through different channels both locally and Telefónica Group aims to improve the lives of globally: this is the case with our specific channel Best Practices people, taking advantage of the opportunities for the Business Principles Office, a confidential offered by information and communication channel that allows our employees to seek advice Telefónica Colombia has developed various initiatives The protocol was generated through the compilation of technology. and raise issues relating to compliance with the and action plans resulting from diagnoses made locally existing practices in some areas of Telefónica Colombia. Business Principles, particularly when signs of in 2011 and 2012 as part of the overall assessment of the The refinement and alignment phase is currently under Language non-compliance are detected. impact of Telefónica on human rights. They include: way in the target areas, with a view to the subsequent At Telefónica we support the right of minorities implementation and dissemination of the protocol. to enjoy their own culture, to profess and practice The other stakeholders can access the various ➜ Training Course on Human Rights. As part of the due their own religion, and to use their own language. confidential channels provided on each of the diligence process and in order to strengthen capacity and ➜ Colombian Guidelines. Colombian Guidelines (actual title: portals that have been authorised for this awareness in relation to certain specific risks within the Guías Colombia) is a multi-stakeholder initiative comprised Initiatives that demonstrate this are carried out purpose. These channels can serve for them to company, in 2013 they worked on the design and usability of companies, civil society organisations, the Colombian at local level: provide their opinions or to inform Telefónica of of the human rights training course for employees through government and international organisations, united under any matters that may affect them. They can also the A+ training platform. They have set themselves the a common purpose: to identify and adopt clear standards ➜ Telefónica España. Telefónica España promotes collect information on commercial and corporate challenge of training 80% of the employees in Colombia for corporate behaviour in complex environments in terms respect for linguistic rights, facilitating the use of matters, and report any violations of rights of any during 2014. of human rights. Telefónica Colombia is participating the co-official languages of the country with its kind. as a member of this initiative. During part of 2012 and customers, employees, institutions and society ➜ Protocol on Relationship with Communities. Following throughout 2013, Telefónica Colombia participated in the in general. This means, among other things, that Milestones a diagnosis, in 2011 it was proposed that a protocol be construction of the Decent Work and Lands Guidelines, any client from Galicia, the Basque Country, developed as part of the process to strengthen internal currently in the final phase of adjusting by its entire Catalonia, the Balearic Islands and Valencia can ➜ Development of the Group’s Commitment to processes. This protocol includes the basic guidelines membership. be attended by telephone in either Spanish or Human Rights. of behaviour for the areas of Telefónica Colombia which in their co-official language and that they can have a direct relationship with communities and aims to ➜ ‘Business for Peace’. Telefónica Colombia leads the choose the language used on their bill. In recent ➜ Inclusion of the main findings in policies and prevent potential conflicts arising. It also aims to establish working group of the Local Network of the United Nations years, it has also promoted the incorporation key projects: responsibility in the supply chain, appropriate actions to reduce their impact in the event of Global Compact. It joined the platform in 2013, given the of co-official languages in the menus of mobile privacy and data protection, privacy and freedom local crises. local relevance of the issue of peace building in Colombia. handsets marketed by Telefónica and the of expression etc. inclusion of such information about each terminal on the Movistar website. Telefónica also offers ➜ The milestones achieved in the management of the possibility for its employees to take online the different aspects identified can be found in courses in co-official languages to improve their each of the chapters, which contain the progress relationship with customers. made in 2013 in the initiatives the company already had in place before the assessment. New ➜ Telefonica Perú. In Peru, given that 15% of the features this year include: Access to remedy population use Quechua as their native language and that this percentage is about 34% in rural ➜ Telefónica is a founding member of the areas, Telefónica continued providing its Quechua Working Group on Privacy and Freedom and Aymara customer care telephone service, a of Expression, setting up an internal service which handles more than one million calls working committee that provides support every year. to that group, as well as working on the implementation of the Guiding Principles on ➜ Telefonica Venezuela. Karawaretuy Privacy and Freedom of Expression. Employees Shareholders Suppliers Customers Society Telemedicine Service (El Paují, Bolivar State). The outpatient centre and telemedicine service Confidential Channel Mailbox of Shareholders’ Supplier Portal of Business Portal of Specific channel are a medical diagnostic assistance option for of the Business Office Telefónica Group Telefónica in each of the for Reputation and about 2,000 people. Telefónica-Movistar fulfilled Principles Office countries Sustainability
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responsible MANAGEMENT
Human Rights: respect 1 2 Best practices for children’s rights_ Acknowledgements Meet the responsibility Contribute to the ➜ El Ojo de Iberoamérica We have defined a new approach that allows us to consolidate and to respect and promote elimination of child labour 2012 give greater visibility to the initiatives we have been working on, children’s rights in our operations and · Gold - Sustainable CSR · Gold - Mobile Category where children play a major role in our supply chain ➜ El Dorado Festival 2012 At Telefonica we meet this responsibility The Telefónica Group meets with local · Gold in Cyber category in our own activities and business laws and international standards, · Silver in Outdoor category relationships. observing the minimum working age, · Grand Prize in Cyber Companies and children’s rights their services and exercise their influence on ensuring appropriate working conditions category We are in the midst of the digital revolution, economic and social development. Conversely, In 2012, we conducted a comprehensive and the impact on the health and safety where technology is able to transform the lives of some policies or business practices can cause assessment of our impact on human of young workers. Our supply chain is ➜ The One Show - people in the way they communicate, learn, have irreversible damage to children and threaten not rights, where children’s rights was one of made up of more than 15,000 suppliers Interactive fun, shop, share and learn. Children and teenagers only their development but even their survival” the issues discussed, forming part of the from 73 countries and, through our · Silver Pencil are key agents in this transformation and the 16 aspects we assessed. Responsibility in the Supply Chain policy inevitable key players of the future, but are often Also, in 2012 Telefónica participated – together and the monitoring activities to ensure ➜ FIAP 2012 among the most marginalised and vulnerable with a small group of international companies According to this study, the greatest compliance, we are actively working · Silver Sun - ‘Interactive’ members of society. At Telefónica, as part of from different sectors – risk comes from the use of child labour towards the elimination of child labour in Category in Latin America our business strategy, we have been working in the consultation and pilot programme by our suppliers as well as the misuse of our supply chain. actively in different ways for more than a decade conducted by UNICEF for the drafting of the CSR information technologies. For the overall ➜ DeVida Advertising 2012 to promote and respect their rights as part of our and Children’s Rights Guidelines. The experience management of these risks, we have In 2013, moreover, we reinforced this · Special Recognition business strategy and through different lines of gained there was invaluable for including children developed the initiatives contained in commitment by launching the platform action. as a special group in future assessments of the the chapters Sustainability in the Supply ‘Aquí estoy y actúo’ (‘Here I Am Taking ➜ Cannes Lions 2012 impact on human rights. Chain and The Proper Use of the Internet Action’), a sustainability project for the · Silver Lion To date, the recognition of the responsibility of by Children, from this report. eradication of child labour in companies in ‘Mobile France’ businesses towards children has often focused on Our framework for action and value chains in Latin America and category preventing and eliminating child labour. Based on the framework established in the report In addition, we encourage voluntary the Caribbean. · Bronze Lion on Children’s Rights and Business Principles by actions that promote these rights, in ‘Mobile France’ At Telefónica we worked during 2013 to evolve UNICEF, we have defined a new approach that both in support activities and those The most important achievements have category this traditional approach towards a more global allows us to consolidate and give greater visibility related to participation in public policy been the following: approach, as described in the Children’s Rights to the initiatives we have been working on, where (Spanish National Plan for Human Rights ➜ The Latin American Cup and Business Principles report drafted by UNICEF. children play a major role. and Companies, Consultation on EU ➜ Use the guide for more than 100 · ‘Public Good’ Category initiatives, etc.) and when working in companies in 12 countries of Latin “Companies have enormous potential to protect cooperation with other organisations America. ➜ Accenture Awards the rights of children through the way they (UNICEF, Save the Children, Child Online · Gold - Sustainable CSR produce and market their products, provide Protection, etc.) ➜ Presentation of the Methodological Guide in different international forums ➜ Clio Awards 2012 as a benchmark in their contribution to · Gold - ‘Mobile Spain’ the eradication of child labour. Category
➜ Recognition of the Guide and the ➜ New York Festivals 2012 online platform adopted by different · Silver - Philanthropic international organisations since its Appeals Traditional approach Focus on rights launch. Prevention of child Overview of the impact of the company on children labour in our own Design of our products and services operations and in our Marketing and advertising methods supply chains Decent work Philanthropic initiatives Prevention of child labour to protect children Protection in emergencies Philanthropic initiatives Relations with local government Children’s Rights and Business Principles, UNICEF, the Global Compact and Save the Children, 2012.
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3 4 5 6 8 10
Provide decent jobs for Ensure the protection Ensure that products Use marketing and Respect and support Reinforce community and young workers, parents and safety of children and services are safe and advertising that respects and children’s rights in government to protect and and caregivers in all business activities seek to support children’s supports children’s rights security arrangements fulfill children’s rights and facilities rights through them
We are convinced that the best way to We have an occupational risk prevention In our efforts to ensure that our products At Telefónica we ensure that our Telefónica does not hire underage Telefónica contributes to observance ensure the rights of children at home policy and a risk assessment procedure and services are safe and that through communication and marketing actions workers for positions related to physical of children’s rights, not only through its lies in ensuring decent work for parents in which especially protected workers them an online context is promoted fully respect the rights of children. security, such as nightwatchmen or own practices, but also by helping to and caregivers. For this reason, salaries are taken into account. Their purpose is which is more respectful of minors, Within our transformation programme, security guards, either directly or when strengthen the communities in which in our operations match the functions to adopt a set of preventive measures to Telefónica is working so that children can we are working to define a framework for outsourcing. its operates and where children live and performed and are always above the encourage improvements in the health take full advantage of new Information responsible marketing, in which special grow. prevailing minimum wage level in each and safety at work of this group and, and Communication Technologies (ICT), attention is paid to children. country. With regard to young workers, in particular, measures for pregnant while being taught to avoid misuse. Fundación Telefónica, through the we encourage decent employment workers, those who have recently given Proniño programme, contributes to opportunities and educational birth or those who are breastfeeding This applies in the field of marketing the development of communities by programmes. their children. In this last case, measures of our products and services (parental eliminating child labour, especially in have been established to prevent control, Kangaroo Net, Safety Pack, Latin America where, according to the ➜ ‘Think Big Schools’. First experience in situations that may adversely affect selection of educational apps, latest ILO report, it is estimated that Spain by Fundación Telefónica with the their health or that of their child. ‘Classroom 365’ and the ‘I’m Here’ over 12 million children aged between 5 aim of providing training in digital and service) and through sectoral initiatives to 17 years old are working. This number entrepreneurial skills to young people of With regard to our supply chain and as and partnerships with international is 1.6 million lower than in 2008. school age (14-16 years), whose most stated in our Responsibility in the Supply organisations. The best example of this outstanding projects could be included in Chain policy : is the promotion of the safe use of ICT on Think Big Youth. the website: www.familiadigital.net. ➜ Children under 18 who, in accordance ➜ ‘Think Big’. Social enterprise project with local law, are permitted to 7 9 created by Fundación Telefónica with participate in the labour market may Movistar, which helps young people not work at night or in hazardous between 15 and 25 years old to bring conditions. their ideas to life and develop their Respect and support Help to protect the children potential. During 2013, Fundación In any case, the action in question children’s rights in relation affected by emergencies Telefónica invested over €6.9 million shall be taken while considering the to the environment and to in this programme to support the interests of the child in accordance with development of more than 3,338 projects the provisions of ILO Convention 138 land acquisition and use and shall be consistent with the UN ➜ ‘Gothinkbig’. Initiative launched by Convention on the Rights of the Child. At Telefónica we practise a In emergency situations, Telefónica Telefónica UK in 2012, in collaboration comprehensive environmental policy to works to ensure that the children with the Bauer Media Group, with the aim reduce our carbon footprint, especially concerned have certain levels of of helping young people get on the career with regard to network deployment. We protection, such as having food and ladder through advice, inspiration and comply with environmental legislation drinking water. In 2013, the company promoting 30,000 work experiences for at local and international level on visual collaborated with seven NGOs – Action young people (between 16 and 25 years) impact, waste management, noise Against Hunger (ACF), UNHCR, Caritas by 2015. O2 created more than 3,000 footprint, etc., covering the general Española, the Spanish Red Cross, MSF, opportunities during 2013. population spectrum and especially Oxfam Intermon and UNICEF – in the children as a group which is sensitive to emergency situation following the environmental pollution. typhoon that struck the Philippines. The company contributed €300,000 via a Push SMS campaign to customers and employees donations.
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responsible MANAGEMENT Human Rights: Commitment_ We are committed to work proactively within our sphere of influence to avoid any kind of human rights abuses
Telefónica acknowledges that consistent Our commitment At Telefónica management of Human Rights is critical to our In line with our Business Principles, we are business success, and mainly because: committed to respecting the Human Rights of we are aware all people, including our employees, community ➜ Telefónica operates across countries with members, customers and business partners, that consistent heterogeneous Human Rights challenges and as well as the millions of others whose lives are management opportunities. affected by our products and services every day. of human rights Telefónica, especially commits to strive ➜ Developments in technology make Human Rights itself within its sphere of influence -including is critical to the risks and opportunities much more significant its personnel, business partners and other for the sector. Significance is increasing with the parties linked to its activities- to understand, success of our development of the “Internet of things” or “Big continuously learn, and improve if deem business Data”. appropriate to ensure to proactively avoid any kind of Human Rights abuses, as well as Telefónica is consequently committed to complicity in abuses of our business partners. respecting all internationally recognized Human Rights referenced in the Universal Declaration Our Human Rights approach is built around of Human Rights (UDHR), the International five core components covering our sphere of Covenant on Civil and Political Rights (ICCPR), influence: International Covenant on Economic, Social, and Cultural Rights (ICESCR), the International Labour 1. Our people. We respect our people by setting Organisation’s (ILO) Eight Core Conventions on high labor, environmental, health & safety Fundamental Human Rights, the ILO Convention standard, as well as fair, equal and premium 169 on Indigenous Peoples’ Rights, the UN working conditions. Convention on the Rights of the Child (UNCRC) and the UN Convention on the Rights of Persons 2. Our technologies. We believe that technology with Disabilities (CRPD). has positive Human Rights impact. When used appropriately, our products and services As members of the Global Compact since 2002, should facilitate, and not repress, privacy and we have assumed the commitment to respect freedom of expression. We recognize that and protect them, in accordance with its 10 as a leading technology provider with global Principles. Along the same lines, we respect the operations, our business can help to promote framework established by UN Guiding Principles – or be used to impede – Human Rights. The on Business and Human Rights. stakes grow higher every year as information
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Implementation We have developed a seven-step framework that serves as the foundation for management of Human Rights, the implementation of key practices across the Group, and the achievement of industry leadership. 5 7 Adaptation of our existing grievance 1 mechanism to Monitor and report 3 ensure it applies to communicate to relevant Human 6 progress and Creation of a Human Rights risks specific challenges both Rights commitment Assessment of our 4 globally and locally. that is aligned with our Human Rights impacts to each market. Continuous Business Principles and in each of our engagement with is being integrated into 2 markets. Provision of Human our stakeholders our existing corporate Rights training for to join collaborative relevant employees efforts that tackle and country-level policies: Incorporation of and suppliers that are industry risks and human resources, corporate Human Rights customized based on create innovative security, audit, social into our auditing the audience, issue and partnerships to innovation, regulatory, legal, framework. procurement, sustainability, geography. capitalize on leadership sales, marketing and product opportunities. design.
and communications technologies (ICT) 4. Our role in the communities. By applying our responsible to promote, coordinate, measure and ➜ We assess in a periodic way our Human Rights Telefónica become ever more important in how people products, services, besides our knowledge to report both, globally and locally, the development impacts of all our operations on an ongoing Telefónica expects all of its work, learn and interact with one another. We local community challenges, we can address and implementation of this commitment. basis. To best respect Human Rights, we extends respect henceforward recognize the important to have some of the greatest local needs with due regularly review and update our relevant policies, partners to show a human centered approach when we develop regard for Human Rights. Telefónica is committed to maintaining a processes and management systems. for human rights our services and products. transparent approach to management of our the same degree 5. Our role for the change. We also recognize Human Rights program, and thus encourages ➜ We also regularly review and strengthen to all its areas of of commitment 3. Our business partners. We recognize that our that respecting Human Rights can have periodic sharing, within our internal committees, anonymous grievance reporting mechanisms activity responsibility to respect Human Rights cover implications which are beyond our own direct the vision of our key external stakeholders on that allow our employees and others affected by our direct impacts and extend to our business sphere of influence. We commit to explore Human Rights. our operations to report suspected incidents of relationships. Expecting high labor conditions, every relevant opportunity of engagement or Human Rights abuse. We investigate and, where environmental performance and excellent alliance with external stakeholders enabling Improvement process appropriate, take remedial action to address health and safety management in our supply to create leverage effecting systemic changes reported violations. chain is one way for Telefónica to leverage, and and promoting respect of Human Rights. Telefónica is working to implement this make the best we can to effect change and commitment in all its business and countries ➜ We provide more transparent reporting about mitigate risks of abusive behavior of business Governance where operates. In this line: risks, incidents and action taken. relationships. We expect that all our business partners act in this line, including those one or The Corporate Reputation and Sustainability more steps within our value chain. Direction at Telefonica SA, with the participation of their counterparts in countries areas, is
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Good use of the More accessible Internet for children_ services_ 5. People_ Education_ E-Health_ Telefónica Corporate Sustainability report 2013 Economic dimension
People Materiality matrix
Specific privacy matrix 10 Privacy: an open Data Protection
Information and secure Internet for all_ security General sustainability Surveillance Public matrix policy Respect for privacy is essential for the development of the 10 digital society Transparency Privacy Stakeholder relevance Stakeholder Stakeholder relevance Stakeholder
0 10 Impact on Company management 0 Impact on Company management 10
Telefónica The universal and global nature of the Internet, technology that is based on the exploitation of has been active in the institutional debate taking The following are some examples of relevant For Telefónica, its easy access for multiple devices, the growing information. place ahead of the creation of a regulatory events: respects the number of social networks and applications, framework that addresses the needs of the ongoing storage of and access to large amounts of data Our commitment consumers and industry on privacy and data ➜ In February, Telefónica participated in a meeting rights and in the cloud make the Internet a tool of frequent protection. with Commissioner Reding and with the President regulatory review freedoms of use for both personal and business purposes. At Telefónica we respect the rights and freedoms of the Executive Board of ETNO. in the European Its widespread use has resulted in the digital of individuals, including the fundamental right In Europe, the European Parliament and the individuals, revolution, but this status as a universal and to the protection of personal data. Our Business Council continued throughout 2013 to discuss ➜ In March, Ronan Dunne (CEO of Telefónica UK) Union needs to participatory tool entails risks and challenges. Principles contemplate this fundamental right the proposed review of the European regulatory took part, along with Commissioner Reding, in a through Risks to users’ privacy, and challenges via the and establish common standards of behaviour for framework for data protection, presented by debate on data protection organised by European strike a balance blurring of territorial barriers and the legal all our companies to: the European Commission in January 2012. At Voice. protecting systems governing privacy. Telefónica we have drafted comprehensive and between legal personal data ➜ Protect the confidentiality of personal detailed analyses of the key issues discussed ➜ In May, Ronan Dunne returned to share the security and the The process of reform of the laws in the US and information entrusted to us, whether that of in Parliament and in the Council and met with stage with Commissioner Reding, MEP Sean Kelly both online and Europe is a perfect opportunity to include certain customers, shareholders, employees or suppliers. representatives of the European Parliament, the and Pierre Louette (Deputy CEO and Secretary development of global measures. One example is the proposed Council, the Commission and other stakeholders General of Orange) in an event organised by offline Regulation on Data Protection in the European ➜ Provide our stakeholders with relevant such as the EDPS (European Data Protection ETNO, GSMA, ECTA and CableEurope in the new services Union, which aligns the regulations across the 28 information about how we use and store their Supervisor) and the Article 29 WG (made up of European Parliament. Member States, closing the existing loopholes. personal data. national data protection agencies). However, it has yet to define its level of alignment ➜ In October, Telefónica participated, along with with the US model and that of other geo- ➜ Inform users on how to access and correct the In addition, during 2013 we participated a small number of European companies, in a economic areas. data we handle. in numerous high profile events where we meeting hosted by Commissioner Reding on the emphasised the position of Telefónica, which future of the Safe Harbour agreement for the The educational work involved in privacy is also a ➜ Store all personal information with appropriate argues that the ongoing regulatory review transfer of personal data between the EU and the line of action to be considered; given that ‘privacy’ security measures. If at any time this security must strike a balance between legal security United States. is far from being a universally shared concept. is compromised, we have to act quickly and and the development of new services. These From childhood and also in adulthood, training responsibly. interventions were complemented by other Telefónica also participated in the high-level and information on privacy is essential to ensure actions: advisory group, chaired by the President of that users are aware of their level of privacy and A changing regulatory Estonia, Toomas Hendrik Ilves, that has prepared are able to control their data. framework ➜ Leading the Working Group on Data Protection, a series of recommendations to Commissioner Trust and Security of ETNO (European Kroes on how to promote the use of cloud One challenge we all face as industry players The regulatory framework for privacy and Telecommunications Network Operators services by government. This advisory group, – both telecom operators and Over the data protection is evolving at European and Association). known as the European Cloud Partnership, is one Top service companies (OTTs) – is how to international level. One example is the updating of the implementation actions in the European combine the demands of privacy in the current by the OECD of the Privacy Guidelines Governing ➜ Leading through ETNO, an industry coalition Strategy for Cloud Computing. Telefónica has also environment, where technological possibilities the Protection of Privacy and Transborder Flows made up of the main European associations been involved in other implementation actions, grow exponentially with the development of of Personal Data. As a result, Telefónica, both (GSMA, ECTA, ETNO and CableEurope). such as the preparation of a privacy code for individually and through industry associations, cloud service providers.
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To ensure Digital Manifesto: an Open and To facilitate the development and Evolution of internal audits ➜ Venezuela, where more than 2,500 people, 37.3% Secure Internet For All implementation of this policy, the Privacy of the workforce, took part in telematic security respect for the Committee of the Group has been created, being courses. The Digital Manifesto is the new public chaired by the Chief Privacy Officer and made 19% rights of its positioning of Telefónica in the field of public up of key areas, both in terms of business and 37% ➜ Mexico, where emphasis was placed on policy for the digital world. The Manifesto in terms of security and infrastructure. Thus, 137% publicising the recent update to the Federal users, Telefónica highlights the challenges faced by public policies in addition to ensuring compliance with the Privacy Act, as well as strengthening the has created in unleashing the full potential of the Digital Privacy Policy, a single, clear and consistent induction courses to the company, with more World to the benefit of consumers, businesses public position on our privacy practices and data than 500 people given training, involving 17.7% the Privacy and government agencies, as well as providing 10 protection is ensured in all our geographic areas of the employees. recommendations to improve the user experience of operations. 2010 2011 2012 2013 Committee, on the Internet and promote greater investment ➜ Ecuador, where through e-learning, more in digital infrastructure. To ensure the alignment of the countries in than 1,100 employees were trained in the chaired by the Group, as well as the communication and classification and processing of information. In the ‘Chief Privacy Action lines adaptation of local actions, a Data Privacy Officer addition, 80 executives took a classroom-based has been appointed in each country. module on information security. In total 89.8% of Officer’ a) Policy and Privacy Committee c) Training and awareness employees participated in this training initiative. Having been approved by the Board of the Data protection and audits During 2013 we continued in both regions with Telefónica Group, this policy establishes In 2013 we continued with the efforts we made the training plan on data protection, launched in These training activities were also carried out at guidelines that any Group company has to follow in 2012, increasing internal audits on data 2011. the corporate centre, where around 260 people to protect the privacy of our customers and all protection by 19%. We performed nine audits on took the course of data protection. Also in the those stakeholders who entrust their personal bodies collaborating in the Proniño programme Telefónica Europe. Nearly 29,800 employees corporate centre, a global awareness campaign data to Telefónica. in seven countries in Latin America and 22 audits have had up-to-date training on privacy and on information security was developed which on Group companies, both in Europe and in Latin data protection. This represents approximately encouraged the implementation of practical The privacy policy sets common guidelines for America. 54.2% of all Telefónica employees in the region. measures, the use of mobile devices, the action, setting the stage for the development of The breakdown by country is as follows: United management of their personal and professional a privacy culture. The policy is built around three The most important aspects reviewed were as Kingdom, 6,758; Germany, 5,041; Czech Republic, passwords in the office or when telecommuting; pillars: follows: implementation of security measures in 4,981; Ireland, 640; Slovakia, 259, and Spain, the use of social networks, the use of wireless the treatment of personal data, control of access 12,059. networks, the use of cloud services, the sorting ➜ Self-regulation, in order to guarantee the rights to this data, quality of information, consent to the and processing of information, and security when of users and security, which goes beyond processing of data and the ability of the people Telefónica Latin America. Nearly 10,900 travelling, among other areas. international and local laws. concerned to exercise their rights of access, employees were given training in data protection, rectification, cancellation and opposition. information security and the use of social In addition to internal training, we conducted ➜ Privacy as an engine of confidence and generator networks, including: training workshops on data protection and of an optimum reputation for Telefónica. confidentiality, which were attended by local ➜ Argentina and Colombia. Over 2,100 and 3,500 organisations and institutions. One example ➜ Privacy as a key element to promote innovation, employees, respectively, were given training in is the workshop held in Costa Rica, which was welfare and prosperity in the digital world. Security and Social Networks. This represents attended by representatives of the International 13% and 98% respectively of the employees in Labour Organization, the Omar Dengo those countries.
10 policy recommendations to improve the digital 1 2 3 4 5 6 7 8 9 10 consumer experience and Build Digital Confi Create a Portable Open up mobile Promote Improve Transform Promote Open Create fairer Make Internet Evolve the to connect everyone to an dence through Digital Life for Operating interoperable transparency education, Innovation and policy frameworks available to policy models of open and secure Internet a safer Internet consumers by Systems, App Internet about the learning and Open Standards by establishing everyone by Global Internet experience and allowing them to Stores and other applications, conditions of teaching by widely principles and the same rules for establishing Governance by empowering use their data, digital platforms communication use for Internet adopting digital prevent that the same digital adequate by building citizens to be in information and to increase users’ and messaging services and the technologies and undue Intellectual services and conditions for on its existing control of their applications freedom, choice and services to distinction between services based on Property protection smarter regulation private investment foundations personal data. regardless of competition. improve consumer information and Open Resources restricts innovation by relying more on in broadband and through their devices or experience and advertisement and Standards. in the Digital outcome-based infrastructure. involvement of all platforms. foster competition. in online search Economy. policy making stakeholders in an results. and case-by-case open manner and supervision. on equal footing.
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Foundation, World Vision and the Ministry of Additionally, given the new trends in threats to Millennials, young people between 18 and 30 ➜ Quarterly debates organised by the Centre for Telefónica and Labour and Social Security. information security at companies, and taking years, have great expectations for privacy and Information Policy and Leadership, covering 95% of young the Financial into account the fact that a different approach individual liberties; they believe they should have the challenges and approaches in order to keep people between With regard to actions aimed at raising awareness is required to address the prevention and the right to choose who they marry and vote for, personal identity private and to protect the right Times asked about the safe use of technologies, we should mitigation of these attacks, Telefónica presented to express themselves, enjoy their privacy and of expression. 18 and 30 are mention the Digital Family platform, a resource its security operation centres, a comprehensive have access to healthcare. 12,000 young centre for parents, which aims to promote digital offering of security solutions which go well ➜ Telefónica took part in Cybersecurity Month calling for stricter education and help to create a better Internet beyond traditional protection. 91% of its members are concerned about privacy, with the National Institute of Communication people belonging environment for children which ensures their data security and the personal information Technologies (INTECO), the Secretary of State for measures to to the ‘Millennial privacy. The website, launched in early February In all these actions we consider the role of circulating on the Internet. 95% believe that more Telecommunications and the Information Society protect their 2014, will be launched later in other countries our suppliers to be vital, so we are promoting important safety measures need to be promoted (SETSI) and the main telecommunications Generation’ about served by the Group. collaboration in the field of online security. to protect one’s identity on the Internet. companies, which participated actively in personal data One example is the joint workshop on Network awareness raising activities for Cybersecurity their expectations As regards the general public, one highlight is the Security with Huawei, held in April 2013. Customers Month. and identity book published by Fundación Telefónica, which We celebrated Innovation Security Day, an event and concerns covers the debate over data privacy and security. This new line of action applies to manufacturers that was attended by more than 700 customers. ➜ We held the 3rd Telefónica Global Meeting on while surfing the and service providers. In February 2014 we closed At the event we presented our cybersecurity Information Security, which brought together Internet This paper examines the origins and evolution an agreement with PricewaterhouseCoopers to services offering for businesses and end users. 136 experts from Spain, Brazil, the USA, Peru, of the debate, based on contributions from market cybersecurity services jointly. Comprising business solutions and in-house Colombia, Chile, Argentina, the UK, Germany academic and business experts from the US development, it covers the entire cybersecurity and the Czech Republic. At the forum there was and Europe. It includes a contribution from As regards our social platform, Tuenti, in 2013 it management cycle of our customers, focusing on an emphasis on the importance and the need Commissioner Viviane Reding, as well as introduced three new guides for users, parents prevention, detection and response. for visibility to integrated into security matters, comments by academics and companies such as and teachers. hence the participation of our main partners: Facebook, Orange, Microsoft, Telecom Italia and Institutions and opinion leaders Fortinet, Westcon Afina, HP, Arbor, Alien Vault Telefónica. Also, in January 2013 it launched a privacy In addition to the actions described above with and McAfee. simulator for social networks. the new regulatory framework in Europe, the Security in our services Telefónica Group is constantly exploring new Responding to the fact that security and privacy Knowing the expectations challenges and approaches to keep identity have become a key issue for both businesses of our ‘stakeholders’ personal and private, protecting the rights to and users, Telefónica has launched a new line of privacy and the freedom of expression. In 2013 business, Eleven Paths, which features a highly ‘Millennial Generation’ the major initiatives undertaken were: regarded team from the world of information Telefónica and the Financial Times conducted security. a survey which looked at more than 12,000 ➜ Roundtables organised by European Voice and members of the Millennial Generation from 27 sponsored by Telefónica, with the participation Eleven Paths was born as a type of innovation countries. This has been the largest and most of a broad representation of stakeholders laboratory, with the aim of radically changing the comprehensive survey to date. belonging to the political and business sectors process of development of products and services and civil society. The topics covered include data in the field ofsecurity. protection and cybersecurity.
Right or privilege Tuenti Guides To choose who you Right to vote Freedom Medical care A well marry of Expression Privacy paid job It’s a right They have high expectations 82% 79% 76% 75% 66% 55% about their freedoms and privacy, but many User Guide Parents’ Guide Teachers’ Guide believe that a Intended to allow you to get the most out An assistant to show how Tuenti works, Shows what teaching uses can be made of well-paid job is Tuenti, with a special emphasis on privacy which also teaches younger users about this social network for young people and It’s a privilege 18% 21% 24% 25% 34% 45% a privilege. and security. safe navigation. provides safety advice.
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people Freedom of expression_
Respect for freedom of expression is produced through dialogue among governments, industry, civil society and other interested parties
In March 2013, These days, any action in the online world can The Dialogue Group has developed Guiding be considered an act of freedom of expression. Principles for Freedom of Expression and Privacy the Telecommuni- It follows that guaranteeing privacy is ever that address these rights in the telecom sector. more important, as is protection of freedom The Principles, signed on 6 March 2013, provide cations Industry of expression itself. Farhan Haq, alternate a common framework for developing corporate Dialogue Group spokesman for the UN, has ratified this: “Freedom policies and processes related to freedom of of expression cannot exist without protection of expression and respect for privacy in the sector, for Freedom of privacy”. and explicitly explore the interaction and limits of the duty of a government to protect human rights Expression and In this context, the resolution on the Right to and the corporate responsibility of telecoms privacy in the digital age approved in November companies to respect them. Privacy was set up 2013 by the General Assembly of the UN, is especially important as it establishes that Currently, the Principles have the backing of individual rights are universal and must be manufacturers and operators like Alcatel-Lucent, protected both online and offline. AT&T, Millicom, Nokia Solutions and Networks, Orange, Telefónica, Telenor Group, TeliaSoner and At Telefónica we are convinced that the best way Vodafone. to achieve global progress on respecting freedom of expression and privacy is through dialogue The Dialogue Group recently published its between governments, industry, civil society first annual report covering the main actions (including experts on human rights), investors, carried out and progress made, one year after supranational organisations and other interested foundation. parties affected.
With this in mind, Telefónica set up the Telecommunications Industry Dialogue Group for Freedom of Expression and Privacy in March 2013, together with a group of other operators and manufacturers from the sector.
More info Link to the annual report of the Dialogue Group
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The Guiding Principles for Freedom of Expression and Privacy at Telefónica
Guiding principle Telefónica programme Guiding principle Telefónica programme
1 Create and/or maintain relevant policies, Our Business Principles, as revised in 2010, recognise the right to privacy 6 Raise awareness and train relevant Telefónica Group has designed a specific plan to train and raise awareness with Board oversight or equivalent, as the basis of a relationship of trust with our stakeholders employees in related policies and among employees, in the policies and processes relevant to them. This outlining commitment to prevent, processes continuous training programme is carried out both in person and online. An assess, and mitigate to the best of As such the Group has a Privacy Policy approved by the Board in March example of this is the effort made in Latin America, where the number of their ability the risks to freedom of 2013 which has to be complied with in all the countries in which we people trained in privacy and data protection rose by 65% in 2013. expression and privacy associated operate with designing, selling, and operating As such the Group has appointed a Chief Privacy Officer, who heads the 7 Share knowledge and insights, where We consider dialogue with our stakeholders fundamental to identifying telecommunications technology and implementation and monitoring of the Policy and is supported by local relevant and appropriate, with all and mitigating the risks, as well as to developing new business telecommunications services Data Protection Officers relevant and interested stakeholders to opportunities. We believe that both transparency and sharing knowledge improve understanding of the applicable with these groups are key to applying these Guiding Principles. In this Concerning security management, the Group has its Corporate legal framework and the effectiveness context, the following should be mentioned: of these principles in practice, and to Information Security Policy, based on international standards and - The round tables organised by European Voice. Among the subjects dealt provide support for their application and updated according to growing international demands in the area of with were data protection and cybersecurity security. As well as undergoing specific training in these Policies, all our development employees also have access to training in the Group Intranet - The quarterly debates organised by the Center for Information Policy and Leadership, where challenges and approaches to maintaining personal identity confidential to protect privacy and freedom of expression are discussed, 2 Conduct regular human rights impact Respect for and commitment to human rights is one of the bases of our assessments and use due diligence Business Principles. So, and in line with the framework of the Guiding - Telefónica participated in Cybersecurity Month processes, as appropriate to the Principles on Business and Human Rights, in 2012 we performed an - III Telefónica Global Information Security Conference, where 136 experts company, to identify, mitigate and assessment of all our operations to evaluate the overall impact of our from Europe and Latin America gathered manage risks to freedom of expression activity, with the help of Business for Social Responsibility (www.bsr.org). and privacy – whether in relation to The assessment has let us define a formal process for proactive handling particular technologies, products, of risks and taking opportunities, as well as involving our principal services, or countries – in accordance stakeholders. The exercise carried out allowed us to identify privacy and 8 Report externally on an annual The present report is a synthesis of the progress made by Telefónica Group with the Guiding Principles for the freedom of expression as high-risk aspects for the sector; in search of a basis, and whenever circumstances on privacy and freedom of expression Implementation of the UN ‘Protect, global solution we helped to create the Dialogue Group on Freedom of make it relevant, on their progress in Respect and Remedy’ framework Expression and Privacy implementing the principles, and as www.telecomindustrydialogue.org appropriate on major events occurring in this regard
3 Create and/or maintain operational Telefonica has formal processes for handling data requests from local processes and routines to evaluate and or governmental authorities. These processes are the responsibility of 9 Help to inform the development of policy Telefónica believes that the best way to achieve global progress on freedom handle government requests that may the departments of the General Secretary and Security in each Group and regulations to support freedom of of expression and privacy is through dialogue among the social agents have an impact on freedom of expression company expression and privacy including, alone implicated. Evidence of this is our Digital Manifesto (www.digitalmanifesto. and privacy or in cooperation with other entities, telefonica.com) published in January 2014. The Manifesto highlights seeking to mitigate potential negative the challenges to be resolved by public policies to free up the whole impacts from policies or regulations potential of the digital world for the benefit of consumers, companies and Adopt, where feasible, strategies to In addition to the formal 4 public authorities alike, while it offers 10 recommendations to improve anticipate, respond and minimise processes indicated above, the the Internet user experience and promote greater investment in digital the potential impact on freedom of recent creation of the figures of infrastructure expression and privacy in the event Chief Privacy Officer at global level that a government demand or request and Data Protection Officers in is received that is unlawful or where the different companies, makes 10 Examine, as a group, options for This aspect, currently being debated governments are believed to be misusing the procedures and processes implementing relevant grievance internationally, is being explored products or technology for illegitimate that affect the privacy of our mechanisms, as outlined in Principle 31 within the Dialogue Group purposes customers more uniform of the UN Guiding Principles for Business and Human Rights
5 Always seek to ensure the safety and Health, safety and welfare at work are three pillars of Telefónica, not only liberty of company personnel who may to guarantee protection for staff, but also to have a direct influence on be placed at risk their job satisfaction in the Company. With regard to physical safety, global security managers have established a series of guidelines specific to the risks identified in each country, in addition to covering the actual process of movement
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Materiality matrix
Specific ‘safe internet for children’ matrix 10
Products and services
General sustainability Strategic alliances matrix Safe use of 10 Internet for Education children
Self-regulation Stakeholder relevance Stakeholder
Safe use of Internet for children Stakeholder relevance Stakeholder
0 10 Impact on Company management 0 Impact on Company management 10
people During 2013, the child protection strategy has be applied in stages until we achieve uniformity damaging content, whether by mobile, Internet been reflected in an internal Rule which has taken in all the actions we carry out at Telefónica to or TV. Among other things, we offer antivirus into account the commitments reached within promote safe use of our services by the younger programmes and content filters to guarantee ICTs for children_ the CEO Coalition and the ICT Coalition. members of the family. safe navigation on the Internet. Similarly, adult content on the Company’s TV services is offered This Rule is mandatory across Telefónica’s Products and services subject to a parental PIN code. Telefónica promotes an environment where minors can use new OBs and it will be implemented step by communication and information technologies while avoiding risks step and progressively until we achieve the Part of the strategy of Telefónica to leverage Digital Family arising from misuse or lack of awareness homogenization in all the initiatives we carry out the better use of its services is based on the In the previous year (2012), we developed, at Telefónica to promote the better use of our design of specific products and services that together with the Interactive Generation services by all the members of the family. promote the positive use of ICT by both children Forum, Digital Family (www.familiadigital.net), and teenagers, and tools that prevent them which is a resource centre for parents aimed at The said Regulations shall be of obligatory from being victims of abuse by malicious people boosting digital education and helping to clarify compliance in all countries, and the measures will and from getting access to inappropriate or their doubts about ICT.
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Members of the CEO Coalition, Self-regulation ICT Companies’ Coalition in 2013. In January 2012, 30 companies from the To encourage Telefónica participates in numerous initiatives Information and Communications Technologies correct use of the sector so as to multiply the efforts to sector announced the launch of the ICT achieve a common goal: to offer the best possible Coalition for safer use of the Internet by children of the new environment for children on the Internet. and teenagers. At the end of 2013, each of the companies submitted a report with the communication Alliance of mobile operators commitments that it had undertaken for each technologies, it is Telefónica is a founder member, since 2008, of line of action of the ICT Principles, and which will the Mobile Alliance Against Child Sexual Abuse be audited in 2014 by an external professional indispensable to Content, and will proceed to block this kind of who, following analysis and verification of the content proactively, following the guidelines and information supplied by each company, will issue have the backing lists provided by the Internet Watch Foundation. a report on its veracity. These documents will be available at www.ictcoalition.eu of the whole National Code of Conduct sector and civil Since 2007, Telefónica has been part of the The ICT Principles are supported by companies Committee of the National Code of Conduct for from throughout the ICT sector: from network society safer use of mobile services by children, along operators to device manufacturers, together with the other principal operators in Spain. with content providers, search engines, etc. The Principles deal with key issues and hot topics As an outcome of this collaboration, an icon such as content, parental control, handling of was introduced on operators’ web pages, which abuse and misuse, child sexual abuse images and The interactive portal offers high quality supported by a virtual teacher who responds to is easily identifiable by users and which allows control of privacy, in addition to education and Telefónica is part content, news section updated periodically, doubts and queries. them to alert Protégeles, which is the official awareness-raising for children and teenagers. of the Monitoring and other information of interest, It has been node of Inhope in Spain, should customers come developed in collaboration with prestigious Complete K-12 education solution from across Internet content that could be deemed Strategic alliances Committee of the organisations such as European Schoolnet, Telefónica Learning Services potentially illegal. In 2012, a downloadable the University of Navarre, Insafe, EU Kids Based on the training and education experience application for smartphones and tablets was Telefónica is aware that to foster the better use National Code of Online, Childnet International, Protégeles and acquired during the last 10 years, this offers a developed, using the same icon designed for of the new information and communication Conduct for safe PantallasAmigas, to name just some. The web complete end-to-end solution for K-12 education. the webs, and which also allows users to alert technologies, we need to build strategic alliances is already available in Spain for the Movistar The package is composed mainly of TLS in- Protégeles when using these mobile devices with civil society; for instance, we should mention use of mobile brand and will soon be made available in other house developments like the virtual learning to access the Internet. In 2014 the updated our collaboration in the different countries with countries in Latin America. environment WeClass. This is an environment and more completed version of the app will be Inhope and Insafe’s nodes such as Protégeles, services by that incorporates different activities for the presented. Childnet and FSM, and other non-governmental Hotlines different profiles of an educational centre organisations with similar aims to Telefónica such as children Collaboration with hotlines, as channels to report (teachers, students and parents). WeClass allows Coalition of CEOs for a better Internet for PantallasAmigas, Red Papaz, and ASI. Also worthy of about content that might be considered illegal, is users to: create Mi clase digital (My digital class), children (CEO Coalition) mention is our participation in initiatives promoted one of the priorities of the Rule. All our countries design syllabuses according to student level, During 2013, all the companies that make up by the industry itself, the European Commission and must insert an icon on their webs linked to the create repositories of content, maintain direct the CEO Coalition have been busy implementing the International Telecommunication Union, among local hotline, or in the event that the country does online contact between families, students and the measures to which they had committed others. not have one, the hotline of their choice member the educational centre, encourage cooperative themselves at the start of 2013, the final results of Inhope. work, and, in short, adopt the use of ICT in the of which were submitted to the European Without these alliances, it would not be possible to classroom. Commission in January 2014. carry out all the activities we are engaged in, whether The case of Spain should be mentioned, where, training or raising awareness, and nor would the ICT together with the other operators and Protégeles, Education This cross-industry collaboration has facilitated sector be in the position to offer effective global an App for reporting and seeking for help has the joint search for solutions that require measures to ensure that its services are used to their been developed for smartphones and tablets . Among the educational activities that have taken intervention at various points in the chain of best advantage while avoiding unnecessary misuse. Or the case of Colombia, where Telefónica has place there are workshops for parents (held in value: to deepen relationships between the contributed to establishing the first hotline schools) on the better use of social networks by industry and those organisations that defend the Thais is why this pillar is so important, and it is member of the Inhope in Latin America, called Te teenagers, leaflets in the shops, collaboration on needs of children in the digital world; to bolster transversal to strategy, because this is what allows Protejo. This hotline also has an App that can be national initiatives, etc.; everything that helps to projects and good practices already under way, all the initiatives undertaken to achieve the expected downloaded from the principal app stores. take maximum advantage of ICT, while avoiding and innovate in products and services to build level of success. misuse. a safer environment for Internet use from all Aula 365 (Argentina, Colombia and Peru) available platforms (PC, tablet, smartphone, etc.), Aula 365 is a free educational support service In 2013, Interactive Generations trained and for the different kinds of Internet access with multimedia content for the students. over 7,000 children, parents and teachers in (fixed, mobile, wif, etc.), as well as to develop Through this portal, we at Telefónica have made responsible use of ICT, thanks to sessions given closer relationships with Law Enforcement advanced Web 2.0 tools available to help the by the organisation’s own volunteers, numbering Agencies and similar bodies. children of our broadband customers to do their more than 55 in Spain, and by talks both by homework from home, to improve the school experts from the University of Navarre, and performance of students of all ages. The web is diverse collaborators of the Forum.
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people Materiality Matrix
More accesible services_ Specific Accessibility Matrix 10 At Telefónica, we are convinced that technology should be available to every person, business and public administration so that they can Be more_
Product and Service We firmly believe that the digital revolution attention paid to it as a segment. However, it Public-Private Development Radio Me is a Overall Sustainability Alliance we are immersed in needs to generate new represents an enormous number of potential Matrix service created opportunities for everyone, not just for a few. users of mobile technology, to the extent that 10 this has become a key element of economic and to contribute Telefónica has understood the need to evolve social inclusion. towards becoming a digital telco which is capable Stakeholder Relevance Stakeholder to bridging the of improving people’s lives. We also believe The Company, following the guidelines of the Accessibility digital divide for that these opportunities must be available to Convention Human Rights of Persons with everyone, including people with disabilities Disabilities and by the hand of national and Stakeholder Relevance Stakeholder older people and and older people. In other words, an Accessible international associations of disability has Digital Telco. developed Telefónica Accessible program in 0 10 those not familiar Europe and Latin America. Impact on the Management of the Company 0 Impact on the Management of the Company 10 According to the latest data published by the with technology International Telecommunication Union, the Telefónica is a cross-project accessible also to number of active smartphones is already over link different areas of business where Telefónica 1 billion. These are known as The Next Billion. operates, links to the various departments that make up the value chain of the company. This There is also another group that represents over cross-project is divided into four main areas: Wayra start-ups to improve the quality of life for people 1 billion, which we can call The Other Billion, and Leadership, Customer Orientation, Internal represents the number of people with disabilities Culture and External Diffusion. with disabilities: around the world. This is a very significant group which up until now has not had particular Prodeaf. Software for translation of Portuguese text and speech to sign language, in order to aid communication between deaf and hearing impaired people with hearing people. All this through an avatar. It is Telefónica accessible. Definition and scope available through to web, tablet and smartphone. prodeaf.net Comprehensive project to promote ICT accessibility, which includes both the elimination of uSound. Application that improves the quality of life for people with barriers, such as generating opportunities for value creation. hearing problems and and help to prevent hearing damage to the population. Usound leverages the processing power of the smartphone to function as a digital hearing aid, after entering data audiometry Segmented Customer Market Research R&D&i Procurement Industrialization (or performed a hearing test from the app itself). Usound allows Commercialization care proper hearing in remote transmission of audio, video and audio files. Market .New accessible Accessibility and Include new Marketing campaigns Include accessibility usound.com.ar Research about products and ‘Design for all’ attributes to that include the specifications in call demographiscs en solutions based on criteria included in prioritize accessible segment of people centers, webs and Biglauncher. Through an interface, this initiative changes the screen economics of people the ‘Design for all’ the procurement P&S proposals with desabilities. shops. colors, contrast, size, etc.., for people with visual impairment and / or with disabilities. concept, developed requirements. through the pipeline. Accessible advertising elderly. www.biglauncher.com/es in partnership with Acquisition of P&S to campaigns. representative ‘social suppliers’. external partners. Insane Logic. IPad apps for the education of persons with speech or learning difficulties. Insane Logic builds communication tools available to give voice to those struggling to make themselves understood. www.mychoicepad.com
Training ad awareness activities around accessibility in its social, technical and business Remote Assistant. Geolocation system of relatives/friends with visual Internal culture: dimensions. Recruiting, development and retaining processes in place to include people with disabilities, in order to know where they are. It also incorporates a video for the carer in order to let him/she see where the user is going. In addition, Radio Me. Amplía y facilita las disabilities. Supervisión of targets accomplishment. oportunidades para comunicarse de the smartphone itself detects obstacles and warns the user via vibrations. personas de más edad. Communicate all dimensions of accessibility within business processes. Promote www.mapzproject.org Externa external dialogue with associations. Create external adherence through bussiness positioning: awards.
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In 2013, Telefónica celebrated the 40th anniversary of ATAM, Telefónica’s social entity which is an expert in people, disability and dependence, boasting 34 participant firms and over 52,000 partners among its active
In this way, people who are deaf can access Other Initiatives subtitles or translate narration in a foreign In addition to these services which were launched language, or if they prefer they can see an image in 2013, Telefónica continued to offer accessible showing a Spanish sign language translator that is terminals, bills in large type or Braille (requested synchronised with the film’s dialogue. People who through the 1004 telephone service), the Spanish are blind can also enjoy the films through audio. sign language remote interpretation platform and the intermediation centre in an alliance with the 112 Service Ministry of Health, Social Policy and Equality. One of the greatest demands of people with disabilities is having safe, swift access to the It continued to train employees in customer care emergency services. To this end, Telefónica for people with disabilities and to work within signed an agreement with the 112 Emergency Call the framework of the Telefónica Ability Awards Handling Service in Catalonia and the Catalonian to continue to promote the mainstreaming of Federation for the Deaf to develop an application disability in all types of business. aimed at this group. Along these lines, in 2013 the Ability Club The application contains three pictograms organised jointly with the BBVA Premios Integra that represent the most common emergency awards a workshop to promote purchasing requirements: the police, the fire service and from special employment centres (Centros emergency medical assistance. These in turn Especiales de Empleo, or CEEs) and make contact indicate situations of abuse, aggressions, fires, with firms interested in this type of social robberies, domestic accidents and health procurement from CEEs. problems. It also includes videos that offer advice to minimise the risks while the emergency In 2014, Telefónica has launched the third edition services are on their way. of the Telefónica Ability Awards, to continue increasing the ecosystem of organisations that Additionally, users can have their data registered work in favour of finding the value of disability in ‘Walker +’, Outstanding products and services Radio Me expands and facilitates communication previously so that in any situation they can be business models. developed in 2013 opportunities for older people and those not geolocated by the emergency services via the 112 developed with familiar with technology, offering them the system. Also in 2013, Telefónica celebrated the 40th possibility of integration through using the new anniversary of ATAM, the social entity at the Universidad Radio Me forms of social communication as a door to enter The Walker + project has been developed as part Telefónica which is an expert in people, disability This is a service that was created to contribute the world of digital services. of the Telefónica Chair at the Universidad de and dependence, boasting 34 participant firms Carlos III in to bridging the digital divide for the older Alcalá de Henares in Madrid. This device allows and over 52,000 partners among its active Madrid, will population and people who, for various reasons, Whatscine people with disabilities, especially children employees. The aim of the Association is to are not active users of technology. It allows This is a tool created with Universidad Carlos III affected by cerebral palsy, to walk. Thanks to this enable people with disabilities to have better allow people voice messages to be received and sent through in Madrid which allows people who are deaf and equipment, children can walk around their school access to employment, as it understands this WhatsApp- or Line-type messaging applications, blind to enjoy the cinema through an accessibility playground, their home or the park. to be a key aspect of full integration. Under with disabilities, without needing to use a smartphone. The design system. To access this experience, the user just the principles of its enabling model, it works and functions of the service were designed for has to download the free app and install it. The walker consists of a harness which is so that people with disabilities can develop especially this type of user. Through a device as familiar adjustable for different heights and weights, professionally. children with as the radio and by just pressing two buttons, Once at the cinema, which must have already which is placed on the child’s body and rests on older people and those who are not used to installed the accessibility platform, the user a metallic structure that supports the child’s ATAM has an individual aid system which reduces cerebral palsy, technology connect simply and intuitively with connects to the integrated Wi-Fi network in the weight. With a slight push, the child can move the financial cost involved in having a disability. their family and friends. Older people do not cinema and chooses the subtitle options (English around easily. The system also incorporates two In 2013, it awarded 3,719 subsidies to 2,179 to walk l need to learn to use any new technology or face or Spanish), subtitles for deaf people, audio buttons which are associated with an electronic people for a total amount of €6,897,015 and unfamiliar screens, nor are they required to description or Spanish sign language, depending system and allow voice messages to be activated overall almost 16,000 people throughout Spain master or know how to handle the functions of a on the user’s needs. and lights to be turned on or off, or which can be benefited from the work of the ATAM through two smartphone, a requirement which in many cases used as a computer mouse, enabling interaction basic lines of activity: assistance to families and leads them to reject and abandon the idea. with their surroundings. integration into the workforce.
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Telefónica’s technological solutions mean that quality education can reach any student, no matter what their location or family situation
with, post assessments, monitor students’ performance and set work, among other things, while students and their parents can consult the contents, access the work and exercises, update their schedules and consult their marks, etc.
Another recently launched product is WeShare. Telefónica Learning Services launches WePack, a solution for colleges, pioneer in the educational world. This is the first truly family-friendly tablet. It includes three profiles (parents, family and minors) and, thanks to a newly conceived safe browsing system, allows children to go online in a protected and totally reliable environment. If PEOPLE any unpleasant situation does arise, the child can press an alarm button, appraising their parent of Mancha regional government, to be introduced in the situation and giving the option of reporting the 2013/2014 academic year. Best practice Digital education_ it online, thanks to the Protégeles application offered by the association of the same name, These solutions, thanks to the use of technology, The WeClass education the Spanish benchmark in protecting minors mean that quality education can reach any platform has been ICT use can have a significant impact on achieving higher quality education, as well as on the internet. For children aged under seven student, no matter what their location or family successfully rolled out at years old, WeShare incorporates an innovative situation. And, in addition, all this takes place in a the Colegio San Gabriel contributing to the sharing of innovative knowledge, improving competitiveness and application from Infantium that allows children to safe and reliable environment. school in Aranda de Duero reducing social inequalities. Telefónica Learning Services (TLS) is the Telefónica Group learn through play, while the platform learns with (Burgos). The process company which specialises in offering comprehensive technological solutions for education the children and offers them new educational Milestones began with intensive pathways based on their individual progress. training for the teaching ➜ Introduce and begin implementation of WePack staff on how to use the For universities, Telefónica Learning Services has in Spain technology to offer worked hand-in-hand with Universia to develop better education to their the MiriadaX platform, which offers free MOOCs ➜ Begin distribution of WeShare in Spain students. WePack is Applying technological breakthroughs to the To this end, during 2013 TLS launched a (Massive Online Open Courses) to anybody who world of education allows the productivity of both comprehensive solution for educational has registered as a user (registration is also free). Challenges a comprehensive the teachers and the students to flourish, through establishments through an educational package These courses are offered by the more than incorporating systems that foster personalised covering all classroom needs, called WePack. In 1,000 universities in Spain and Latin America ➜ Extend the deployment of WePack and WeShare solution for learning and ubiquitous access to contents. addition to providing tablets for the students and who are part of the project. Students only pay to Latin America and other European markets Telefónica Learning Services (TLS) has increased teacher, as well as management, administration a modest sum if they wish to obtain the official educational its range of products and services to play a and security, WePack brings together certificate. institutions leading role in the world of digital education, connectivity from Telefónica in the classroom with the goal of encouraging the inclusion of and advice from educators and counsellors Another noteworthy product is YPD Box, which covers all technology in the educational environment, thus to accompany the teachers in this process of a pioneering initiative in entrepreneurship taking advantage of its potential to integrate in transition towards digital education. The solution training, with the aim of developing people’s classroom needs the process the most disadvantaged communities includes the WeClass platform, which is a virtual entrepreneurial talent and spirit through four and sectors and to offer personalised education learning environment (VLE) where teachers can pillars – energy, creativity, communication and that fosters students’ abilities. upload their own contents or content provided leadership. This tool was already picked up by by the publishing companies they usually work the regional education office for the Castile-La
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PEOPLE e-Health_ At Telefónica, we place our technology at the service of improved healthcare for all
In 2013, Europe healthcare outside the hospital environment. Parkinson’s disease, a neurodegenerative Chronic illnesses currently represent around 80% Telefónica condition that affects a patient’s motor skills, has of health costs. In this respect, Telefónica has been the focus of two projects that Telefónica identified e-Health services as being one of its presented its new R&D has participated in. HELP and REMPARK priority areas for research into the development were developed as part of a European funding of innovative applications that contribute to platform which framework. These are research projects involving increasing the quality of life of people and allows chronic the remote monitoring of motor symptoms and improving the productivity of the system. remote, real-time management of the treatment patients to be for this illness. Latin America monitored In 2013, Telefónica R&D also participated in Telefónica’s e-Health features were reinforced in another European research project, Mobilesage, 2013 with new acquisitions, including Axismed, which created the first help-on-demand mobile which occurred at the beginning of last year. service, specifically designed for elderly people Axismed is the largest Brazilian company and using Near Field Communication (NFC) managing healthcare for chronic patients, to offer and Quick Response (QR) code technologies to comprehensive e-Health services to healthcare simplify interaction with their surroundings and services and large companies, as well as to the 90 get immediate help. million Vivo customers in Brazil.
That year also saw the presentation, at the The arrival of Axismed at Telefónica allows us e-Health workshop held in Cantabria, of the to extend our care model, thanks to the remote Company’s new service to track and monitor multichannel patient management platform chronically ill patients. This platform, which developed by Telefónica and to the great was one of the most significant services in reach of the company’s commercial network. the most recent Mobile World Congress in The combination of Axismed’s knowledge of Barcelona, is garnering increasing interest from managing chronic conditions together with the health professionals, who see in it the potential experience in technology and communications- to provide patients with an independent, based services of the Telefónica Group will make autonomous life in their own homes. The system it possible to develop innovative services for was developed to provide complete, ongoing healthcare operators and the corporate market.
Best practice
In 2013, the Vivo Mais Saudável online platform advice from professionals renowned in their was launched. In addition to being a place where speciality, the possibility of programming medical More info users have the opportunity to contract Vivo’s appointments online and the purchasing of on the Telefónica ‘e-Health’ mobile health services, the platform offers pharmaceutical products due to the association Help, an innovative project for treating Parkinson’s Disease patients remotely and in real-time. website. varied healthcare services, many of them free, with Netfarma. More info.
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The key role of the Innovation in Digital inclusion_ ‘Telco’ in building a Telefónica_ digital world_
Solutions for Volunteering_ emergencies_
Social action_ Support for entrepreneurship_ Telefónica Corporate Sustainability report 2013 Economic dimension
society The key role of telcos in constructing the digital world_
Telecoms are at the heart of the Digital Revolution. They make it possible for everyone and everything to be connected, generating huge opportunities for the sector. We believe that technology should be at the reach of everyone so anyone can broaden their personal and professional perspectives
In 2013 the figure The Digital Revolution is coming rapidly and in We are also on the threshold of disruptive change world already enjoy 3G coverage. And users await Telcos make the Internet and large numbers. And connectivity, which is at the in the model of production, with big data and the speeds offered by LTE . Asia is already thinking new digital services possible of 7,000 million core of this Revolution and makes it possible, cloud computing, and even 3D printers that of the fifth generation. The technology is available mobiles was is also advancing. In 2013, the figure of 2,800 delocalise production like never before. All this and network renovation is vital to keep up with million Internet users, 40% of the world's is possible thanks to broadband connectivity demand and realise the opportunities in the sector. reached. Already population, was reached. All of them access the and it creates opportunities for reinvention and there are more Internet via telecoms networks. With 760 million transformation in multiple sectors and industries. And all this is only the begining. In 2013 we reached Content Applications homes connected and 2,200 million mobile Financial services, security, healthcare, education, 7,000 million mobiles worldwide, but in 2014 there devices than broadband connections, we live in a completely advertising, public administrations and content are already more mobiles than people. If only 30% people connected world. provision are among the sectors that are increasing of these devices have broadband connectivity, the their efficiency and opening up new markets in this potential for growth is enormous. Traffic per user Social networks reach almost the equivalent of new digital world. will pass from 440 MB in 2013 to 3.8 GB in 2018, Telecoms the population of Brazil instantly, and have been and total traffic is expected to multiply by 11. decisive in certain recent and deep social and Internet traffic has shot up in the era of political movements. smartphones, with video being the service that has The Internet of things will be superseded by the most influenced its growth. One fifth of all Internet Internet of everything and according to forecasts, Innovation cycles are shorter and consumers want traffic is now generated from mobile devices. And there will be 50,000 million connections by 2020. the latest thing. New connected personal devices users and companies demand ever more. 99% of these connections are still pending. that are wearable (watches, glasses, bracelets, heart rate monitors...), a connected car, meters or To make this Revolution and the opportunity it There is no doubt: the opportunities generated Operating Devices systems smart houses, control drones and the new services represents real, networks need to be renewed and by the Digital Revolution are real and awaiting the that make a city smart... the Internet of things is transformed. More than 50% of the people in the telecoms sector that makes them possible, taking off.
The digital revolution in figures
1,770 2,800 2,200 50,000 50% 11-fold million smartphones million million million of people worldwide growth in traffic over in the world Internet surfers mobile broadband connections have 3G coverage next five years on the planet connections by 2020
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The New Internet is born
From the fixed line to ‘from anywhere’ Broadband connections (in millions)
2005 2015 Fixed 800
Total 220 18.2x 4,000
Mobile 3,200
The ICT sector, ICT at the heart of the solution The range of potential applications for a more ➜ Digitization has boosted world economic output From developed countries to emerging economies Today, the processing capacity of an average sustainable world is wide: smart cities, clean tech, by €141 billion over the past two years and Internet users around the world (millions) with its new smartphone is greater than that of the technology intelligent shopping solutions, smart metering, created 6 million jobs during that period technologies NASA had to send the first man to the Moon. home automation, energy saving, remote More information 2005 2015 Developing Technological quantum leaps of this scale do not security products, and e-Health applications. countries and its capacity occur very often. Today, we create in a few days as ➜ An increase of 10% in a country’s digitization 838 for innovation, is much data as all previous generations of Humanity Many international studies have shown how score fuels a 0.75% growth in its GDP per capita 408 have created until the invention of the Internet. Broadband and the Internet improve economic and a 1.02% drop in a State’s unemployment heading up the It is the ICT sector with new technologies and growth and productivity. More information rate. More information innovation which is fuelling the Digital Economy Total digital revolution 1,024 2.7x and driving this dramatic period of change. ➜ A 10% higher penetration for Broadband Internet ➜ In emerging economies digitization could help lift 2,793 Access increases GDP by up to 1.5% over half billion people out of poverty over the The Internet is present in our everyday life: at home, More information next decade More information 616 at work or in our entertainment. Internet networks connect today over one third of Humanity and this ➜ Investments in ICT generate more productivity ➜ The Digital Economy is creating new jobs, is is transforming all societies from an economic, growth than other capital investments making labour markets more inclusive and is Emerging countries environmental and social perspective. More information creating completely new business models 1,955 More information
At Telefonica, we aim to provide the digital products and services which will help to improve The data explosion Global traffic on IP (Exabytes/month) the lives of our customers by leveraging the Connected objects power of technology. This ranges from developing 2005 2015 new technologies for consumers to communicate PCs Mobility/BYOD Internet of Things Internet of with friends and family through to helping Everything businesses and governments address new opportunities, improve operations and increase 50,000m efficiencies. 200m 2.4 Smart Cities Connected 39.4x vehicles Among the most relevant sustainability services 83.8 by Telefónica we highlight those related to Connected education, e-health, accessibility, Smart cities Smart TV homes User and green telecommunications services. devices Drones 1995 2000 2013 2020
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SOCIEty Thus, having already launched the first devices Social and environmental with the Firefox OS open source operating innovation system, our objective in 2013 was to democratise smartphones, through increased collaboration In the digital telco sector, significant advances are Innovation at Telefónica_ with Mozilla to develop more smartphones that being produced in areas which are fundamental to are accessible both in emerging markets and to the future of our company, such as those taking Once again, the percentage for innovation regarding the Group’s revenues the general public. place in Big Data, e-Health, M2M, etc. These rose (10.8% in 2013 compared to 9.3% in 2012) developments could have a significant impact on In M2M, innovation focused on the management the improvement of society and the environment of services primarily related to Smart Cities, as well as in the privacy of consumers. As a result, energy efficiency and mobility. It was also at Telefónica we are taking these environmental prominently geared to the Internet of Things and social aspects into account from the and its adoption in the urban and industrial area, early stages of development of research and as well as being an enabler for the creation of innovation. services. Some clear examples of how social issues become Another remarkable innovation project was part of the conceptual essence of innovation at Investment in Boosting R&D catalyst for the national system for research Telefónica’s leadership in the development of Telefónica can be seen in the research on Big and development, through policies of open the European Future Internet platform, FI-WARE. Data in the analysis of the impact of the Mexican R&D at Telefónica 2013 was an important year for R&D at innovation, both with venture capital funds Cities that deploy this platform will create an government’s actions to contain the outbreak Telefónica. On the 25th anniversary of (Amerigo and Innvierte, the latter in collaboration ecosystem where open data and the Internet of of the Influenza A (H1N1) virus in 2009, and the represents 8% of the birth of Telefónica I+D, Telefónica was with CDTI) and with Telefónica’s accelerator, Things (IoT) will allow entrepreneurs to create study of impacts on mobility of individuals during our total business recognised by the European Commission as the Wayra, and OpenFuture, our programme to new services. The city of Seville has already certain natural disasters in Mexico. telecommunications operator that last year promote entrepreneurship. This role as drivers chosen this platform to promote developments investment in invested the most in R&D in Europe, while it was of innovation is also reflected in our support that improve public services and the quality of life Regarding the role of environmental issues in the ranked second worldwide in this respect. Also for and contribution to the various editions of of its citizens and at Telefónica we intend to take research and development of new products and Spain, and was noteworthy is the fact that investment in R&D in Campus Party and the organisation of different the FI-WARE platform to those regions of Latin services, noteworthy in 2013 was the selection Spain by the company represented 8% of total open hackathons and contests, among other America where we are already firmly established of Telefónica as the future supplier of smart the biggest business investment. initiatives. and committed. metering services in the UK, which will be vital for investment by managing energy systems more efficiently and As at 31 December 2013, Telefónica I+D had Also noteworthy in 2013 was our cooperation Patents reducing carbon emissions. an operator in a workforce of 689 professionals from 18 with other European operators and institutions nationalities located in Barcelona, Granada, as part of different EU-promoted programmes, At Telefónica we understand that the knowledge Milestones Europe in 2013 Huesca, Madrid, Valladolid, São Paulo and in addition to our collaboration with over 150 and inventions generated through our innovation London. In addition, in 2013 we opened a new Spanish and foreign universities and research create an intangible heritage that is reflected, ➜ Marketing of the first models of Firefox OS innovation centre in Santiago de Chile that will centres. inter alia, in patents. During 2013, Telefónica centre on Information and Communication registered 82 patents (87 in 2012), of which ➜ Marketing of ‘Radio Me’ as an example of services Technology (ICT) and the development of smart Innovation to improve 70 were registered at the Spanish Patent and based on social innovation cities. the lives of consumers Trademark Office (SPTO) and 12 at the USPTO. Of the patents filed at the SPTO, 57 were European Challenges At Telefónica we not only project our innovation- During 2013, at Telefónica we focused our applications (EP) and 13 were international oriented focus into our own activities and innovation activity on key areas for improving the applications (PCT). ➜ Management of energy efficiency through smart products, during 2013 we also promoted quality of life of consumers, such as Machine-to- meters innovation by third parties, acting as a Machine (M2M), cloud services, security, video, Big Data, applications and financial services.
R&D&i R&D R&D&i R&D Patents (€ millions) (€ millions) income income
6,142 1,071 10.8% 1.8% 87 5,770 1,046 1.7% 82 Chg. Chg. Chg. 9.3% Chg. Chg. +6.5% -2.3% 1.5 pp 0.1 pp -5.7% 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013
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Materiality matrix socieTY Specific social inclusion matrix 10 Digital inclusion_ At Telefónica, we are developing a series of programmes so that the underprivileged General sustainability matrix Social can have access to and benefit from these technologies inclusion 10 Stakeholder relevance Stakeholder
Social inclusion The European relevance Stakeholder ‘M-Inclusion’ For End Users ➜ The number of terminals and applications for low- 0 10 Commission Impact on company management 0 Impact on company management 10 The M-Inclusion project is co-financed by the cost mobiles is growing very quickly. considers that European Commission and implemented by a consortium led by Telefónica and made up of ➜ The evolution of broadband in regions ‘M-Inclusion’ is Econet, Futura Networks Colombia, Innovation of Latin America. The 3G and 4G standards will be ➜ Newly-created regulatory agencies are working most encourages social inclusion. The first year a good example Engineering, the Nokia Institute of Technology of the main drivers of growth in the area. to reduce taxes and eliminate barriers. the event was held, in 2012, 120 people from Brazil, the Cayetano Heredia University of Peru, 15 countries participated, and some of the of collaboration and the Polytechnic University of Valencia (UPV). ➜ More new inclusive services offered by mobile ➜ Improvements in regulations and applications that were presented are available for technologies. telecommunications licences will promote the download free of charge. The winner was Byron between Europe The initiative began in 2011 with the goal of implementation of infrastructures. Llerena, a 26-year-old from Ecuador, for his entry, creating a framework for cooperation among For Developers Black and White, an innovative programme for and Latin America the developers of mobile solutions in Europe ➜ The size of the market in Latin America: 600 In addition to covering these key aspects, the Android aimed at people with visual disabilities. (for Horizon and Latin America, and different end-user million potential consumers. M-Inclusion roadmap also includes the needs of organisations and entities, as well as to define a end users (from a general perspective as well as The second year, in 2013, Javier Gonzalo from 2020) roadmap for achieving social inclusion through ➜ Operators will invest in 4G standards and HTML5 from a more specific point of view, taking into Spain won with his MicroHealth app that allows mobile technology of groups that are at risk of as the new development language. account the participating stakeholders), ICT patients and parents of children with problems of exclusion, targeting the conclusions at different solutions that are suited to these needs, the haemophilia and other congenital coagulopathies stakeholders. ➜ New sources of financing: crowdfunding for technological divides and emerging trends to to monitor the progress of the treatment in real startups and developers. fully address the social inclusion objectives in time and share evidence and conclusions with The project has been aimed at providing mobile healthcare, education, the economy, and mobility healthcare professionals. solutions to people with disabilities, chronic For Public Institutions in Latin America. disease, low-income groups, and isolated ➜ Broadband implementation contributes directly Also, in 2013, M-Inclusion was awarded the prize areas. At the same time, the project promotes to economic growth. People who connect to the web platform can now for Best Project 2013 by the Spanish Association user-oriented innovations and the search for discuss, participate in the project, and access the of Information and Telecommunications Service affordable mobile solutions. ➜ Digital culture to narrow the digital divide. services that the portal offers, including open Users (Autelsi), for its commitment to social and innovation, to find financing or partners, or the environmental issues. It was also recognised at A stakeholder group has been created around ➜ The mobile industry contributes to public mobile app marketplace, which currently has the 4th Corresponsables Awards in the Large M-Inclusion. This group is made up of entities financing through taxes. more than 4,300 applications. Company category. These awards are given with a strong interest and commitment to the by the Corresponsables Foundation, which interests of M-Inclusion, and whose members For Financial Institutions As part of M-Inclusion, two challenges have recognises the most innovative and sustainable act as advisors to the M-Inclusion consortium. ➜ The introduction of broadband is directly been launched called Apps4change, which are initiatives in the area of Social Responsibility. The stakeholder group was formed to provide associated with the growth of the GDP of the aimed at recognising the mobile solution that the M-Inclusion Community with a high level country. of expertise in inclusion-related topics, from a technical and social point of view. The ➜ Price flexibility: mobile broadband charges drop stakeholder group has its own section on the and low-cost devices are available. ‘M-Inclusion’ website where its activities are promoted. ➜ Mobile technologies have significant potential to One of the project milestones was the definition change the lives of millions of people. Innovation of services New sources of Broadband of a roadmap that identified the keys to making in mobile technology financing for development inclusion a reality through mobile solutions for For Industrial Partners the agents involved in this transformation: users ➜ Low-cost devices will encourage the growth in that are more startups and promotes economic and their organisations, mobile developers, public and demand for traffic by the population. inclusive for users developers growth institutions, financing entities, and industrial partners.
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Today, the Conexão amazônica the development of public service infrastructure, ‘Intégrame’, is a project of Telefónica Peru to bring with the goal of narrowing the digital divide Brazilian Amazon Information and communication technologies and fostering social inclusion through public- telecommunications to poor, isolated rural areas is connected to transform people’s lives significantly, and one of private alliances to promote the development of example of this is that the Brazilian Amazon today telecommunications in rural areas. the world thanks is connected to the world thanks to broadband internet and third-generation (3G) technology Using wireless technology, the programme to broadband offered by Telefónica. offers mobile telephony, fixed telephony, In phase two of the project, participants received alarm signs, and recommendations for potential public telephones, Internet access, and satellite an augmented reality application that uses problems during pregnancy. The messages are and 3G from Since 2009, the municipality of Beltarra, with digital television services, taking advantage of Qualcomm’s Vuforia platform to provide access to related to the health and gestational age profile Telefónica a population of almost 16,000, has enjoyed the efficiency generated by the use of a single data, images, and videos on the Pesca don Redes of the patient. The project also includes the these telecommunications services thanks to network for all of the services. 3G project, information on the community, and implementation of an interactive voice response an alliance between Vivo (owned by Telefónica), restaurants that are participating in the project, (IVR) system that consists of a telephone Ericsson, and the collaboration of the Brazilian In 2013, the programme reached more than 229 tourist information, and a game for increasing exchange with pre-recorded voice messages with non-governmental agency Saúde e Alegria, rural towns, which benefited inhabitants of areas social-environmental awareness. information that is of interest to the users. which developed a digital inclusion project that like Piura, La Libertad, Ancash, Moquegua, Tacna, has helped to narrow the geographical divide of Cajamarca, Ucayali, Pasco, Junín, Cuso, Puno, and Instructions have also been created for the WawaRed currently gives access to the remote communities in the state of Pará, in the Huancavelica. farming of oysters as a sustainable alternative to healthcare system to approximately 5,000 northern part of the country. traditional fishing in the off-season. The addition pregnant women, providing better healthcare This project has become a benchmark for of oyster farming to the fishing trade in Santa conditions for both mothers and children alike. The arrival of telecommunications services has sustainable development programmes and has Cruz Cabrália has increased employment and 16,000 resulted in significant developments for the been recognised at the International Business income per family in the region. Based on the initial results, work is underway people in the region, including better access to healthcare, Awards (Stevies), which award the best strategies to expand the programme through WawaRed Amazon have education, and economic growth. According to a and actions in the area of businesses worldwide. The most recent activities developed as part of Plus, which goes beyond the pregnancy phase study by the Faculdades Integradas do Tapajós, The initiative was also chosen as one of the this project include the new Centre for Education and provides support to mothers for at least telecommunications close to 90% of the people felt that mobile best examples of Social Responsibility in South and Innovation Fishing with 3G Nets (CEIT PR3G), the baby’s first year of life, with reminders of services phones changed their day-to-day lives for the America, and one of the best telecommunications installed in a building donated by the city, which appointments, vaccinations, recommendations better, and 53% thought that they had actively products worldwide. offers training courses to locals. Participants use for care, feeding, development, etc. contributed to the creation of companies and the tablets and smartphones to connect through generation of jobs. the 3G network of Telefónica Vivo to an online ‘Pescando con redes 3G’ platform with development tools that allow them Other Important Projects During the execution of the project, it was Pescando con redes 3G (Fishing with 3G nets) is to create localised digital content and unique In Mexico, we have started a rural telephony discovered that the Tapajós River was acting as a a project that was started in 2010 to promote mobile applications. The project will affect project that started in February 2013 with the mirror, increasing the range of the 3G signal. This economic and social development in the city more than 4,000 people in Santa Cruz Cabrália presence at the International Franchise Fair 2013 9,000 has made it possible for the hospital ship Abaré, of Santa Cruz Cabrália, in the south of Bahía, in and another 5,000 people in other nearby in Mexico, and during the early months of the fishermen will have which sails along the length of the river and Brazil, through the digital and social inclusion of communities. year, the programme was promoted in different provides healthcare services to the inhabitants fishermen and oyster farmers. forums like the FIF in Guadalajara and Expo quality training in the of more than 70 communities, to connect to the The awards received by this project include third PyMes 2013. Over the course of the year, this Bahía region (Brazil) broadband network. Today, doctors on board the During phase one of the project, the fishermen place in the Social Technologies award of the project has benefited 6 municipalities in the 2 Abaré can communicate with their colleagues in Cabrália received mobile devices with credit Bank of Brazil Foundation, and the Viva Mobile OI states in which it has been implemented, with a around the world and send X-rays and other and used 3G networks to access information display award. total of 22,000 people. diagnostic images. This means that thousands of on fishing conditions and market prices in real people who live in the Amazon can benefit from time. Software applications were also designed Last year we also carried out important projects quality medical care. to support the fishermen in their activities ‘WawaRed’ for financial inclusion in Brazil, such as the by analysing and providing information on WawaRed. Connecting to improve maternity- Zuum service via MFS, a joint venture between The Abaré is also using its mobile broadband navigation, weather, market research, direct infant health in Peru is a project in collaboration Telefónica Vivo and MasterCard, which is based 5,000 connection to offer educational programmes to sales, and technical support. with the Inter-American Development Bank on a pre-paid cellular current account, designed Pregnant women in the communities along the Tapajós River with the (IDB), which consists of the implementation of specifically for a large part of the Brazilian Peru will have access support of local universities. Other initiatives consisted of training the an electronic clinical record for prenatal care of population that does not have the payment fishermen to use these new technologies, which underprivileged pregnant women in Peru. functions of a bank account. It has been to the healthcare This project won the Global Mobile award in 2013 included the creation of training centres in Santa calculated that 36% of the population of Brazil system thanks to for the Best Mobile Product, Initiative or Service Cruz Cabrália, as well as a ship to reach the more The project seeks to use information and does not have a bank account, 4 out of 5 people WawaRed for Emerging Markets. distant communities. As a result, the fishermen’s communication technologies (ICT) to provide a use cash as their principal method of payment, income increased and they improved the solution to the problems of maternal mortality in and just 13% of the population uses credit cards efficiency of their sales. Peru, promoting an improvement in maternity- as the principal means of payment. But while ‘Intégrame’ infant health and helping to achieve Millennium Zuum promotes social inclusion, at the same time Intégrame (Integrate Me) is a project of Telefónica In total, approximately 60 fishermen in seven Development Goals 4, 5, and 6. it is also exploring a business opportunity. At Perú that brings telecommunications services communities benefited directly from the project, the end of 2013, 223,000 people were using the to distant rural areas in the country with high and more than 750 members of the community The initiative uses text messages to send service. poverty levels. This initiative, which began in and local businesses benefited indirectly. personalised information on nutrition, vitamins, 2006, was started as an alternative model for
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SOCIETY Response to emergency situations_ Good management of the technology behind Telefónica’s products and services is a key element in the improvement of the effectiveness of safety and alert teams in both environmental and social emergency situations
Telefónica works Natural disasters ➜ Spain. Minutes after the railway tragedy for Excellence; in 2010, for Best Technological Telefónica also collaborates with the Emergency The Telefónica Group develops and improves in Santiago de Compostela, our Operations Integration of Emergency Services, and in 2012, Number Association (EENA) on the European to achieve business continuity plans in all of the countries teams mobilised and a crisis team was formed. for Best Emergency Centre. In 2014, we have been Common Emergency Number Day, which is in which it operates. These plans ensure a series Twenty-four landlines were installed in record nominated in the category of Best Emergency aimed at increasing awareness that it is possible excellence in of communications services that operate as time and made available to family members; all Centre. to contact the police, ambulances, and fire emergency normally as possible in case of any contingency. of the city’s base stations were reprogrammed department from any country in Europe by These plans respect international standards in emergency mode to give priority to voice; The mobile telephone application Libres, simply dialling from any phone or phone booth. coordination and and are prepared taking into account the open WiFi lines were installed; emergency developed by Telefónica Spain, and compatible characteristics and risks of each region. Their service numbers such as 061, 112, and the with any smartphone, for the prevention In Central America, Telefónica Costa Rica management, implementation normally involves the creation of SERGAS telephone numbers were monitored of gender-based violence, was downloaded collaborated on the Hackathon against Domestic communication platforms to provide support for and reinforced. Families were also provided with 4,000 times in the first month following its Violence, organised by the World Bank with the providing the operations and speed up recovery if systems chargers for their mobile phones so that they presentation. The system offers a variety of support of SecondMuse, which was held in our communications crash in catastrophic situations. Also, since it is would not lose their communications at any time. information on the resources that are available corporate offices with the participation of 40 present in different countries, local operators can The necessary technical resources were also to any woman who suffers abuse, to start the people. Technology experts and programmers, infrastructure support each other whenever necessary. deployed to allow the communications media to process of escaping from their delicate situation. together with other experts, worked in groups carry out their reporting tasks with no problems. Structured into eight fields, the Libres application over the course of two days to produce and know-how ➜ Mexico. In September 2013, Hurricanes Ingrid offers a test with simple questions to identify prototypes of technological solutions and and Manuel left the country with a significant Social alerts situation of abuse, includes a link to a series of different proposals to combat early violence number of contingencies, deaths, and damaged basic steps to begin to leave behind the effects of in couples, improve institutional monitoring of infrastructure that affected 371 municipalities Telefónica works to achieve excellence in gender-based violence, and provides contact with women at risk, identify alternatives to physical in the area. In this humanitarian emergency, emergency coordination and management, 016 or 112 in case of emergency. punishment, and detect intra-family violence in Telefónica strengthened the service of its providing its communications infrastructure and the university student population. network with additional batteries and allowed know-how as an emergency-services integrator, The application also provides information on free calls in the customer service centres, among which means that it can offer an integrated self-protection measures and includes a list other services, to facilitate the communications system that is adapted to the specific needs of of testimonials from women who managed to of those affected by the hurricanes. These the centre, integrating with its own systems, get out of situations of gender-based violence services reached the entire target population processes, and procedures. and who are now living new lives. The content and more than 500 calls were received by the of Libres is also complemented by educational telephone attention lines. The emergency centres implemented by material on violence against women, in order to Telefónica have won several EENA (European increase awareness. Emergency Number Association) awards. In 2009,
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SOCIETY Volunteers_ If you have the will to change the world, all you need is a chance to do it. Here we all help to build those opportunities
In 2013, a Fundación Telefónica, in collaboration with the Mentoring as part of the Think Big Human Resources, Sustainability, and Social programme total of 26,614 Responsibility areas, gives life to the idea of creating opportunities to change the world In 2013, 1,102 employees volunteered over the employees of the through Telefónica’s Corporate Volunteer course of the year to serve as mentors to young Group dedicated programme. An opportunity that our employees people in Telefónica’s Think Big programme. This can take advantage of to make charitable project is aimed at young people between 15 and 195,906 hours initiatives in 24 countries a reality. Telefónica’s 25 years of age and is intended to train them in Volunteers channel and promote the social social and project-management skills. to charitable action of the Group’s employees who want to contribute part of their resources, knowledge, These mentors were selected from among projects time, and energy to benefit the community and Telefónica’s professionals, with the following its underprivileged groups. required profile:
In 2013, there were 26,614 active Telefónica ➜ Ability to motivate volunteers, who gave a total of 195,906 hours. ➜ Perseverance Some of our most successful projects in 2013 included: ➜ Solidarity
‘Vacaciones solidarias’ ➜ Humility
Vacaciones Solidarias (Vacations for Charity) ➜ High degree of integrity and confidentiality is a volunteer programme with international cooperation in which Telefónica volunteers ➜ Capacity to approach mentorship conversations participate for two weeks in different projects without pre-judging that are being carried out in different Latin American countries. ➜ Emotional maturity and patience
These projects were prepared in collaboration ➜ Flexibility and creativity with organisations in Fundación Telefónica’s Proniño programme, which aims to help eradicate ➜ Respect for the capabilities of others child labour in Latin America. ➜ Courage to question victim-centred attitudes
More info At the ‘Yo Digo Aquí Estoy’ website
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SOCIEty Social action Social action at Telefónica_ In 2013, Telefónica dedicated 128.88 million euros to social action, 18.5% less than the year before, representing 0.23% of the Group’s revenues. Financial contributions amounted to 98% of this figure. Telefónica has maintained the percentage dedicated to social action almost unchanged: 0.23% of Group revenue, 98% of which was in Environment financial contributions 0.2% Others Socioeconomic Social wellbeing 0.5% development 8.3% 7.8% The qualification criteria for the Art & culture projects apply London Benchmarking In 2013, Telefónica allocated 128,885,493 euros the Community’) have been set up and converted Group methodology and the process 10 million euros 13.5% to social action, according to the externally into activities replicable in other educational is verified externally by LBG. The was spent on verified LBG standard methodology. This sum centres with success. aim is to measure the impact of the represents a fall of -18.5% over the previous actions, help community relations and actions and year although its percentage of the Group’s ➜ Sponsorship of ‘Mobile World Capital facilitate compliance initiatives aimed consolidated revenue is practically unchanged: Barcelona’ 0.23%, two points lower than the previous year. at improving Nearly all (98%) of this figure was in financial The objective is to generate the best conditions contributions. for companies and agents from different sectors 128.9 people’s socio- to carry out digital transformation, and for all this The LBG Model is an innovative methodology to yield an impact on the community. million economic that allows the contributions, achievements 150 M€ conditions and impact of a company’s social action The Mobile World Capital Barcelona Foundation, euros to be measured, managed, assessed and set up on 13 March 2012 and responsible for communicated in a way directly comparable with managing the capital status project, is governed 100 M€ other actors. by a board made up of the Ministry for Industry, Energy and Tourism, the Cataluña regional 50 M€ government, Barcelona City Council, Fira de Education & Socio-economic development Barcelona (the city exhibition centre) and GSMA, Youth a body that represents the interests of more 69.7% Actions and initiatives aimed at improving than 800 mobile operators and over 200 mobile 2007 2008 2009 2010 2011 2012 2013 people’s socio-economic conditions: ecosystem companies all over the world. around 10 million euros compared to 12.2 million in 2012. Art and Culture Most noteworthy projects Actions and initiatives aimed at the promotion http://www.yodigoaquiestoy.com/empresasyodigo/ ➜ Educational innovation programmes of of and access to art and culture for the whole Fundación Telefónica of society: 17.3 million euros compared to 22.9 million in 2012. Beneficiaries: 7,986 teachers in Fundación Most noteworthy projects Among the most important projects in 2013 in Telefónica Classrooms, 14,537 teachers trained in Beneficiaries: nearly 1 million attendees at Latin America were the exhibition World Press educational innovation, more than 50,000 people exhibitions and events. ➜ Art and Technology - Fundación Telefónica Photo 2013, in Chile; the event Art and optics: trained in digital culture. The speed of communications, in Lima, and the The Digital Art and Culture division of The Fundación Telefónica Space in Madrid Technology Fair in Buenos Aires. ‘Innovation in 21st-Century Skills’ is the Fundación Telefónica creates, disseminates has followed a theme of exhibitions based educational innovation space where the most and shares cultural and technological on the work of internationally renowned ➜ Digitalization of the National Library of Spain relevant experiences of new educational models knowledge related to the content, languages, photographers, such as the images of cinema for the century are demonstrated. It covers formats and channels of the digital society. and pop stars by the Briton Terry O´Neill, Telefónica is undertaking the project to digitalize learning methodologies that foment the skills graphical reflection on women and Islam by the heritage of the National Library of Spain: of the 21st century, with special emphasis on Artistic and cultural activity mainly takes Shirin Neshat and the traditional naturalism of books, manuscripts, maps, photographs, digital skills. It allows activities in the innovative place around the Fundación Telefónica Spaces the Galician Virxilio Vieitez. In addition, digital etchings... and to publish them on the Internet classrooms and teachers’ work to be monitored in Buenos Aires, Lima, Madrid and Santiago. art was also a protagonist, with the installation in the Hispanic Digital Library of the National transparently, by assessing and quantifying the These are culturally lively centres, spaces open data.path by the Japanese Ryoji Ikeda, an Library. The aim of the project is to publish these results obtained, in collaboration with academic to everybody in which there are exhibitions, exclusive electronic tunnel created from the holdings on the Internet and to raise the content agents external to the project. The laboratories El debates, concerts, workshops and sound and images and sounds of Big Data. in Spanish of the same, by adding over 25 million Más información Tiempo and Mi móvil al servicio de la comunidad light installations. pages from different kinds of works that can be En la web de (‘The Weather’ and ‘My mobile at the Service of freely consulted by anybody who so wishes. Fundación Telefónica
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Investment in actions and initiatives designed for the integration of the young in general, and to education in particular, reached 89.8 million euros
Education and youth ➜ VII International Education Encounter Social wellfare ➜ Atam To improve 2012-2013 Actions and initiatives aimed at the integration of Actions and initiatives whose object is to improve Beneficiaries: nearly 16,000 people in Spain. conditions and youth in general, and to education in particular: This macroevent was set in motion in April 2012 the conditions and quality of life for at-risk groups 88.8 million euros compared to 101.9 million in to answer the question What should education be in the community: ATAM, the social arm of Telefónica, with expertise quality of life for 2012. like in the 21st century? It lasted 18 months and 10.7 million euros compared to 11.3 million in in people, disability and dependency, is a at-risk groups in covered 9 countries, attracting 50,000 teachers 2012. registered non-profit organisation declared of Most noteworthy projects in its online facet and over 9,000 attendees at its Public Utility by the Cabinet in 1977. the community, 70 physical events, gathering contributions from Most noteworthy projects ➜ ‘Proniño’ programme 300 speakers of international level along the way. This current year, 2013, we have been celebrating 10.7 million euros ➜ Ability Awards its 40th anniversary. The weight of so many Beneficiaries: 471,848 girls, boys and Educational experts of the calibre of Roger Schank, years has given the Association an accumulated was allocated adolescents helped in ten years, and 1,932 Alberto Cañas, David Albury, Stephen Downes and The Club Ability is a common interest network wealth of experience in addressing its social aim: members of NGO staff trained. Juan Domingo Farnós made contributions to this that tries to share and improve the best practices prevention of disability and provision of support collective reflection in the 2013 phase, with their identified through the Telefónica Ability Awards to allow the social integration of people with The latest report from the International Labour unorthodox and at times disruptive visions. in a consistent way, in the different categoríes: disabilities. Organisation (ILO), published in 2013, estimates Senior Management Commitment and Employee that 168 million children in the world are involved The final product of the VII Encounter was the Leadership ; Recruitment and Selection; Today, 34 Telefónica companies belong, and in child labour, amounting to around 11% of all digital publication 20 keys to education for 2020, Accessibility; Customer Orientation; Professional there are over 52,000 members among current, children. From within this figure, nearly 18 million which by the end of 2013 had been downloaded Development and Training, and Prevention and retired and pre-retired staff and former workers children are from Latin America and the Caribbean, from the Fundación Telefónica website 13,687 Retention. of these companies. Telefónica and the members of which more than 9.5 million carry out work times. contributed over 14 million euros in the year considered as hazardous. The 48 Ability Companies and Organisations who 2013, representing 82% of the total income of ➜ Fundación Telefónica App Awards were finalists in the Awards have shown that the Association. At Fundación Telefónica we contribute via The Fundación Telefónica App Awards is a Spanish companies are undertaking pioneering the Proniño (for children) programme for the competition to publicise the creativity of young initiatives these days that deserve to be shared eradication of child labour in Latin America, programmers of applications for the mobile and better known. The Club has therefore Others supporting quality schooling using the help of operating system Firefox OS. The winners have become a collaborative space to exchange best technology. We protect children and prepare received work placements at various Telefónica practices, helping these organisations to face new Actions and initiatives whose object is future citizens for the digital society. Group companies, as well as places at level 2 of the challenges and continue improving. improvements in various fields not covered by the Think Big scheme, because one of the aims of this preceding categories: initiative is to boost young people’s professional Club Ability is a source of knowledge and advice opportunities. This action fits within the general which helps other companies and organisations to 0,65 million euros vs 8,6 million in 2012. objective of encouraging the study of STEM integrate disability into their business processes. (Science, Technology, Engineering, Mathematics) subjects among the young as a way to increase their employability.
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Society Support for entrepreneurship: Open future_ With this platform, Telefónica offers Telefónica has a strong belief that technological Telefónica supports young and new entrepreneurs through Open Future platform projects including entrepreneurs comprehensive and ongoing innovation and the promotion of talent is the best Wayra, Talentum, Think Big, Campus Party and others support for projects, with a single model, ranging tool to boost economic growth and employment from the earliest stages where the project is in all markets. Open Future is the platform that just an idea, to the most advanced stages of the will capitalize on every opportunity offered by commercial launch of the start -up. In addition, the innovation ecosystem that Telefónica has we can reach more people and make our efforts created. This growth will benefit all and everyone Open Future is the initiative that encompasses To facilitate market access for the new young more global, with more impact and talent will be able to Be more_. all Telefónica projects aimed to support young entrepreneurs, Telefónica has launched inclusion, thanks to Telefónica’s partnerships. entrepreneurs to promote their projects at numerous initiatives in recent years, such as all stages of growth. Open Future aims to use Think Big, Talentum, Campus Party, Wayra, the experience, engagement with financial Telefónica Ventures and Amérigo. communities and the market size of Telefonica Campus to guide the development of viable projects to Talentum Wayra Think Big Party Crowdworking innovation, using a model that gives visibility to the talents and connects with investors.
Schools Startups Universities
With help from from 5 to 25 years old up to 30 available in 8 4,000 candidates Spain more than 1,300 3,338 projects Brazil Chile its partners, cities in Spain entrepreneurs developed 2 8% selected 217 in the Wayra more than 1,500 m in Telefónica Telefónica aspires 6 technological scholarships in community 260 events 7,600 Open Future building trains 300 Talentum 2013 innovators in the city center of to create a global Startups 315 startups 54,577 Santiago de Chile hub to promote 11 Movistar 557 new hires accelerated participants $5,000 for stores 20 collaborating in 2013* each project 100 people daily talent and accelerators 22,080 projects more than 1,000 selected target to 2015: 100 received since volunteers 300 annual projects 20 universities innovation impact 5,000 scholarships 2011 collaborating as children and planned for mentors Colombia 4 events a week 3 firms teenagers 2014 14 academies in more 6.9 million euros Ecuador 3 foundations 12 countries than 300 300 new hires invested innovators 430m 2 in Quito 3 municipalities planned for 2014 40 users UK 10-12 projects more than 10,000 Spain innovators (opening soon)
8 stages and 970m 2 in Isla Cartuja in close to 250 Seville speakers 450m 2 in the Culture City of Santiago de Compostela
* From the 569 scholarships awarded in 2012.
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SOCIETY Support for entrepreneurship: Wayra_
Wayra is the accelerator programme for the launch of ideas promoted by Telefónica, created to find and nurture the best talent in technology. ‘Wayra’ invests, on average, in one new project every three days, and creates almost three new jobs every day
Wayra wants Wayra is the instrument that we put in the by over one hundred investors, business angels hands of emerging innovation and start-ups, so and renowned entrepreneurs from Europe, new companies that they benefit from the global expansion and Latin America and the United States. There, 16 market leadership of our company. Entrepreneurs start-ups representing nine countries had the which operate in see in this union immense potential to distribute opportunity to present their products and related their ideas in the markets in which Telefónica is investment opportunities to the international strategic areas present with over 320 million customers, as well investment community. for Telefónica as having access to its vast network of partners and businesses around the world. For Telefónica, Nevertheless, the work of an accelerator does to manage to Wayra is the perfect place to identify talent and not culminate in the graduation of its companies, help it to become competitive in the shortest but rather continues with the ongoing search consolidate time possible. Many of the projects that Wayra for more and better talent. From 2013, Wayra accelerates are aimed at key strategic areas has been recruiting start-ups and entrepreneurs themselves for business, from OTT applications to cloud through a new scheme for proposals that no in the shortest computing to financial services. longer distinguishes between countries. Wayra will make three calls for proposals every year possible time About to serve three years of operational life, which will offer, openly and simultaneously, More than 22,080 ideas and projects have been million, while third parties (public funds, private Funds committed Wayra has 14 fully operational academies for places at the various academies to any received, making it one of the largest acceleration and angel investors) have provided funding of entrepreneurs in 12 countries. Thus, its presence entrepreneur in the world who wishes to apply and trend detection programmes in the world. approximately €32 million. by Telefónica for in Germany, Argentina, Brazil, Colombia, Chile, with a project. This new model has arisen from This represents the presentation of one project Spain (Madrid and Barcelona), Ireland, Mexico, the need to keep up with the pace at which new per hour since the launch of Wayra in 2011. Eight out of 10 start-ups have launched their Wayra projects Peru, United Kingdom, Czech Republic and technologies are emerging – now that they are products or are in the beta phase. Six out of 10 Venezuela, means that Wayra is an accelerator decentralised and can occur anywhere in the Wayra has a portfolio of more than 315 are already selling their services to clients and come to €12.6 with a truly global spirit. world – and provide tools so that the academies companies grouped into 20 digital industries. The users (2014). million can accelerate these projects with greater agility funds committed by Telefónica in early-stage The academies are spaces for meeting and and flexibility. companies accelerated by Wayra come to €12.6 work, and architecturally designed in line with the latest trends in co-working. They offer Wayra in figures access to the best technology and mentoring, interaction with other projects and facilities for More than 315 accelerated start-ups out of a total The Wayra programme in figures* connectivity to the other countries where Wayra of more than 22,080 projects received since 2011. is present. So far, Wayra has already accelerated The admission rate at Wayra is lower than that of €13.6M investment by Wayra in start-ups (not €36M Investment by third parties (funds, business angels and including accelerator services) others) in start-ups accelerated by Wayra more than 300 companies over its operational Harvard (approximately 1.8%). lifetime, with an average of one every three days. 39% of start-ups later obtain external financing €357K average investment round for graduate start-ups These companies are themselves catalysts for The 14 academies are present in seven countries during their acceleration cycle in Wayra employment and business, as they quickly seek in Latin America (Brazil, Argentina, Colombia, new professions and technical resources, such Mexico, Peru, Chile and Venezuela) and in five 2014 admission rate: 3% +2,500 people in its global expert network (entrepreneurs, partners, as developers and specialists in design and user countries in Europe (Spain, UK, Germany, advisors, mentors) Key figures 2013 experience. Ireland and the Czech Republic), covering a total +145,000 followers of Wayra and its academies +380,000 video views of start-ups in YouTube (equivalent to more population of 108 million. in Twitter than 312 days) Number of academies 14 During 2013, Wayra called together hundreds of Number of firms venture capitalists in more than 10 cities at this With a total area of over 10,000 square metres Global partners accelerated 300 kind of event, demonstrating the potential of the devoted to accelerating projects and innovation, Funds committed companies in its portfolio. In November, it held its the academies together represent a space that second international demoDay simultaneously exceeds the area of two FIFA standard football (€ million) 12.6 in London and Sāo Paulo, which was attended fields. * Data as of mid-2014.
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socieTY What? Where? How? Support for entrepreneurship: Short Track Accelerators Universities Mentors Develop your Chema Talentum_ own project Alonso 3 months Francisco Full Time Serradilla Through its ‘Talentum’ programme, Telefónica creates work and digital Technology career apprenticeship opportunities for thousands of young people and university students Fernando 20% Rodríguez graduates (18-28 y.o.) Alfonso Muñoz
Technical mentors Short ‘Long Track’ Track Engineers Programmers Work experience Enrique Mendoza in a start-up (Zaragoza)
6 months Miguel Gesteiro (Galicia) Part-time Antonio Diaz (Madrid)
80% Rodolf Borbón (Madrid)
Talentum Startups is a programme for the best, entrepreneurial ecosystem. Talentum Startups for university students who pass a rigorous targets university students of technology selection process conducted by top professionals. selected throughout Spain, who are offered a work Programme participants come from all regions, experience in high-technology innovation. It is and so far have had the opportunity to participate twofold: in over 20 different locations across the country. It is an open innovation programme with the ➜ Talentum Startups Short Track, designed for collaboration of more than 50 public and private techies (developers, programmers, etc.) with an institutions and corporations: accelerators, entrepreneurial spirit. We support the development Talentum Schools is a Telefónica initiative with the promoting talent and providing participants with universities, foundations, corporations, of their own projects to develop the first prototype: ‘Talentum aim of promoting the development of technology motivational tools to develop their creativity and municipalities, etc. mentoring, endowment, hardware, training, etc. Startups’ wants creators in children and adolescents, aged 14 innovation. to 18 years, developing their creativity and Talentum Startups is a Telefónica`s programme ➜ Talentum Startups Long track. The Talentum to become innovativeness. A year after the launch of Talentum Startups, it for open innovation. In 2013, Ericsson was the Startups develop technology start-ups in a has become a programme of open innovation first large corporation who joined the programme. technology accelerator. known as a The initiative, which follows the approach of whose pillars are young talent, technology and For this year 2014, we will have new upcoming “learning by doing”, is carried out in open and entrepreneurship. additions that will allow us to scale the programme driver of talent free workshops in Movistar stores, which are and increase the number of young people and reflect the complemented by a follow-up on the online The Talentum Startups program invests in young participating. platform Talentum Schools. The activities offered people, enhance innovation and entrepreneurship presence of cover various areas such as programming, robotics, as engines of growth. University students Talentum Startups is a programme to augmented reality or developing mobile apps. participating in the programme have the support college careers in technology and the women in ICT opportunity to develop professionally in high- careers The programme is currently being developed in technology innovation and face their professional eight Spanish cities (Madrid, Barcelona, Valencia, future from a very different perspective. At the Seville, Bilbao, Zaragoza, Palma de Mallorca and same time, the Talentum Startups programme is Granada) and during 2014 we will continue the a major boost for the entrepreneurial ecosystem, expansion of the programme to new stores and because those start-ups are strongly reinforced in cities across the country. their technological part with what is currently most Schools Startups Universities valued: technology resources. With this initiative, Schools Talentum aims to 5-25 years Up to 30 years generate technology creators while discovering and
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they make up a rich ecosystem of social hackers: ordinary people who share an awareness of and interest in collaborating in the quest for solutions to problems with high social impact.
The aim of this Telefónica initiative is to show that technology is at the heart of solving the great problems of the planet and that the creation of a sustainable, replicable ecosystem of social innovation is one of the keys.
At the London Campus Party, the datathon socieTY Data for Social Good was also held. On this occasion, participants had access to aggregated, anonymised data on flows of people in the Best practice Support for entrepreneurship: London area, together with other data from the UK Open Data Institute. Participants could use Social hacker? this information to invent and create applications Join the ‘HackForGood’ craze Campus Party_ for the good of society. For instance, the risk to people who visit a certain area arising from the Have you heard of social hackers? These are people closure of fire stations was studied. aware of society’s problems and challenges, who use Campus Party is the meeting of talent and ICT challenges, which is sponsored by Telefónica their abilities and those in the ecosystem around them to since 1999 to develop digital ideas to help improve people build a better life As a precursor to all this, the hackathon H4G search for innovative solutions. had already begun in March. This centres on social innovation, and new ideas, services and HackForGood is a marathon meeting of social hackers applications will be developed to help to solve that tolke place in 2013.HackForGood is a social social problems, satisfy existing needs, create innovation hackathon. Its main aim is to develop new communities, developing collaborations applications and solutions in response to challenges Telefónica In 2013 we sponsored meetings in São Paul place. The aim of H4SB is to help to build a better among public and private institutions and the posed in four areas, using ICT: (Brazil), Boyacá (Colombia) and London (UK) so and more sustainable world through technology. third sector, etc.: everything that contributes to believes that as to bring disruptive talent together and closer Its inspiration comes from the Sustainable creating a better world. ➜ Youth unemployment to Telefónica. Development Objectives (2015-2030) promoted ➜ Active ageing technology is by the United Nations, which continue the work Campus Party was the ideal scenario to share ➜ Disability At the Campus Party in São Paulo, the started by the Millennium Objectives (2000-2015). initiatives like FI-WARE and hold a competition to ➜ New forms of social innovation the solution to competition Transforming Technologies develop FI-WARE app hackathons, where major the great global Challenge was a high point, as a way to support At HackForGood two types of social hacker are prizes were given to the winners. The campuseros These are areas that pose veritable challenges for business ideas related to healthcare, education, defined: the Social Challengers and the Social were also given a presentation on Wayra, the our society in order to improve leisura, education, problems and volunteering, income generation, natural Makers. Social Challengers are those who Telefónica startup accelerator, and some of these accesibility, personal autonomy an health of the elderly. disasters and NGOs. From among all the projects, are familiar with and sensitive to such social incipient businesses had a chance to show off they require 10 were selected, which received a grant of up to problems as youth unemployment, disability, their successes and experiences. HackForGood also wants to throw open a final theme the creation of 5,000 dollars to bring their idea to fruition. active aging and new forms of social participation. that looks at challenges related to other social groups or They act by means of ‘challenges’. A ‘challenge’ Challenges that allows experimenting with technology in some way a sustainable, Telefônica Vivo also worked on the Smart Cities is a call to action to the Social Makers for them to different. theme at its hackathons (hacker marathons) build solutions. To develop, in the HackForGood environment, replicable throughout 2013, in three editions: Vivo new ideas, services and applications that To participate, visit the HackForGood blog or join the Hackathon Intelligent Cities (at Campus Party The Social Hackers who have been working with help to solve social problems, satisfy existing conversation on Twitter with the hashtags #h4g and ecosystem of Brazil 2013), Firefox OS Pernambuco for All Telefónica are multidisciplinary. In fact, one of needs, create new communities, developing #HackForGood. Go on, we’re waiting for you! social innovation (Campus Party Recife 2013) and Hackathon USP the aims of HackForGood is to prompt a real collaborations among public and private Cities. Nine of the projects presented won prizes. synergy of ideas and disciplines. Some of those institutions and the third sector, along each of the already registered with us are real techies. Others theme lines: As part of the activities of the Campus Party in are social scientists, engineers, psychologists, London, Hacking For Something Better (H4SB) took designers, doctors, journalists, etc. Together ➜ Youth unemployment ➜ Disability ➜ Active ageing ➜ New ways to participate in social innovation The largest 5,000 $ Internet event in the to move each winning world project forward
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society Support for entrepreneurship: Think Big_ The Think Big programme is the route we at Telefónica have chosen to help prepare young Europeans for the personal and professional challenges they will face in the future, by developing their business and digital skills
In 2013, this In Spain the first call was launched in 2012 and Think Big in Spain, and it has now passed through the second was launched a year later, expanding both levels of financing (400 and 3,000 euros). scheme, in which the number of selected candidates 120 to 300. Its leader, Sara, confesses to being passionate In general, the number of projects supported has about accessibility and hopes that the service will six countries grown during 2013 in all participating countries grow and help this group to enjoy the pleasure of (on top of Spain, the United Kingdom, Germany, travelling without restrictions. participate, Ireland, Czech Republic and Slovakia). In addition, recorded its the Think Big Schools initiative, focused on The platform is based on a social web and an younger students, has expanded from the UK to accessible mobile application that contain highest number other countries, organizing numerous sessions informative videos about different places of that have increase the visibility and impact of interest, in sign language. Its aim is to break of successfully Think Big. down the existing barriers to communication, making access to tourism, leisure and culture completed During 2013, the Telefónica Foundation invested easier for all. Cities, museums and hotels can projects 6.9 million euros in the programme and backed use the system to provide specially adapted the development 3,338 projects. Much of this information to people with auditory disabilities, budget was allocated to training young people, so improving their customer service. this being one of the fundamental pillars of Think Big. Each participating team received Milestones instruction in a series of core competencies for its development, with over 260 events organised in ➜ 2013 has been a year of growth for the six countries named above. Think Big. During the year, the brand was reinforced and the impact the scheme has on Furthermore, the Programme has the strong young Europeans was consolidated backing of Telefónica employees, with over 1,000 volunteers collaborating in some way (mentoring, Challenges donations, training, etc.). All of them contribute ➜ 2013 to the impact achieved on society, made real in To create an integrated operation the 54,578 youngs participants in the program and in line with the Digital Telco strategy Investment diring the year. and the other entrepreneurship (million euros) 6.9 schemes of Telefónica Projects developed 3,338 Prometteo Events 260 Prometteo, which is a web platform for ➜ Financing of 2,000 projects in Spain, Germany travellers with auditory disabilities, is one of the and the UK. Participants 54,577 outstanding projects of the most recent edition of
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Electromagnetic Green ICT services_ fields_
Smart Sustainable Global environmental Cities_ leadership_
7. Planet_ Telefónica Corporate Sustainability report 2013 Environmental dimension
PLA NET Materiality matrix
Specific environmental materiality matrix Green ICT 10 Smart cities
& environment_ e-waste Smart CO2 emissions buildings EMC in Energy General sustainability matrix Smart devices metering Buyback & Green ICT can generate value for our Company in terms of reducing costs and recycling 10 Renewable generating new income energy EMC in networks Network Visual Electronic billing sharing Green ICT impact services Stakeholder relevance Stakeholder
Energy & CO2 Biodiversity Electromagnetic Non fields Paper e-waste Water Gases affecting Stakeholder relevance Stakeholder Environmental the ozone management Noise layer
0 10 Impact on Company management 0 Impact on Company management 10
Our strategy on Green ICT and Environment Environmental materiality We carry out is designed to promote the sustainability of We carry out our materiality analysis as part of our materiality our operations, our customers and the cities in our commitment to sustainability and reporting which we operate. We envisage Green ICT as an on our activity. This analysis includes - along analysis as additional set of processes and activities that with the materiality of general sustainability can generate value for our Company in terms of - an evaluation of the broader environmental part of our reducing costs and generating new income. questions for Telefónica. This process has led us to important environmental aspects commitment to This year, the environmental information relevant to our Company: electromagnetic fields, given in the Telefónica Sustainability report Green ICT services, energy and CO , and waste sustainability 2 emphasises environmental materiality issues, management. reporting which are managed along 6 lines of action: We have been working on a global methodology ➜ Environmental management on materiality where we include environmental issues. This methodology for evaluating ➜ Energy & climate change relative importance has taken into account as material environmental aspects, the relevant ➜ Green ICT services environmental risks for Telefónica all over the world, and the environmental trends in the ICT ➜ Smart Sustainable Cities sector.
➜ Electromagnetic fields
➜ Global environmental leadership
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PLANET Materiality matrix
Specific environmental management matrix Environmental management_ 10
We include the environment into our business model and we work to adopt e-waste environmental criteria in our operations in order to reduce environmental risks and General sustainability promote operational eco-efficiency matrix 10 Network Visual sharing impact Non e-waste Biodiversity Stakeholder relevance Stakeholder
Paper Water Stakeholder relevance Stakeholder Environmental Gases affecting the management Noise ozone layer 0 10 Impact on company management 0 Impact on company management 10
Risk management
We are We have an environmental policy applicable to all Global environmental management Environmental management expenditure & investment Telefónica companies and a global environmental Legal system (EMS): Nowadays, more than 60% KPIs management system that lets us ensure compliance of our companies, representing 70% of total geographically Million euros compliance with local environmental legislation turnover, have environmental management Others Environmental 12% Waste mgt. Waste management 10.8 very dispersed, and improve our management processes systems that comply with the ISO 14001 34% management Env. so we have a continually. While the environmental impacts of standard and which have been certified by studies/ Electromagnetic fields 3.9 our operations are not intensive, we are highly an external party. In addition, we are working permits Visual impact 3.9 dispersed geographically, making environmental to consolidate the environmental teams in 12% Total particular need Eco- Noise impact 5.8 management based on uniform processes highly efficiency the countries of the Group so as to improve 31,9 M€ necessary, and we group this effort around 5 Global EMS the systems incrementally and build up the Environmental studies & for uniform Noise principles: management capability in companies that are permits 3.8 impact EMFs environmental still implementing the system. 18% Visual 12% Others 3.7 ➜ Measurement of environmental performance impacts management ➜ Global management of environmental risks risks could be the existence of environmental Eco-efficiency: Our continuous improvement 12% Total 31.9 processes ➜ Compliance with environmental regulations liabilities, inadequate waste management, or processes are based on eco-efficiency principles, ➜ Environmental management system the effect of climate change in our operations. that is, optimising the internal processes that ➜ Eco-efficiency Every year we place an economic value on our could have an impact on the environment, environmental risks. reducing the consumption of resources Environmental management system Environmental KPIs: we measure our or reducing the generation of waste. This ISO 14001 ISO 14001 environmental performance using the Legal compliance: we comply with management is linked to economic valuation Company Certific. Company Certific. relevant global management indicators (KPIs), environmental legislation applicable to our of costs, investments and income from Telefónica España* Telefónica México applicable to all of Telefónica’s operators. operations. Should there not be appropriate legal environmental management at global level, which TIWS Telefónica Nicaragua Based on these, we take decisions, identify frameworks, we work with the authorities and the in 2013 reached 32 million euros. potential environmental risks and measure sector to encourage standards and regulations Telefónica S.A. Telefónica Panamá the environmental impact of our operations in that guarantee the environmental sustainability Telefónica Argentina Telefónica Perú economic terms. More info of our activities within reasonable management Telefónica Brasil Telefónica Venezuela parameters. Telefónica Chile Telefónica Uruguay Environmental risks: we handle our environmental risks in terms of the global risk Telefónica Colombia Telefónica Germany management model. Among the most notable Telefónica Ecuador Telefónica UK Telefónica El Salvador Telefónica Ireland Telefónica Guatemala Telefónica Czech Rep. & Slovakia * Includes Telefónica Soluciones
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Responsible network deployment For the deployment of new optical fibre or Waste (tonnes) We manage the environmental aspects LTE networks, we make the optimal selection associated to our network infrastructure. of sites for deployment, always encouraging Recycled Our environmental management is based infrastructure shared with other operators Tip or destruction on processes: before, during and after the and technical evaluations to reduce the Reused 19,822 deployment of our fixed and mobile networks. environmental impact of our infrastructure. We work on the precautionary principle and in 2,531 compliance with local environmental legislation. We also manage the electromagnetic fields (EMF) in our network, as another aspect of our In natural protected areas and of high Global Environmental Management System. This Paper and carton environmental sensitivity we carry out forces us to engage in public participation and Cables, piping & detailed impact studies. We work on obtaining community information during deployment, as metals environmental permits for our operations, waste well as to carry out measurements in the base Total customer management, noise control, reduction of visual stations. More info mobiles managed impact and monitoring electromagnetic fields. 551 0 115
116
Responsible network deployment in figures, 2013 Waste Hazardous Planning Construction Operation Decommissioning Customer e-waste 39 8,700 environmental permits 576 visual impact actions 5.8 million euros invested in 20,372 tonnes of operational (except mobiles) 63 obtained to deploy the noise abatement waste managed (cables, pipes, 3.9 million euros invested in network etc.) 2,797 visual impact actions 24,750 EMF measurements 53 3.8 million euros on 1,672 tonnes of operational 34,421 sites shared with other 3.9 million euros invested in environmental studies and e-waste managed operators EMF measurement obtaining environmental Internal e-waste 37 million of revenues 1,598 permits from operational waste management 2,748
Best practice Best practice
Iquitos: Responsible network Beacon project: Operational eco-efficiency deployment in Peru Shared infrastructure Efficient use of water. Water consumption at varied, but all are handled separately During 2013 Telefónica Peru in the United Kingdom Telefónica is controlled at the level of offices according to the risk they pose, and they are Best practice worked to bring broadband Telefónica UK and as we do not use this resource in our networks. dealt with by duly authorised companies in Internet and 3G mobile service Vodafone UK have During 2013, there was a reduction of 20% in compliance with environmental legislation; Less paper at Telefónica to the capital of the Oriente reached a network total consumption, mainly because of actions the order of priority in handling is: reduction, Germany department of Peru, Iquitos, infrastructure sharing on saving, the simplification of the number reuse and recycling. The most important are with a project that crossed the accord, leading to of buildings in Brazil and awareness-raising network and office electrical and electronic New more efficient printing extensive Amazon jungle. The route of the project was the creation of a map campaigns for employees. equipment, and the most hazardous is equipment has been installed designed so as to skirt, without crossing, the Natural of 18,500 shared basically batteries in our case. In 2013 we at Telefónica Germany, which Reserves of Pacaya Samiria (the largest natural reserve locations, which will offer joint 2G and 3G coverage in the Efficiency in paper consumption. During 2013, handled 30,432 tonnes of waste (recycling will also save energy. The new in the country) and Alpahuayo Mishana. Passing close country, with the objective of covering 98% of the population the Company’s offices used 1,089 tonnes of and reuse) and we generated 40 million equipment works with a printing to a large environmentally sensitive area, an intensive by 2015. new paper and 409 tonnes of recycled paper. We euros of income from sale of waste. security card, personal to each programme of work was required, and this commenced Telefónica UK has been advised by the global Networks and follow various practices at Telefónica aimed at employee, without which
in 2012. It included talks with the Peruvian Ministry Operations department. Technology providers are Huawei, reducing paper consumption, such as: centralised Energy and CO2 management. The carbon printing is not possible and which for the Environment, a detailed environmental impact NSN and Ericsson and is expected the project would reduce printing at specific sites, setting of printing management and the efficient use of energy lets the device automatically study, an environmental permit for the operation, the visual impact of the infrastructure. quotas, and fomenting the use of recycled paper in Telefonica are managed by the Climate eliminate print jobs that have not energy generation using renewable energy systems, The project will allow reductions in the costs of operations, in offices. Change and Energy Efficiency Office. run from its spool. As part of its adaptation of the work so as to avoid the rainy season, in obtainment of environmental permits, deployment of new We work in energy efficiency projects, paper-saving policy, Telefónica and a broad process of citizen participation to explain infrastructure and electricity consumption. It is expected that Efficiency in waste management. Waste renewable energy and emissions reduction Germany has reduced the the project to local communities. there will be a fall of about 13% in electricity consumption, generation is one of the main environmental activities in our value chain. See Energy and number of printing, scanning and More info considering that around 2000 sites will be dismantled. facets of our activity. The types of waste are Climate Change chapter. fax units by at least 50%.
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E-waste management In 2013, Telefónica disposed, for recycling, Greening our value chain Our global environmental We have an integrated policy for managing of around 2,800 tonnes of e-waste from Environmental control to providers. We are electrical and electronic waste (e-waste) based networks and offices. This waste was delivered extending our environmental monitoring to management system requires us to on the “3R” principles of eco-efficiency: Reduce, to qualified handlers, under a model of suppliers and contractors to ensure correct carry out internal and external audits Reuse and Recycle. The principles of e-waste economic recuperation for recycling and reuse environmental management at Telefónica. For management at Telefónica are: of materials. this, as well as incorporating environmental of our suppliers clauses into all our contracts, we carry out ➜ Promote e-waste management models based The schemes designed by Telefónica are activities of training and communication, and also on eco-efficiency principles and in accordance characterised by their promotion of joint audits to monitor our supply chain. The global with the legislation in force. work between specialised waste handlers and environmental management system demands logistics companies, as well as manufacturers the performance of internal and external audits ➜ Support standards that reduce the generation of mobile devices, with the intention of which ensure compliance with legal requirements of e-waste and improve the eco-design of this ensuring “extended responsibility” for efficient and the environmental procedures defined by kind of equipment for telecoms services. e-waste management. Among the challenges the Company at a global level. Indeed, Telefónica for Telefónica is that of correct handling of includes monitoring suppliers as part of our ➜ Develop equipment purchase policies for our customer e-waste, before, during and after use. processes of environmental auditing. Further, we operations that facilitate reuse and recycling at manage sustainability in the supply chain through the end of its useful life. In 2013, we put our emphasis on regulations a specific programme for the same. and standards for correct e-waste ➜ Inform our customers and offer them management, above all in Latin America, Our employees. We are aware of the importance environmentally responsible options for given that not all our countries have suitable of our employees as a pillar in the correct disposing of their unused devices. legislation in this area. We held two workshops environmental behaviour and performance of the on this subject: one in El Salvador More info Company. So, during 2013 we have continued to ➜ Monitor correct e-waste management by and another in Ecuador. More info make efforts to involve all our staff in this and Best practice suppliers and authorised handlers. have carried out various activities.
Telefónica Peru has Following these principles, we have developed ➜ New Telefónica Green Intranet: In 2013, we carried out a project called systems of e-waste management for obsolete launched the new global Green Intranet directed Embajador Verde Recicla network equipment and we have had at employees, where they can find complete (‘the green ambassador recycling and reuse programmes for customer environmental information about the Group. recycles’). The aim of the equipment, including mobiles, ever since 2006. project was to publicise the ➜ Environmental training: in 2013, employees existence of the external received 20,000 hours of environmental training. scheme Recíclame (recycle me) for collecting mobiles, ➜ Environmental volunteering: thanks to the chargers and accessories, to volunteering scheme of Fundación Telefónica, motivate our collaborators Sources of e-waste in Telefónica over 100 activities of environmental volunteering to recycle so as to look took place, involving more than 1950 Telefónica after the environment, volunteers. raise awareness of the importance of recycling Best practice disused mobile devices and manage to increase the Environment Day 2013, Telefónica District Plantation amount of equipment sent Fixed & mobile Offices & logistics Residential & network operations corporate customers for recycling. Computers Various Telefónica volunteers embarked on a day of planting trees, shrubs and aromatic plants in the area next to the Switchboards, Telephones Telephones This project was transmission corporate headquarters in Telefónica District. That day these Obsolete equipment Routers structured as a test of Antennas Switchboards eco-volunteers contributed to improving the landscape and the skill between teams environment. RF equipment Computers made up of Telefónica More info Peru collaborators from different departments. The aim of the competition was to collect the largest number of disused mobiles, Delivery to qualified waste managers batteries and other Collection of equipment by manufacturers accessories. e-waste recycling & reuse programmes More info
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PLANET Materiality matrix
Specific energy and climate change matrix Energy & climate change_ 10 We work to reduce our energy consumption and carbon footprint though developing CO2 emissions energy efficiency activities and identifying CO2 emission reduction opportunities General sustainability matrix Energy
10
Renewable energy Stakeholder relevance Stakeholder Energy
& CO2 Stakeholder relevance Stakeholder
0 10 Impact on Company management 0 Impact on Company management 10
Energy and emissions inventory and emissions data verification process under Every year we quantify Telefónica’s energy the auspices of AENOR. This allows us to identify consumption and calculate our carbon footprint improvements in our processes and to manage using a global model based on the GHG energy and carbon transparently. Protocol of the ISO 14064 standard and the recommendation ITU-T L.1420 “Methodology The Corporate Office carries out this annual for measuring energy consumption and GHG accounting procedure for energy and emissions emissions due to ICT in organisations” from the at global level and for each of the operators of the ITU. We also carry out an independent energy Group, using a unified methodological approach.
Through the Climate Change and Energy Efficiency This work allows us to reduce our energy costs, Telefónica* Energy & Emissions Inventory Office we work to reduce our energy consumption improving our competitiveness by being able and carbon footprint, promoting energy efficiency to offer customer service for the best price. In Fuel (MWh) activities in each of our operations, identifying CO addition we help our partners generate business, GHG emissions 2 (MtCO eq) emissions reduction opportunities and making as they are essential for the development and 2 tangible the results of this effort. implementation of energy efficiency projects. Scope I 1.88 Electricity (MWh) 0.09 Scope II Renewable energy (MWh) 1.79
Energy efficiency in Telefónica
0.24 0.04 1.60 Partners Customers Planet
Energy bill Business Prices CO2 Vehicle fleet Networks Offices
724.2 61.4 54.6 189.7 4519.0 931.3 170.5 *Energy and emissions data being verified by specialists.
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Energy and CO2 targets on energy and CO2 in order to promote, monitor Telefónica, through the Office of Climate Change and manage the work carried out to reduce our and Energy Efficiency, set three global targets energy consumption and carbon footprint.
Energy consumption in networks 2007-2015 30% Equivalent access(1)
kWh/EA 35 32.9 Energy consumption in networks continues growing due to the 29.4 29.4 28.2 30 26.6 (2) 25.8 26.4 30% deployment of new network technology to deliver new digital Best practice 25 services and the increasing of Data Center - Alcalá 20 data consumption in the recent years. The moderate rise of In April 2013 Telefónica 15 our equivalent accesses and inaugurated the ‘Alcalá Data actual the implementation of energy 10 target Center’ outside Madrid, Baseline efficiency activities in networks an innovative data center 5 bring us closer to achieving the with maximum capacity for goal. 0 the digital services of the Telefónica Energy Managers 2014 Energy and Climate Change Global Workshop Panama City. 2007 2008 2009 2010 2011 2012 2013 2014 2015 future. Classed as one of the More information most efficient in Europe, this innovative data center, Electricity consumption in offices 2007-2015 which will serve as the 10% Employee base for the cloud services MWh/Employee offered by Telefónica all 8 over the continent, will carry 6.69 6.69 7.04 6.97(2) 7 on growing progressively 6.07 6.13 6.08 10% Despite the improvement of until completion to then 6 energy efficiency in offices, we still become the most efficient Activities & results ➜ Encouraging the use of renewable energy, mainly monitor the power consumption and ecological giant in To reduce GHG emissions, we are working along in those places where the mains electricity is 5 per employee every year due to the world, with a total of three lines of action: difficult to access. We have acquired 5% more 4 actual the simplification of organizational target 23 IT rooms and capable of our energy from renewable sources than Baseline structure carried out in several of saving 75% on energy ➜ Reduction of electricity consumption through the previous year. Currently, about 15% of the 3 companies. consumption compared projects that improve energy efficiency: we have electricity consumed by Telefónica comes from 2 with other conventional carried out 16 global energy efficiency projects, renewable sources, so avoiding the generation of 1 data centers. It will satisfy yielding savings of 9.1 GWh of electricity use and over 280,000 tonnes of CO2-equivalent. the most demanding reducing its cost by 4.7 million euros. 0 requirements for excellence Similarly, we share the best practices with other 2007 2008 2009 2010 2011 2012 2013 2014 2015 by international standards ➜ To reduce the use of fossil fuels in operations, companies of the Group and recognise the best (Green IT), with the latest offices and vehicle fleets, substituting them by projects each year publicly.
more efficient and cleaner sources of energy, CO2 emissions electrical and cooling 2010-2020 infrastructure. For instance, using vehicles that consume less such as hybrids We held the IV Telefónica Workshop on 30% Equivalent access(1) Our CO emissions have remained 2 it will achieve a PUE (a unit or electric cars, and reducing the distance Energy and Climate Change in Panama, where stable in recent years, about of measurement for energy travelled by improved fleet management. over 100 people gathered, including energy kg CO2 eq/EA 1.8 million metric tons, due to 15 efficiency) of 1.3, compared We have achieved a 15% reduction in fuel managers, technological partners and other the reduction of fossil fuel in with the average current 2.4 consumption in networks and vehicles thanks special guests. The teams from Germany, 12.6 operations and vehicles fleet and for such installations. to energy-saving measures and monitoring Mexico and Brazil were recognised as the best 12 10.9 the implementation of energy 10.1 More info consumption. managers and developers of energy efficiency 9.4 9.1 9.1 9.2(2) efficiency projects in networks and and renewable energy projects at global level: 9 offices. http://www.rcysostenibilidad.telefonica.com/ 30% blogs/2013/12/04/los-equipos-de-alemania- In Europe and Latin America, 6 mexico-y-brasil-logran-los-premios-de-nuestro- the electricity emission factor reto-de-eficiencia-energetica/ is still increasing, where 90% of 3 actuals target our emissions come from, which
Base year significantly affects our target. 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 More info Vídeo: Alcalá Data (1) Equivalent Accesses: The sum of the total accesses (broadband, fixed voice, mobile voice, TV, etc.) weighted by the relative power consumption. Center (2) Energy & emissions data of 2013, under process of external verification.
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PLANET Materiality matrix
Specific electromagnetic fields matrix Electromagnetic fields_ 10
We are aware of the general concern in society regarding this subject, so we provide updated and transparent information; we work in the development EMF in devices EMF in of sectoral standards and comply with international regulations General sustainability matrix network 10 Stakeholder relevance Stakeholder
Electromagnetic fields Stakeholder relevance Stakeholder
Telefónica is aware of the general concern We carry out EMF management at Telefónica by EMF 0 10 regarding electromagnetic fields (EMF). Our coordination between different departments of Impact on Company management 0 Impact on Company management 10 management evaluation of this issue is based on what the the Company at global and local level, including experts say: the scientific studies carried out so the departments of operations, institutional at Telefónica far have not established any risk to health from relations, communication, regulatory and exposure to the radio frequencies from mobile legal units, and environmental and corporate is based on a telephone equipment, provided that the levels sustainability teams, among others. coordinated recommended by the World Health Organisation (WHO) are respected, and these are given in the Likewise, we participate actively in workgroups effort between ICNIRP recommendations. like the GSMA and the ITU to exchange best practices in EMF management, developing different EMF in Telefonica are managed within an standards for the sector and sharing useful integrated approach that focuses in giving information for our customers and interested departments of answers to the concern of our customers and groups. We also support independent scientific the Company at users. We emphasise our management on EMF research in this area. on mobile telecommunications antennas, mobile global and local devices and smart meters. We prioritize the EMF in networks process of network deployment on a local level, level based on global management principles. Thus, All our base stations have been installed in the minimum commitments on EMF, common to accordance with the criteria of the ICNIRP all the operators of Telefónica Group are: and the WHO recommendations. We comply with these limits in all our operating countries, ➜ To comply strictly with the law and recognised even those where there are no regulations in international standards and guidelines, for all this matter. In addition, the Telefónica global products and services. environmental management system obliges us to carry out activities of public participation ➜ To encourage legislation based on international and communication, as well as carry out guidelines from the International Committee measurements at the base stations which are on Non-Ionizing Radiation Protection (ICNIRP), later audited for compliance with ICNIRP levels. especially in those cases where there is no local All our stations operate well below the set limits. regulation, and which is in keeping with these for reasons of uniformity and to eliminate barriers for In 2013, Telefónica carried out about 25,000 network deployment. EMF monitoring measurements, representing an investment of 3.9 million euros globally. ➜ To support and publicise independent scientific research of high quality on mobile communications, EMF in mobile devices and smart recognised by the WHO. meters ➜ To communicate all the Company’s actions in this In 2013, the social concern about the exposure regard openly and transparently to our clients and to EMF has been extended to mobile devices the public in general. and smart meters. It is noteworthy that there is Full information legislation international controlling these levels about electromagnetic fields of exposure. All devices Telefónica puts on the at Telefónica market meet these standardized criteria.
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PLANET Materiality matrix
Specific Green ICT Services matrix 10 Green ICT Services_ Smart cities
Our Green ICT Services help to optimise the use of scarce resources like energy and water, and Smart Smart manage aspects of the environment such as waste, the climate, air quality, etc buildings metering General sustainability matrix
10 Buyback & recycling
Stakeholder relevance Stakeholder Electronic Green ICT billing Services We provide services based on ICT that promote Green Services to B2B customers - Green Services relevance Stakeholder a low-carbon economy and environmental Corporate and Business clients lead to sustainability of our customers and cities. Our 0 10 “Green ICT” Services help to optimise the use We work to deliver Green ICT Services to our Impact on Company management 0 Impact on Company management 10 environmental of scarce resources like energy and water, and Business to Business (B2B) customers and we benefits from manage aspects of the environment such as help to promote an eco-efficient economy low waste, the climate, air quality, etc. in carbon and also help to make sectors like the savings transport, construction, industry and service Telefónica’s aim is to go beyond connectivity and companies (utilities) more efficient. they generate, it is focussed on providing services that convert the environmental benefits of our solutions into Being a Digital Telco, we are putting a lot of effort and so we need value. Green Services generate environmental into including green ICT solutions formally in our standards to benefits because of the savings on resources catalogues of products and services, in joint work that arise (energy, water, less waste, time, etc). with the departments of Marketing, Innovation Best practice measure these Therefore it is important to measure the savings and Business Development at global and local using standards that allow comparison and level. Most of these services are already in use in Expansion of the Vivo Clima service of Telefónica in Brazil Smart meters in the UK savings replication of these services at a global level. the Group’s various operations around the world. Antonio Carlos Valente, chairman of Telefónica in Brazil, signed Telefónica UK has been designated as the connectivity a technical cooperation agreement with the Ministry for provider for smart metering services in that country, which will Science, Technology and Innovation, and the Brazilian national generate income of nearly 1800 million euros for us over the center for natural disaster monitoring and alert (Cemaden), next 15 years. Our operator has been awarded two of the three to broaden the scope of the VIVO Clima meteorological regions in the country for the provision of communications Telefónica’s Green ICT Services monitoring system. This signing represents the continuation services within the overall Smart Meter Implementation of the pilot project that began last year in the city of Mauá, in Programme (SMIP). This initiative is the most ambitious smart the region of Sao Paulo. meter scheme in the world, and envisages the installation of 2. Smart buildings Smart buildings (digital over 53 million smart meters by 2020. home, domotics) The service provides real-time information on levels of More info 3. Smart transport 1. Smart grids Smart transport & logistics precipitation in different geographical areas. VIVO Clima uses Smart grids & Smart (fleet management, meters (water, energy, rain gauges installed on Telefónica’s mobile base stations electric vehicles) gas, temperature, in Brazil which remit their data to the Company’s M2M pollution) management platform. More info
Green ICt services Smart Smart users cities B2C B2B
5. Devices 4. Virtual services & applications (e-meetings, virtual (green apps, hosting, cloud monitoring, weather) computing)
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Green services to residential Digital services and electronic billing customers: B2C All the countries where we operate have systems Best practice of commercial efficiency, digital signature and Telefónica’s operating business reinforced their electronic billing. During 2013, we reached the Devices without charger in the United Kingdom ‘green experience’ activities at a local level for figure of 43 million customers using the electronic “Charger Out of the Box” our residential customers (B2C) Business to billing service, which let us reduce consumption One of the most important initiatives by Telefónica Customer. Various initiatives such as, for example, of paper for bills by 18% at global level and leads O2 UK during 2013 was the sale of mobile phones with activities at the point of sale, provision of virtual to important savings for the Company. These no charger. It is assumed that the great majority of services like electronic billing and promotion of practices also extend to our corporate and customers already have a charger compatible with their recycling and reuse, above all of mobiles, should business clients. terminal. So, Telefónica UK is campaigning for mobile all be mentioned. In our countries, different manufacturers not to sell their devices with a charger. environmental activities have been carried out for Eco-shops and “green” customer service This encourages lower generation of customer waste customers under our Movistar, O2 and Vivo brand In some shops specific points have been set up in as this kind of device is not included with the sale of names. our shops with environmental information for our terminals. In 2013, Telefónica O2 UK launched this customers and incentives to participate. During initiative in conjunction with HTC, with great success. 2013, countries such as Venezuela and Germany More information included environmental initiatives in the stores and customer attention services. Best practice
Efficient devices recycling, reuse or final disposal of devices Telefónica is working to bring the best and belonging to mobile, fixed line or internet most efficient mobile devices to our customers. customers. Currently, Telefónica O2 UK and Germany give their customers information about the During 2013, we handled 1,892 tonnes of environmental characteristics of their devices, e-waste from customers, of which 231 tonnes Telefónica mobile referring to the ‘eco-rating’: an internal corresponded specifically to reuse and recycling phone recycling and methodology for measuring the environmental processes for mobile devices and accessories. reuse programmes impact of mobile devices, which is currently undergoing the ITU standardisation process and We believe in shared responsibility for Green Corners (Esquinas Verdes) in Venezuela Recycling Reuse Telefónica Movistar Venezuela has developed a programme leaded by Telefónica. environmental management of customer devices, of ‘green corners’ in its most emblematic shop locations in so that we try to keep our clients informed and the country to inform customers about waste collection Recycling and reuse of customer devices provide them with environmentally responsible points for disused mobile terminals. There are 20 collection Since 2005, Telefónica has been carrying out options when it comes to disposal of their disused Spain points, 5 of them in alliance with the Ministry for the customer device management activities in devices. In all the countries in which we operate, Ecuador Environment of Venezuela. During 2013, we collected 4 compliance with the relevant environmental we have customer waste management schemes, Argentina tonnes of waste. The company that handles this waste regulations and with voluntary customer loyalty above all for mobile service customers. is KBL of Venezuela, who will carry out its export and initiatives. These activities are focused on the Chile recycling once the required volume has been accumulated, Colombia jointly with the German company Aurubis. Costa Rica Best practice Mexico
Commercial eco-efficiency in Brazil Nicaragua A customer registration and digital signature Best practice Peru solution was introduced in all Telefónica Vivo shops, providing a paperless sales service by Panama means of a tablet. The aim of this initiative Venezuela was to reduce the costs of operation, the use of paper in document management, and El Salvador Green shops in Germany customer waiting time, and so to raise the Telefónica O2 Germany has introduced paper bags in place time available during which users can acquire of plastic ones in all its shops, for delivering products to new services and devices. This is a pioneering Brazil customers. The bags are made from FSC-certified paper solution for the telecoms market in Brazil. (FSC: Forest Stewardship Council). They are now available Thanks to this initiative, Telefónica Vivo has in all our own shops, third-party and specialist shops. obtained savings of about 1.5 million euros O2 Recycle in Germany Green Movistar in Ecuador ‘Recycle your cellphone’ with United Kingdom Similarly, the ‘O2 Guru’ informs customers about the per year in documents management and a Telefónica Vivo in Brazil environmental benefits of the bags, recycling alternatives 70% reduction of printed paper for mobile Czech Republic and any other environmental information they need. This and portability services. Germany simple action has generated savings of up to 20,000 euros 4.9 8.8 7.9 Ireland per year. tonnes for recycling and reuse tonnes for recycling tonnes for recycling
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PLANET Smart Sustainable Cities_
We provide ICT solutions for the sustainability challenges of “smart cities” and as a differentiating element we have an open and transversal technological platform
Our smart Sustainability of urban areas is a vital issue, as Business development for smart Standardisation for smart Technological innovation for smart Best Practice 70% of the world’s population will live there city platform by 2050. Currently, urban areas emit 71% of cities sustainable cities cities FI-WARE Platform and Smart greenhouse gases and account for between 60% We provide the best technology and services for Our Smart City value proposal is fundamentally The Telefónica platform, developed by Telefónica Santander allow us to and 80% of world energy consumption. ICT can smart cities. So, in recent years, and especially based on the tangible benefits and savings on R&D, is the first created that conforms to the assume market provide solutions to make them more efficient in 2013, we have been working to consolidate resources (energy, water, waste, time, etc.) FI-WARE platform standard promoted by the During 2013, the European and sustainable by means of so-called smart what we offer customers. Our aim is to emphasise associated with the deployment of ICT services, European Commission for the deployment and Commission project FI-WARE, leadership cities. value in the offers made to clients, which include and an integrated management platform. To this development of applications in the Internet of led by Telefónica, concluded. eco-efficiency principles in the management of end, we are working to develop global standards the Future. It is cloud-based, open, and allows It has managed to create the At Telefónica, we offer solutions to the challenges resources in cities. for smart cities and sustainability, by so as we the city data to be managed with flexibility, Smart Santander project, which of smart cities, and as a differential element, contribute with our experience and work to reliability, security and efficiency, from a single is the largest smart city scheme we have a transversal and open technological In Spain, we have been working on smart cities establish uniform measurement methodologies point of access. It simplifies decision-making in the world. With over 20,000 platform for the development and integration projects for several years, including the technical that let us assess the impact of ICT solutions and improves the efficiency of municipal service sensors, it offers a test bank with applications from other companies. advice and support for RECI (the Spanish smart implemented in cities. management by means of a complete control that the European Union has Similarly, we work at a global level with the city network), and the choice of Telefónica as panel. classified as essential because various departments and companies of the Group technological platform provider for the Valencia ➜ ITU Focus Group Smart Sustainable Cities: it offers a unique platform for to position Telefónica as a leader in the provision Smart City. Telefónica is the leader and Chair of this The traditional services - traffic, transport, experimentation on a large scale of ICT services that promote the sustainability international working group whose objective is parking, water management and treatment, in real conditions. of cities. We encourage processes of innovation, We also work in the delivery of smart city services to increase the role of ICT in the environmental parks and gardens, cleaning, waste management, technological development and standardisation in Latin América. In Brazil we are participated sustainability of cities. More info commerce, lighting, emergencies, security, health FI-WARE offers APIs for sustainable smart cities. in the Sao Paulo pilot project for the services of - can be managed, provided and optimised from (Application Programming education, tourism, health and the public services ➜ ITU-T Study Group 5 and Question 18: We are any device at any time or place, thanks to this Interfaces) whose specifications of street lighting, security, traffic and parking. contributing to the development of a methodology platform. are public and royalty-free, to assess the environmental impact of ICT in backed by the availability of cities, which is part of the sector’s standards for By putting its smart cities platform into service, a reference implementation evaluating the carbon footprint of iCT. Telefónica has managed to get ahead of the in open source code, thus More info market and offer the first commercial platform speeding up the appearance Best Practice conforming to these standards. of new providers on the ➜ AENOR Technical Smart Cities Standards market. Telefónica R&D has Valencia becomes a Smart City thanks to Telefónica Committee (AEN/CTN 178): AENOR (the Spanish contributed to the reference national standards authority) with the support of implementation with a During 2013 we have been working with the Spanish the Secretary of State for Telecommunications significant number of FI-WARE city of Valencia to give it its first complete management and the Information Society. We participate platform modules. technological solution that includes all its services in a single in this committee, which aims to define smart cities platform. This interconnects the areas of mobility, standards for Spain that encourage smart cities Thanks to its open nature, technology, energy efficiency, environment, population and contribute to the ISO infrastructure and application providers can management and urban planning, among others, through 350 performance standards for smart cities. choose who will provide and indicators which monitor the city. It also lets Valencia reduce More info operate the environment that costs by 4 million from the current 14 million. will host their applications. FI-WARE Reducing public spending, optimising management efficiency facilities, environment, cleaning, waste collection, lighting, crane More info and improving service quality are the main aims of putting this service, parks and gardens and meteorology. All these services are platform into service. It turns Valencia into a technological monitored permanently and connected via the latest optical fibre capital with efficient infrastructure for telecommunications, technology, guaranteeing almost unlimited bandwidth and speed. gas, transport, emergency and security services, public More info
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PLANet Global environmental leadership_
Telefónica is working towards a global position on environmental matters along with the ICT sector and all the companies of the Group
Telefónica has We believe in the ICT potential to promote environmental sustainability. Telefónica’s green been recognized positioning is based on three principles that Green ICT standards. We continue to work ➜ We also chair the Smart Sustainable Cities Focus include a joint effort among the global green on Study Group No. 5 of the International Group of the ITU. More info as one of the team, operating businesses and the ICT sector: Telecommunications Union (ITU) to promote green ICT standards to measure the ➜ We hosted the most important green ICT most committed ➜ Trust and Transparency environmental impact of ICTs. standards event in the world: the 3rd Green companies in ➜ Green ICT standards Standards Week, at our corporate headquarters ➜ Public Advocacy strategies. ➜ We worked on the development of the ITU L1430 in Madrid, with the participation of nearly 400 the fight against Carbon Disclosure Project Leadership Methodology to measure the impact of green ICT people. More info Trust and transparency. Our investors, analysts (CDPL) Index - services, and we chair the workgroup responsible climate change and NGOs have acknowledged our achievements. for developing the methodology for mobile Telecommunications Sector phones, ‘Eco-rating’. More info ➜ Telefónica was among the 5 leading telecoms companies for the fourth consecutive year in the 100 Carbon Disclosure Project (CDP). More info Swisscom ➜ We are one of the 10 best telcos in the world by AT&T sustainability criteria, including the environment, Telenor NTT according to the DJSI. More info BT Vodacom
➜ We are one of the top 5 companies most BCE Telefónica committed to fighting climate change in the 90 Deutsche Telekom recent rankings of the British NGO Environmental Investment Organisation (EIO). More info
➜ We are one of the 20 best companies in the “Cool IT Leaderboard 6” ranking by Greenpeace, in which the efforts by companies to promote a low-carbon economy and reduce emissions of greenhouse gases (GHG) are evaluated. More info 80 Green Standards Week, 2013. Madrid
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3rd ITU Green Standards Week, Madrid 2013. 1st International forum on Electronic Waste and Electromagnetic Fields, Quito, 2013.
Telefónica in strategic fora and working groups Public advocacy: we are working on increasing ➜ Workshop on E-waste and Electromagnetic Fields We are also working with other institutions to the contribution of the ICT sector and Telefónica in Quito-Ecuador. We sponsored the largest event encourage the use of ICT for environmental to promoting the environmental sustainability of on managing electrical and electronic waste and sustainability, energy efficiency and as a tool in technology users and cities. During 2013, we took electromagnetic fields in Latin America, jointly the fight against climate change. ETNO - European an active part in the following groups: with Telefónica Movistar Ecuador, the ITU and the Telecommunications Ministry for the Information Society of Ecuador. GeSI: The Global E-Sustainability Initiative:,where Network Operators’ ITU: We are active in Study Group No. 5 on More info we are covering the groups on Climate Change, Association the development of green ICT standards and Energy Efficiency, and Environmental Monitoring in positioning of the ICT sector at an international GSMA: We are working with the GSMA to the Supply Chain, among others. More info GSMA - level on issues like e-waste and electromagnetic promote the environmental sustainability of ITU - International GSM Association fields, and organised various events and activities: mobile communications all over the world: ETNO: Within ETNO (European Telecommunication Telecommunications Networks Operators), we Union ➜ We held the 3rd Green ICT Application Challenge ➜ In conjunction with the GSMA, the Inter-American are working on the Energy Task Force to promote jointly with the ITU for the third consecutive year. Development Bank (IDB) and Telefónica Movistar the most energy-efficient practices in networks The winning application was GreenPlay, a game Nicaragua, we carried out the study “Beyond at a European level. , Green ICT for learning how to manage waste in cities. More Coverage: The opportunity for mobile operators GSMA: Beyond coverage. The opportunity for mobile operators info to improve access to energy in Latin America”. European Round Table of Industrialists to improve access to energy in More info (ERT): We are participating in the ERT group GeSI - Global Latin America ➜ Workshop on E-waste in Central America. San on Energy and Climate Change, where we are e-Sustainability Salvador – El Salvador. We are promoting efficient ➜ Energy Efficiency Benchmarking in Mobile trying to identify the risks and opportunities that Initiative management of e-waste in the region. More info Networks: For the fourth consecutive year, we European policies on energy and climate change have been working with the GSMA to identify new can have in competitiveness of our companies. ➜ Workshop on Smart Sustainable Cities in Latin opportunities to optimise energy consumption More info Empresas por la More info ERT - European Round America. In Sao Paulo Brazil: Together with on our networks, thanks to the energy efficiency Eficiencia Energética on the GSMA study Table of Industrialists Telefónica Vivo, we held a workshop to promote comparative analysis service. More info Business Platform for Energy Efficiency environmental sustainability of the cities of Latin in Spain: In our home country, Spain, we are America through ICT. More info working on energy efficiency projects with the largest companies in the country. More info
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Compliance with Review and external Glossary of terms_ Global Compact_ validation of the Report_
Summary of Best Thanks_ Practices_ 8. Annexes_ Telefónica Corporate Sustainability report 2013
Telefónica Sustainibility indicators_
Unit 2012 2013 % Var. Unit 2012 2013 % Var. Economic efficiency Environmental aspects Telefónica revenues Million Euros 62,356 57,061 -8.5% Responsible network roll-out Technological innovation Million Euros 5,771 6,142 6.4% Visual impact actions Units 677 576 -14.9% Fiscal contribution (1) Million Euros 13,806 14,060 1.8% Shared infrastructure Units 32,932 34,421 4.5% Total salary costs Million Euros 8,569 7,208 -15.9% Electromagnetic field measurements Units 16,585 24,750 49.2% Investment in infrastructure (1) Million Euros 9,458 9,395 -0.7% Environmental investment and management Million Euros 33.0 31.9 -3.3% Volume of purchases awarded Million Euros 27,958 26,537 -5.1% Resource consumption R&D investment Million Euros 1,072 1,046 -2.4% Total paper consumption (commercial and office activities) Tonnes 11,854 10,139 -14.5% Local suppliers % 80.3 83.9 4.5% No. of e-bill customers Thousands 17,272 43,617 151.9% No. of employees dismissed for non-compliance with Business Principles Units 2 3 50.0% Water consumption m3 5,581,053 4,447,575 -20.3% No. of corruption incidents investigated by the Business Principles’ Office Units 1 1 0.0% Waste Employees trained in Business Principles % 55.3 63 13.9% Total waste managed (operations, offices and customers) Tonnes 30,581 30,432 -0.5% No. of audits of risk suppliers Units 1,701 1,545 -9.2% Generator group battery waste (operations and offices) Tonnes 1,766 2,819 59.6% Waste electrical and electronic devices (operations and offices) Tonnes 1,593 2,801 75.8% Customer waste electrical and electronic devices Tonnes 1,350 1,892 40.1% Social aspects Recycling and reuse of customer mobile phones and accessories Tonnes 216 231 6.9% Total physical workforce Persons 133,263 126,730 -4.9% Fixed workforce Persons 126,123 118,937 -5.7% (3) (4) (2) Energy and CO inventory Absenteeism rate Days 5,556 5,599 0.8% 2 No. of training hours Thous. hours 6,026 2,983 -50.5% Energy MWh 6,421,528 6,648,339 3,5% Women in workforce % 37.9% 38.3% 1.0% Fuel MWh 480,845 410,207 -14.7% Female managers % 19.3% 21% 8.7% Biofuel MWh 6,880 4,595 -33.2% No. of people with disabilities Persons 1,070 961 -10.1% Electricity MWh 5,933,803 6,233,537 5.1% Total social investment (LBG) Thous. Euros 158,061 128,885 -18.5% Energy from renewable sources MWh 943,814 990,260 4.9%
[5] Volunteering hours Hours 186,592 195,906 5.0% Greenhouse gas emissions tCO2eq 1,824,521 1,889,466
Direct emissions (scope I) tCO2eq 112,092 95,537 -14.8%
Indirect emissions (scope II) tCO2eq 1,712,429 1,793,929 4.8%
[6] Emissions avoided tCO2eq 308,167 283,614 -8.0%
(1) This figure differs from the one published in the section, Telefónica as a driving force of progress, in the communities in which it is present. It is expressed here on an accrual rather than a cash basis. (2) Absenteeism rate (AR). AR = total no. of days lost through absenteeism during the period/ total no. of days worked by the workforce as a whole. (3) Inventory based on ISO 14 064, GHG Protocol & ITU-T L.1420. (4) 2012 energy and emissions data verified in 2013. 2013 energy and emissions data currently being verified. (5) CO2eq = CO2, CH4 & N2O. (6) Emissions avoided thanks to purchase of renewable energy.
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United Kingdom Global Annexes The Best Use of Twitter in a N º 4 in the ‘Fortune’ magazine ‘Most Graduate Recruitment Campaign Admired Company’ ranking ‘Best Use of Twitter in a Graduate Telefónica was ranked Recruitment Campaign’ awarded fourth among the World’s Most Awards and by the consulting firm MR Admired Telecommunications Adcomms to the Talentum Operators, and was the top non- initiative American company in overall score _ on this list acknowledgements Sustainability leaders 2014 RobecoSAM Bronze Class Telefónica’s way of doing business has received awards European Union Selected as one of 10 companies in Best Innovation Project the DJSI World for its sustainability World Research and Innovation and recognition in various parts of the world Successful Case Study in the Congress ‘Manual for Enterprises on For the HELP programme (Home- Corruption, Ethics and Compliance’ based Empowered Living for The TEF Business Principles Office Parkinson’s Disease Patients), has been included as a success story which aims to improve the quality in the Anti-Corruption Ethics and of life for Parkinson’s patients, Mexico Compliance Handbook for Business through a monitoring system and Recognition of Best Practices promoted by the OECD, the United the remote, real-time, automatic in CSR 2013 from The Mexican Nations Office on Drugs and Crime adjustment of medication Center for Philanthropy (Cemefi) (UNODC) and the World Bank In the Value Chain category for its Aliados (Partners) project 25th place in the ‘Best Companies to to promote the sustainable Work For 2013’ Telefónica is among the 25 best management of partner companies Czech Republic companies to work for in the world, and third parties 3rd place, TOP responsible according to the 3rd edition of the company Venezuela Recognition for the work of worldwide ranking Best Multinational 1st place companies in designing and Workplaces prepared by the Great Great Place to Work implementing sustainable Place to Work consulting firm, and is Recognition as initiatives that contribute real the top-ranked international telco in ‘Best Company to value to society, the economy this field Work For’ due to its and the environment work environment, corporate policies and Colombia the perception that Social Investment Award - employees have of Pioneer Awards 2013 their company Recognition from the United España Nations Global Compact for Business Sponsorship Internet Award 2013, ‘Best 4th Corresponsables Awards, ‘Large the project Aquí estoy y Actúo and Patronage Award Economics-related initiative’ Company’ category ‘Jobs and Knowledge’ category for the Award for M-Inclusion, the pioneering (Here I Am Taking Action) to Peru category Wayra project For Wayra for supporting and mobile inclusion platform for Europe help companies to prevent child Special Mention, ‘Socially labour in their value chain promoting technological start-ups and Latin America Responsible Company Peru Forum on Corporate Responsibility 2021’ for Entrepreneurs University of Cantabria Award for Autelsi Prize 2013 Recognition of the company Award for outstanding work in Business Collaboration Award for M-Inclusion in the ‘Social as an organisation committed Corporate Social Responsibility for To Telefonica I+D for the long and and Environmental Commitment’ Latin America to socially responsible the Wayra programmes to support fruitful collaboration with this category for its contribution to 4th place management as part of its entrepreneurs institution and the Cantabrian inclusion and social entrepreneurship Great Place to Work business culture and strategy community. Recognition as ‘Best Company 8th Garben Training and Enterprise to Work For’ due to its work Award CDP Climate Disclosure Leadership environment, corporate Award for ‘Best Training Work at a The only Spanish telco in the Climate policies and the perception Large Company’ for the Universitas Disclosure Leadership Index Iberia that employees have of their Brazil Telefónica initiative 125 (CDLI) of CDP, aimed at 722 company Special Education Award from investors representing $87 trillion ARede in assets For the Fundación Telefónica Classrooms project to improve initiatives for social inclusion and visibility using information and communication technology (ICT)
Awards
Nº 5 in the telco industry Member of the top category, DJSI Listed for twelve Sustainability Leaders Prime Rating 5th telco out of Excellence World Index, 86 points consecutive years Bronze class 112 operators Investment Register
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GRI references G3.1_
3. Report Parameters Profile Reported Explanation STANDARD DISCLOSURES PART I: Profile Disclosures Disclosure Description 2013 Location for omission Principles for the 2013 3.1 Reporting period (e.g., fiscal/calendar year) for information provided. YES 1. Strategy and Analysis Sustainability report Profile Reported Explanation Principles for the 2013 Disclosure Description 2013 Location for omission 3.2 Date of most recent previous report (if any). YES Sustainability report 1.1 Statement from the most senior decision-maker of the organization. YES Letter from the Chairman Principles for the 2013 3.3 Reporting cycle (annual, biennial, etc.) YES Corporate responsibility and Sustainability report 1.2 Description of key impacts, risks, and opportunities. YES sustainability as part of the Telefónica vision Principles for the 2013 3.4 Contact point for questions regarding the report or its contents. YES Sustainability report
2. Organizational Profile Principles for the 2013 3.5 Process for defining report content. YES Profile Reported Explanation Sustainability report Disclosure Description 2013 Location for omission Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, Report boundary and 3.6 YES Principles for the 2013 joint ventures, suppliers). See GRI Boundary Protocol for further guidance. structure 2.1 Name of the organization. YES Sustainability report State any specific limitations on the scope or boundary of the report (see Report boundary and 3.7 YES Principles for the 2013 completeness principle for explanation of scope). structure 2.2 Primary brands, products, and/or services. YES Sustainability report Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced Report boundary and Operational structure of the organization, including main divisions, operating 3.8 operations, and other entities that can significantly affect comparability from YES 2.3 YES Financial report structure companies, subsidiaries, and joint ventures. period to period and/or between organizations.
Principles for the 2013 Data measurement techniques and the bases of calculations, including 2.4 Location of organization's headquarters. YES assumptions and techniques underlying estimations applied to the Sustainability Report Report boundary and 3.9 compilation of the Indicators and other information in the report. Explain YES Number of countries where the organization operates, and names of structure Report boundary and any decisions not to apply, or to substantially diverge from, the GRI Indicator 2.5 countries with either major operations or that are specifically relevant to the YES structure Protocols. sustainability issues covered in the report. Explanation of the effect of any re-statements of information provided Principles for the 2013 in earlier reports, and the reasons for such re-statement (e.g.,mergers/ Report boundary and 3.10 YES 2.6 Nature of ownership and legal form. YES Sustainability report and acquisitions, change of base years/periods, nature of business, measurement structure Corporate Governance report methods).
Markets served (including geographic breakdown, sectors served, and types of Significant changes from previous reporting periods in the scope, boundary, or Report boundary and 2.7 YES Customer satisfaction 3.11 YES customers/beneficiaries). measurement methods applied in the report. structure
Report boundary and Report boundary and 2.8 Scale of the reporting organization. YES 3.12 Table identifying the location of the Standard Disclosures in the report. YES structure structure
Significant changes during the reporting period regarding size, structure, or Report boundary and Policy and current practice with regard to seeking external assurance for the Principles for the 2013 2.9 YES 3.13 YES ownership. structure report. Sustainability report Awards and 2.10 Awards received in the reporting period. YES acknowledgements
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4. Governance, Commitments. and Engagement Profile Reported Explanation Disclosure Description 2013 Location for omission STANDARD DISCLOSURES PART II: Disclosures on Management Approach (DMAs) Governance structure of the organization, including committees under the Reported Explanation 4.1 highest governance body responsible for specific tasks, such as setting strategy or YES Corporate Governance report G3 DMA Description 2013 Location for omission organizational oversight. DMA EC Economic dimension YES Throughout the report Indicate whether the Chair of the highest governance body is also an executive 4.2 YES Corporate Governance report DMA EN Environmental dimension YES Throughout the report officer. DMA LA Labour dimension YES Staff For organizations that have a unitary board structure, state the number and 4.3 gender of members of the highest governance body that are independent and/or YES Corporate Governance report DMA HR Human rights dimension YES Human Rights non-executive members. DMA SO Society dimension YES Throughout the report Mechanisms for shareholders and employees to provide recommendations or 4.4 YES Corporate Governance report direction to the highest governance body. DMA PR Product responsibility dimension YES Responsible management
Linkage between compensation for members of the highest governance body, 4.5 senior managers, and executives (including departure arrangements), and the YES Corporate Governance report organization's performance (including social and environmental performance). STANDARD DISCLOSURES PART III: Performance Indicators Processes in place for the highest governance body to ensure conflicts of interest 4.6 YES Corporate Governance report are avoided. Economic Process for determining the composition, qualifications, and expertise of the Performance Reported Explanation 4.7 members of the highest governance body and its committees, including any YES Corporate Governance report Indicator Description 2013 Location for omission consideration of gender and other indicators of diversity. Economic performance Internally developed statements of mission or values, codes of conduct, and Direct economic value generated and distributed, including revenues, 4.8 principles relevant to economic, environmental, and social performance and the YES Ethics and compliance operating costs, employee compensation, donations and other EC1 YES Driver of progress status of their implementation. community investments, retained earnings, and payments to capital providers and governments. Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social Corporate responsibility and Financial implications and other risks and opportunities for the Environmental EC2 YES 4.9 performance, including relevant risks and opportunities, and adherence or YES sustainability structure in organization's activities due to climate change. management compliance with internationally agreed standards, codes of conduct, and Telefónica, S.A. principles. Telefónica as a responsible EC3 Coverage of the organization's defined benefit plan obligations. YES investor Corporate responsibility and Processes for evaluating the highest governance body's own performance, 4.10 YES sustainability structure in EC4 Significant financial assistance received from government. YES Financial report particularly with respect to economic, environmental, and social performance. Telefónica, S.A. Market presence Corporate responsibility and Explanation of whether and how the precautionary approach or principle is 4.11 YES sustainability as part of the Range of ratios of standard entry level wage by gender compared to Fair pay and performance addressed by the organization. EC5 YES Telefónica vision local minimum wage at significant locations of operation. recognition
Externally developed economic, environmental, and social charters, principles, or Policy, practices, and proportion of spending on locally-based suppliers 4.12 YES Social action at Telefónica EC6 YES Driver of progress other initiatives to which the organization subscribes or endorses. at significant locations of operation. Procedures for local hiring and proportion of senior management hired Attracting and retaining Memberships in associations (such as industry associations) and/or national/ EC7 YES international advocacy organizations in which the organization: * Has positions in Materiality and stakeholder from the local community at significant locations of operation. talent 4.13 YES governance bodies; * Participates in projects or committees; * Provides substantive engagement Indirect economic impacts funding beyond routine membership dues; or * Views membership as strategic. Development and impact of infrastructure investments and services Materiality and stakeholder 4.14 List of stakeholder groups engaged by the organization. YES EC8 provided primarily for public benefit through commercial, in-kind, or YES Innovation at Telefónica engagement pro bono engagement. Materiality and Stakeholder 4.15 Basis for identification and selection of stakeholders with whom to engage. YES Understanding and describing significant indirect economic impacts, engagement EC9 YES Driver of progress including the extent of impacts. Approaches to stakeholder engagement, including frequency of engagement by Materiality and stakeholder 4.16 YES type and by stakeholder group. engagement
Key topics and concerns that have been raised through stakeholder engagement, Materiality and stakeholder 4.17 and how the organization has responded to those key topics and concerns, YES engagement including through its reporting.
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Performance Reported Explanation Environmental Indicator Description 2013 Location for omission Performance Reported Explanation Emissions, effluents and waste Indicator Description 2013 Location for omission EN16 Total direct and indirect greenhouse gas emissions by weight. YES Energy and climate change Materials Environmental EN17 Other relevant indirect greenhouse gas emissions by weight. YES Energy and climate change EN1 Materials used by weight or volume. YES management Initiatives to reduce greenhouse gas emissions and reductions EN18 YES Energy and climate change Environmental achieved. EN2 Percentage of materials used that are recycled input materials. YES management EN19 Emissions of ozone-depleting substances by weight. YES Energy and climate change
Energy This indicator is EN3 Direct energy consumption by primary energy source. YES Energy and climate change not applicable for the EN20 NOx, SOx, and other significant air emissions by type and weight. NO Not applicable EN4 Indirect energy consumption by primary source. YES Energy and climate change Company’s activities as a EN5 Energy saved due to conservation and efficiency improvements. YES Energy and climate change whole Initiatives to provide energy-efficient or renewable energy based Green ICT Services and This indicator is EN6 products and services, and reductions in energy requirements as a YES Sustainable Smart Cities not applicable result of these initiatives. for the EN21 Total water discharge by quality and destination. NO Not applicable Company’s Initiatives to reduce indirect energy consumption and reductions EN7 YES Energy and climate change activities as a achieved. whole
Water Environmental EN22 Total weight of waste by type and disposal method. YES Environmental management EN8 Total water withdrawal by source. YES management This indicator is This indicator is not applicable for the not applicable EN23 Total number and volume of significant spills. NO Not applicable for the Company’s EN9 Water sources significantly affected by withdrawal of water. NO Not applicable Company’s activities as a activities as a whole whole This indicator is not applicable Environmental Weight of transported, imported, exported, or treated waste deemed EN10 Percentage and total volume of water recycled and reused. YES for the management EN24 hazardous under the terms of the Basel Convention Annex I, II, III, and NO Not applicable Company’s VIII, and percentage of transported waste shipped internationally. Biodiversity activities as a whole Location and size of land owned, leased, managed in, or adjacent to, Environmental EN11 protected areas and areas of high biodiversity value outside protected YES This indicator is management not applicable areas. Identity, size, protected status, and biodiversity value of water for the Description of significant impacts of activities, products, and services EN25 bodies and related habitats significantly affected by the reporting NO Not applicable Environmental Company’s EN12 on biodiversity in protected areas and areas of high biodiversity value YES organization's discharges of water and runoff. management activities as a outside protected areas. whole This indicator is not applicable Products and services for the EN13 Habitats protected or restored. NO Not applicable Initiatives to mitigate environmental impacts of products and services, Company’s EN26 YES Green ICT services activities as a and extent of impact mitigation. whole
Strategies, current actions, and future plans for managing impacts on EN14 YES Planet biodiversity.
This indicator is not applicable Number of IUCN Red List species and national conservation list species for the EN15 NO Not applicable with habitats in areas affected by operations, by level of extinction risk. Company’s activities as a whole
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Percentage of products sold and their packaging materials that are Environmental Performance Reported Explanation EN27 YES reclaimed by category. management Indicator Description 2013 Location for omission Performance Reported Explanation Occupational health and safety Indicator Description 2013 Location for omission Percentage of total workforce represented in formal joint Compliance LA6 management-worker health and safety committees that help monitor YES Health and safety and advise on occupational health and safety programmes. Monetary value of significant fines and total number of non- Environmental EN28 monetary sanctions for non-compliance with environmental laws and YES Rates of injury, occupational diseases, lost days, and absenteeism, and management LA7 YES Health and safety regulations. number of work-related fatalities by region and by gender.
Transport Education, training, counseling, prevention, and risk-control LA8 programmes in place to assist workforce members, their families, or YES Health and safety Significant environmental impacts of transporting products and other Environmental community members regarding serious diseases. EN29 goods and materials used for the organization’s operations, and YES management transporting members of the workforce. Health and safety topics covered in formal agreements with trade LA9 YES Health and safety unions. Overall Training and education Environmental EN30 Total environmental protection expenditures and investments by type. YES management Average hours of training per year per employee by gender, and by Training and talent LA10 YES employee category. management
Social: Labour Practices and Decent Work Programmes for skills management and lifelong learning that support Training and talent LA11 the continued employability of employees and assist them in YES Performance Reported Explanation management Indicator Description 2013 Location for omission managing career endings. Percentage of employees receiving regular performance and career Fair pay and performance Employment LA12 YES development reviews, by gender. recognition Total workforce by employment type, employment contract, and LA1 YES Staff region, broken down by gender. Diversity and equal opportunity Total number and rate of new employee hires and employee turnover LA2 YES Staff by age group, gender, and region. Composition of governance bodies and breakdown of employees per LA13 employee category according to gender, age group, minority group YES Management of diversity Benefits provided to full-time employees that are not provided to Working environment and membership, and other indicators of diversity. LA3 YES temporary or part-time employees, by major operations. commitment Equal remuneration for women and men Maternity leave Ratio of basic salary and remuneration of women to men by employee procedures LA14 YES Management of diversity always include category, by significant locations of operation. automatic reincorporation, later departure from the company being LA15 Return to work and retention rates after parental leave, by gender. NO Not applicable vountary on the part of the employee, without the need to communicate the cause to the company
Labor/management relations Percentage of employees covered by collective bargaining Freedom of association LA4 YES agreements. and social dialogue
Minimum notice period(s) regarding significant operational changes, Freedom of association LA5 YES including whether it is specified in collective agreements. and social dialogue
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Social: Human Rights Performance Reported Explanation Performance Reported Explanation Indicator Description 2013 Location for omission Indicator Description 2013 Location for omission Security practices Investment and procurement practices We include Percentage and total number of significant investment agreements Percentage of security personnel trained in the organization’s policies percent trained Sustainability in the supply HR1 and contracts that include clauses incorporating human rights YES HR8 or procedures concerning aspects of human rights that are relevant to NO in Business chain concerns, or that have undergone human rights screening. operations. Principles over total workforce Percentage of significant suppliers, contractors and other business Sustainability in the supply HR2 partners that have undergone human rights screening, and actions YES Indigenous rights chain taken. Total number of incidents of violations involving rights of indigenous Sustainability in the supply HR9 YES Total hours of employee training on policies and procedures people and actions taken. chain HR3 concerning aspects of human rights that are relevant to operations, YES Ethics and compliance including the percentage of employees trained. Assessment Percentage and total number of operations that have been subject to Sustainability in the supply Non-discrimination HR10 YES human rights reviews and/or impact assessments. chain Total number of incidents of discrimination and corrective actions HR4 YES Ethics and compliance taken. Remediation Number of grievances related to human rights filed, addressed and Freedom of association and collective bargaining HR11 YES Ethics and compliance resolved through formal grievance mechanisms. Operations and significant suppliers identified in which the right to HR5 exercise freedom of association and collective bargaining may be YES Human Rights violated or at significant risk, and actions taken to support these rights.
Child labour Operations and significant suppliers identified as having significant risk HR6 for incidents of child labour, and measures taken to contribute to the YES Human Rights effective abolition of child labour.
Forced and compulsory labour Operations and significant suppliers identified as having significant risk for incidents of forced or compulsory labour, and measures to HR7 YES Human Rights contribute to the elimination of all forms of forced or compulsory labour.
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Social: Society Social: Product Responsibility Performance Reported Explanation Performance Reported Explanation Indicator Description 2013 Location for omission Indicator Description 2013 Location for omission Local communities Customer health and safety Percentage of operations with implemented local community Social action at Telefónica Life cycle stages in which health and safety impacts of products and SO1 YES engagement, impact assessments, and development programmes. and Volunteers PR1 services are assessed for improvement, and percentage of significant YES Electromagnetic field products and services categories subject to such procedures. Operations with significant potential or actual negative impacts on Environmental SO9 YES local communities. management Total number of incidents of non-compliance with regulations and PR2 voluntary codes concerning health and safety impacts of products and YES Ethics and compliance Prevention and mitigation measures implemented in operations with Environmental SO10 YES services during their life cycle, by type of outcomes. significant potential or actual negative impacts on local communities. management Product and service labelling Corruption Type of product and service information required by procedures, Percentage and total number of business units analyzed for risks SO2 YES Ethics and compliance PR3 and percentage of significant products and services subject to such YES Responsible management related to corruption. information requirements. Percentage of employees trained in organization's anti-corruption SO3 YES Ethics and compliance Total number of incidents of non-compliance with regulations and policies and procedures. PR4 voluntary codes concerning product and service information and NO labeling, by type of outcomes. SO4 Actions taken in response to incidents of corruption. YES Ethics and compliance Practices related to customer satisfaction, including results of surveys Public policy PR5 YES Responsible management measuring customer satisfaction. Public policy positions and participation in public policy development Materiality and SO5 YES and lobbying. stakeholder engagement Marketing communications Programmes for adherence to laws, standards, and voluntary Total value of financial and in-kind contributions to political parties, SO6 YES Ethics and compliance PR6 codes related to marketing communications, including advertising, YES Responsible management politicians, and related institutions by country. promotion, and sponsorship. Anti-competitive behavior Total number of incidents of non-compliance with regulations and Total number of legal actions for anti-competitive behaviour, anti-trust, PR7 voluntary codes concerning marketing communications, including NO SO7 YES Ethics and compliance and monopoly practices and their outcomes. advertising, promotion, and sponsorship by type of outcomes.
Compliance Customer privacy Monetary value of significant fines and total number of non-monetary Total number of substantiated complaints regarding breaches of Privacy: an open and SO8 YES Financial report PR8 YES sanctions for non-compliance with laws and regulations. customer privacy and losses of customer data. secure Internet for all
Compliance Monetary value of significant fines for non-compliance with laws and PR9 YES Financial report regulations concerning the provision and use of products and services.
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GRI references G4_
General Standard Disclosures Contained in Sustainability Contained in Identified material aspects and boundaries Section report Sustainability Strategy and analysis Section report 18 How report content was defined. Principles for the 2013 Sustainability Report YES 1 Statement from the most senior decision-maker of the organization. Letter from the Chairman YES 19 List of material aspects. Materiality: focus on the key issues YES Description of key impacts, risks, and opportunities. Corporate Responsibility and Sustainability as YES 2 20 Aspect boundary within the organization. Report boundary and structure YES part of the Telefónica vision 21 Aspect boundary outside the organization. Organizational profile 22 Restatements. Report boundary and structure YES 3 Name of the organization. Principles for the 2013 Sustainability Report YES 23 Significant changes in Scope or Boundary. Report boundary and structure YES 4 Primary brands, products, and/or services. Principles for the 2013 Sustainability Report YES Stakeholder engagement 5 Location of organization's headquarters. Principles for the 2013 Sustainability Report YES 24 List of stakeholders. Stakeholder engagement YES Number of countries where the organization operates, and names of Principles for the 2013 Sustainability Report YES 6 countries with either major operations or that are specifically relevant to 25 Basis of identification for stakeholders. Stakeholder engagement YES the sustainability issues covered in the report. 26 Approach to stakeholder engagement. Stakeholder engagement YES 7 Nature of ownership and legal form. Principles for the 2013 Sustainability Report YES 27 Key topics and concerns raised by stakeholders. Stakeholder engagement YES Markets served (including geographic breakdown, sectors served, and Integrated Report 8 types of customers/beneficiaries). Report profile 28 Reporting period. Principles for the 2013 Sustainability Report YES 9 Scale of the reporting organization. Telefónica indicators YES 29 Date of most recent previous report. Principles for the 2013 Sustainability Report YES 10 Size and composition of workforce. Staff YES 30 Reporting cycle. Principles for the 2013 Sustainability Report YES 11 Percentage of employees covered by collective bargaining agreements. Freedom of association and social dialogue YES 31 Contact point. Principles for the 2013 Sustainability Report YES 12 Organization's supply chain. Sustainability in the supply chain YES 32 GRI 'in accordance' option. GRI references YES 13 Significant organizational changes during the reporting period. Report boundary and structure YES 33 External assurance. Review and external validation of the Report YES 14 Precautionary approach. Environmental management in Telefónica YES Externally developed economic, environmental, and social charters, Stakeholder engagement YES 15 principles, or other initiatives to which the organization subscribes or endorses. Memberships in associations (such as industry associations) and/ Stakeholder engagement YES or national/international advocacy organizations in which the 16 organization: * Has positions in governance bodies; * Participates in projects or committees; * Provides substantive funding beyond routine membership dues; or * Views membership as strategic.
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Contained in Contained in Sustainability Sustainability Governance Section report Governance Section report Governance structure of organization. Annual Corporate Governance and YES Ratio of the annual total compensation for the organization’s highest- 34 Compensation report 54 paid individual in each country of significant operations to the median annual total compensation for all employees. Process for delegating authority for economic, environmental and social Corporate Responsibility and Sustainability YES 35 topics from the highest governance body to senior executives and other Structure in Telefónica, S.A. Ratio of percentage increase in annual total compensation for the organization’s highest-paid individual in each country of significant employees. 55 operations to the median percentage increase in annual total Executive-level position or positions with responsibility for economic, Corporate Responsibility and Sustainability YES 36 compensation for all employees. environmental and social topics. Structure in Telefónica, S.A. Ethics and integrity Processes for consultation between stakeholders and the highest Corporate Responsibility and Sustainability YES 37 governance body on economic, environmental and social topics. Structure in Telefónica, S.A. 56 Organization's values, codes of conduct and codes of ethics. Ethics and compliance YES Composition of the highest governance body and its committees. Annual Corporate Governance and YES Internal and external mechanisms for seeking advice on ethical and Ethics and compliance YES 38 Compensation report 57 lawful behaviour, and matters related to organizational integrity, such as helplines or advice lines. Report whether the chair of the highest governance body is also an Annual Corporate Governance and YES 39 executive officer. Compensation report Internal and external mechanisms for reporting concerns about Ethics and compliance YES 58 unethical or unlawful behaviour. Nomination and selection processes for the highest governance body Annual Corporate Governance and YES 40 and its committees, and the criteria used for nominating and selecting Compensation report highest governance body members. Processes for the highest governance body to ensure conflicts of Annual Corporate Governance and YES 41 interest are avoided and managed. Compensation report Specific standard disclosures Highest governance body’s and senior executives’ roles in the Corporate Responsibility and Sustainability YES Contained in development, approval, and updating of the organization’s purpose, Structure in Telefónica, S.A. Sustainability 42 value or mission statements, strategies, policies, and goals related to Economic dimension Section report economic, environmental and social impacts. DMA Disclosures on economic management approach. Corporate responsibility and YES Measures taken to develop and enhance the highest governance body’s Sustainability as part of the 43 collective knowledge of economic, environmental and social topics. Telefónica vision Processes for evaluation of the highest governance body’s performance Economic EC1 Direct economic value generated and distributed. Driver of progress YES 44 with respect to governance of economic, environmental and social performance Financial implications and other risks and opportunities for topics. EC2 the organization’s activities due to climate change. Highest governance body’s role in the identification and management of Corporate Responsibility and Sustainability YES 45 Coverage of the organization’s defined benefit plan Driver of progress YES economic, environmental and social impacts, risks, and opportunities. Structure in Telefónica, S.A. EC3 obligations. Highest governance body’s role in reviewing the effectiveness of the Corporate Responsibility and Sustainability YES EC4 Financial assistance received from government. Financial report YES 46 organization’s risk management processes for economic, environmental Structure in Telefónica, S.A. and social topics. Market Presence Ratios of standard entry-level wage by gender compared to Fair pay and performance YES EC5 local minimum wage at significant locations of operation. recognition Frequency of the highest governance body’s review of economic, Corporate Responsibility and Sustainability YES 47 environmental and social impacts, risks, and opportunities. Structure in Telefónica, S.A. Proportion of senior management hired from the local EC6 community. Highest committee or position that formally reviews and approves the Letter from the Chairman YES 48 organization’s sustainability report and ensures that all material aspects Indirect Economic Development and impact of infrastructure investments and EC7 are covered. Impacts services supported. Process for communicating critical concerns to the highest governance Significant indirect economic impacts, including the extent of 49 EC8 body. impacts. Nature and total number of critical concerns that were communicated Procurement Proportion of spending on local suppliers at significant Driver of progress YES EC9 50 to the highest governance body and the mechanism(s) used to address Practices locations of operation. and resolve them. Environmental dimension Remuneration policies for the highest governance body and senior Annual Corporate Governance and YES 51 executives. Compensation Report DMA Disclosures on environmental management approach. Corporate responsibility and YES Sustainability as part of the Process for determining remuneration. Report whether remuneration Telefónica vision 52 consultants are involved in determining remuneration and whether they Materials Materials used by weight or volume. Environmental management in are independent of management. EN1 Telefónica How stakeholders’ views are sought and taken into account regarding 53 Percentage of materials used that are recycled input YES remuneration. EN2 materials.
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Contained in Transport Significant environmental impacts of transporting products YES Sustainability EN30 and other goods and materials for the organization’s opera- Energy and climate change Environmental dimension Section report tions, and transporting members of the workforce. Overall Total environmental protection expenditures and invest- Environmental management in Energy EN3 Energy consumption within the organization. Energy and climate change YES EN31 YES ments by type. Telefónica EN4 Energy consumption outside the organization. Energy and climate change YES Supplier Percentage of new suppliers that were screened using envi- Environmental management in EN32 YES EN5 Energy intensity. Energy and climate change YES Environmental ronmental criteria. Telefónica Assessment Significant actual and potential negative environmental Environmental management in EN6 Reduction of energy consumption. Energy and climate change YES EN33 YES impacts in the supply chain and actions taken. Telefónica EN7 Reductions in energy requirements of products and services. YES Environmental Number of grievances about environmental impacts filed, Environmental management in Water Total water withdrawal by source. Environmental management in YES Grievance EN34 YES EN8 addressed, and resolved. Telefónica Telefónica Mechanisms Contained in EN9 Water sources significantly affected by withdrawal of water. YES Sustainability EN10 Percentage and total volume of water recycled and reused. YES Social dimension Section report Biodiversity Operational sites owned, leased, managed in, or adjacent to, Environmental management in YES Corporate responsibility and EN11 protected areas and areas of high biodiversity value outside Telefónica DMA Disclosures on social management approach. Sustainability as part of the YES protected areas. Telefónica vision Labour practices Total number and rates of new employee hires and employee Description of significant impacts of activities, products, and Environmental management in YES LA1 and decent work turnover by age group, gender and region. EN12 services on biodiversity in protected areas and areas of high Telefónica biodiversity value outside protected areas. Benefits provided to full-time employees that are not provided LA2 to temporary or part-time employees, by significant locations Habitats protected or restored. Environmental management in YES EN13 of operation. Telefónica Return to work and retention rates after parental leave, by LA3 Total number of IUCN red list species and national gender. EN14 conservation list species with habitats in areas affected by Minimum notice periods regarding operational changes, operations, by level of extinction risk. LA4 including whether these are specified in collective agreements. Emissions En15 Direct greenhouse gas (ghg) emissions (scope 1). Energy and climate change YES % of total workforce represented in formal joint management– En16 Energy indirect greenhouse gas (ghg) emissions (scope 2). Energy and climate change YES LA5 worker health and safety committees that help monitor and Health and safety YES advise on occupational health and safety programmes. En17 Other indirect greenhouse gas (ghg) emissions (scope 3). Energy and climate change YES Type of injury and rates of injury, occupational diseases, lost En18 Greenhouse gas (ghg) emissions intensity. Energy and climate change YES LA6 days, and absenteeism, and total number of work-related Health and safety YES fatalities, by region and by gender. En19 Reduction of greenhouse gas (ghg) emissions. Energy and climate change YES Workers with high incidence or high risk of diseases related to LA7 En20 Emissions of ozone-depleting substances (ODS). their occupation. Health and safety topics covered in formal agreements with En21 NO , SO , and other significant air emissions. LA8 Health and safety YES x x trade unions. Effluents and Environmental management in EN22 Total water discharge by quality and destination. Average hours of training per year per employee by gender, and Waste Telefónica LA9 by employee category. Environmental management in EN23 Total weight of waste by type and disposal method. YES Programmes for skills management and lifelong learning that Telefónica Training and talent LA10 support the continued employability of employees and assist YES management Environmental management in them in managing career endings. EN24 Total number and volume of significant spills. YES Telefónica Percentage of employees receiving regular performance and Fair pay and performance Weight of transported, imported, exported, or treated waste Environmental management in YES LA11 career development reviews, by gender and by employee YES EN25 recognition deemed hazardous under the terms of the Basel Convention. Telefónica category. Size, protected status, and biodiversity value of water bodies Composition of governance bodies and breakdown of emplo- EN26 and related habitats significantly affected. LA12 yees per employee category according to gender, age group, Management of diversity YES Products and Extent of impact mitigation of environmental impacts of minority group membership, and other indicators of diversity. EN27 Green ICT services YES Services products and services. Ratio of basic salary and remuneration of women to men by LA13 Management of diversity YES Percentage of products sold and their packaging materials employee category, by significant locations of operation. EN28 Green ICT services YES that are reclaimed by category. Percentage of new suppliers that were screened using labour LA14 YES Compliance Monetary value of significant fines and total number of non- practices criteria. Environmental management in YES EN29 monetary sanctions for non-compliance with environmental Significant actual and potential negative impacts for labour Sustainability in the supply Telefónica LA15 YES laws and regulations. practices in the supply chain and actions taken. chain Number of grievances about labour practices filed, addressed, Sustainability in the supply LA16 and resolved through formal grievance mechanisms. chain
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Contained in Contained in Sustainability Sustainability Social dimension Section report Social dimension Section report Human rights Total number and percentage of significant investment Society Percentage of operations with implemented local Sustainability in the supply HR1 agreements and contracts that include human rights clauses YES SO1 community engagement, impact assessments, and Social action at Telefónica YES chain or underwent human rights screening. development programmes. Total hours of employee training on human rights policies Operations with significant actual and potential negative SO2 HR2 or procedures concerning aspects of human rights that are Ethics and compliance YES impacts on local communities. relevant to operations. Total number and percentage of operations assessed for SO3 Human rights YES Total number of incidents of discrimination and corrective risks related to corruption and the significant risks identified. HR3 Ethics and compliance YES actions taken. Communication and training on anti-corruption policies and SO4 Ethics and compliance YES Operations and suppliers identified in which the right to procedures. exercise freedom of association and collective bargaining Sustainability in the supply HR4 YES SO5 Confirmed incidents of corruption and actions taken. Ethics and compliance YES may be violated or at significant risk, and measures taken to chain Total value of political contributions by country and support these rights. SO6 Ethics and compliance YES recipient/beneficiary. Operations and suppliers identified as having significant Sustainability in the supply HR5 risk for incidents of child labour, and measures taken to YES Total number of legal actions for anti-competitive behavior, chain SO7 Financial report contribute to the effective abolition of child labour. anti-trust, and monopoly practices and their outcomes. Operations and suppliers identified as having significant risk Monetary value of significant fines and total number of for incidents of forced or compulsory labour, and measures Sustainability in the supply SO8 non-monetary sanctions for non-compliance with laws and Financial report HR6 YES to contribute to the elimination of all forms of forced or chain regulations. compulsory labour. Percentage of new suppliers that were screened using Sustainability in the supply SO9 YES Percentage of security personnel trained in the criteria for impacts on society. chain HR7 organization’s human rights policies or procedures that are Significant actual and potential negative impacts on society Sustainability in the supply SO10 YES relevant to operations. in the supply chain and actions taken. chain Total number of incidents of violations involving rights of HR8 Number of grievances about impacts on society filed, indigenous peoples and actions taken. SO11 addressed, and resolved through formal grievance Total number and percentage of operations that have been mechanisms. HR9 Human rights YES subject to human rights reviews or impact assessments. Product Percentage of significant product and service categories Percentage of new suppliers that were screened using Sustainability in the supply responsibility PR1 for which health and safety impacts are assessed for HR10 YES human rights criteria. chain improvement. Significant actual and potential negative human rights Sustainability in the supply Total number of incidents of non-compliance with HR11 YES impacts in the supply chain and actions taken. chain PR2 regulations and voluntary codes concerning the health and safety impacts of products and services. Number of grievances about human rights impacts HR12 filed, addressed, and resolved through formal grievance Ethics and compliance YES Type of product and service information required by mechanisms. the organization’s procedures for product and service PR3 information and labelling, and percentage of significant product and service categories subject to such information requirements. Total number of incidents of non-compliance with PR4 regulations and voluntary codes concerning product and service information and labelling, by type of outcomes. PR5 Results of surveys measuring customer satisfaction. Customer satisfaction YES PR6 Sale of banned or disputed products. Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing PR7 communications, including advertising, promotion, and sponsorship, by type of outcomes. Total number of substantiated complaints regarding Privacy: an open and secure PR8 YES breaches of customer privacy and losses of customer data. Internet for all Monetary value of significant fines for non-compliance with PR9 laws and regulations concerning the provision and use of products and services.
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Compliance with Global Compact’_
Human Rights Environment
Principle 1 Business should support and respect Management of Human Rights and Children’s Rights Principle 7 Businesses should support a precautionary Environmental Management the protection of internationally Ethics and Compliance approach to environmental challenges proclaimed human rights
Principle 8 Businesses should undertake initiatives to Global Environmental Leadership, Environmental promote greater environmental responsibility Management, Energy and Climate Change Principle 2 Businesses should make sure they are not Management of Human Rights and Children’s Rights complicit in human rights abuses
Principle 9 Businesses should encourage the development Green Services and Smart Cities and diffusion of environmentally friendly technologies
Labour
Principle 3 Businesses should uphold the freedom of Freedom of Association and Social Dialogue association and the effective recognition of the Anticorruption right to collective bargaining Principle Businesses should work against corruption in all its Ethics and Compliance 10 Principle 4 Businesses should uphold the elimination of all Working Environment, Work-Life Balance and forms, including extortion and bribery forms of forced and compulsory labour Commitment Fair Remuneration and Recognition at Work Health, Safety and Welfare at Work
Principle 5 Businesses should support the effective abolition Social Action of child labour Sustainability in the Supply Chain Management of Human Rights and Children’s Rights
Principle 6 Businesses should uphold the elimination of Management of Diversity discrimination in respect of employment and occupation
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Review and external validation of the Report_
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Glossary of terms_
Term Definition Term Definition
A E
AA1000 Set of accountability processes for verification (AA1000AS) and engagement (AA1000SES). E2E Overview of the process, from beginning to end.
Calculation of the days of absenteeism, expressed as a percentage of the number of days of work anticipated for the entire work- Eco-efficiency Creation of more goods and services using fewer resources and generating less waste. Absenteeism rate (AR) force in the period covered in the report. ECTA European Competitive Telecommunications Association. Average Revenue Per User, which is the mean or average revenue per user which is achieved, over a given period, by a service com- pany with a wide user base. It is calculated by dividing the total income earned in the period by the total number of active users of The use in the health sector of digital information transmitted, stored or collected electronically in order to support healthcare both ARPU the company. It is a unit of measurement mainly used by telecommunication companies. e-Health locally and remotely.
Association for people with spinal cord injuries and severe physical disabilities in Granada. ASPAYM is dedicated to the care of people EMF ElectroMagnetic Fields. with spinal cord injuries and other severe disabilities. It is involved in developing and managing facilities and services for members of ASPAYM Granada the association, and all those areas that can improve their social integration (http://www.medulardigital.com/). European Telecommunications Network Operators Association, the main association of communications network operators in ETNO Europe. B Annual initiative that the European Union Agency for Network and Information Security (ENISA) at the European Commission B2B Business-to-Business. promotes in October in the EU and internationally. Under the slogan “Online security requires your participation”, it aims to promote European Cybersecurity cybersecurity awareness among citizens, change their perception of cyberthreats and provide updated information on security B2C Business-to-Consumer. Month through education, best practices and security competitions.
C European Voice Created by The Economist Group, this is the leading source of news and analysis on key EU policies, laws and institutions.
Carbon Disclosure Group. Index composed of two indices showing, to 551 institutional investors with assets totalling $71 trillion, the F CDP transparency and performance of companies on issues of climate change. Confederación Española de Organizaciones en favor de las Personas con Discapacidad Intelectual o del Desarrollo (Spanish Confed- Centro Nacional de Tecnologías de la Accesibilidad (National Centre for Accessibility Technology). CENTAC is a centre dedicated to eration of Organisations for Persons with Mental or Developmental Retardation). FEAPS works to support and provide opportunities promoting the development of accessibility technologies in business, industrial and service areas in order to facilitate access to these for people with intellectual disabilities and their families to develop their quality of life project and to promote their inclusion as full CENTAC and improve the quality of life of older people and people with disabilities, and their families (www.centac.es). FEAPS citizens in a fair and caring society (www.feaps.org) .
Comité Español de Representantes de Personas con Discapacidad (Spanish Committee of Representatives of People with Dis- Confederación Española de Familias de Personas Sordas (Spanish Confederation of Families of Deaf People). FIAPAS works to repre- abilities). CERMI is the platform for representation, defence and action for Spanish citizens with disabilities – more than 3.8 million FIAPAS sent and defend the rights and overall interests of people with hearing impairments and their families (www.fiapas.es). men and women, and their families – who, being fully aware of their situation as a disadvantaged social group, have decided to join together, through organisations of which they are members, to progress in recognition of their rights and achieve full citizenship with G CERMI the same rights and opportunities as the other members of society (www.cermi.es). Gases whose presence in the Cloud Processing and mass storage of data on servers that host user information. atmosphere contribute to the greenhouse effect Internet-based computer system using remote data centres to manage information services and applications. Cloud computing allows consumers and businesses to manage files and use applications without having to install them via any computer with online Global e-Sustainability Initiative. Initiative sponsored by service providers of information and communication technologies, which Cloud Computing access. aims to encourage debate on the topic of sustainability, inform the public about the sustainable activities of its members and pro- GeSI mote information and communication technologies that can encourage Sustainable Development. Confederación Estatal de Personas Sordas (National Confederation of Deaf People) and its Foundation. The CNSE Foundation and its work in defending the rights of all deaf people, with the added value of sign language, while empowering and enabling them, as well GHG GreenHouse Gas. as strengthening their associations and promoting social change to ensure effective inclusion. CNSE and CNSE Foundation (http://www.cnse.es/ and http://www.fundacioncnse.org/). GreenHouse Gas Protocol. GHG Protocol This is the international tool used to calculate and communicate emissions inventories. Committee of Sponsoring Organizations of the Treadway Commission. This is a private voluntary organisation dedicated to guiding, on a global basis, executive management and governance entities toward the establishment of more efficient business operations Voluntary UN initiative which aims to promote social dialogue for the creation of a global corporate citizenship to reconcile the COSO on ethical issues, issues of internal control and risk, fraud and financial reporting. interests of companies with the values and demands of civil society, UN projects, trade unions and non-governmental organisations (NGOs), in which the companies undertake to align their operations and strategies with ten universally accepted principles in four D Global Compact thematic areas, namely human rights, labour, environment and anticorruption.
EU REGULATION No. 611/2013 OF THE COMMISSION of 24 June 2013 on the measures applicable to the notification of GRI Global Reporting Initiative. Organisation and set of instructions on corporate sustainability reporting. Data Protection Regulation of personal data breaches under Directive 2002/58/EC of the European Parliament and of the Council on privacy and electronic the European Union communications. Association of mobile operators and related companies devoted to supporting the standardising, deployment and promotion of the GSMA GSM mobile phone system. Processes to democratise access to information technologies and communication, so as to allow the insertion of everyone in the Digital inclusion information society.
Dow Jones Sustainability Index. Set up in 1999, this is a family of stock market indexes which evaluate the sustainability perfor- mance of the 2,500 largest companies listed on the Dow Jones Index in the US and is a global benchmark for investors interested in DJSI the long-term behaviour of the companies they invest in.
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Term Definition Term Definition
I S
ICT Information and Communication Technology. SDC Servicio de Defensa del Cliente en España (Spanish acronym for the Customer Protection Service in Spain).
Number of accidents in relation to the total time worked by the total workforce in the period covered in the report. Socially Responsible Investment. This involves the incorporation of ethical, social and environmental criteria in the process of invest- Incidence rate (IR) IR = (total no. of accidents/total hours worked) x 200,000. SRI ment decision making, in a way that is complementary to the traditional financial criteria of liquidity, profitability and risk.
ISO 14001 International standard for the development and implementation of Environmental Management Systems. T
International Telecommunication Union, which is the United Nations agency responsible for information and communication tech- A company registered in Munich, Germany, since 2010. This is the global sourcing unit for all Telefónica Group companies worldwide. nology. The ITU coordinates the shared global use of the radio spectrum, promotes international cooperation in the use of satellites Telefónica Global Services TGS works with representatives from all of Telefónica’s operating businesses worldwide and centrally manages negotiations with ITU and promotes infrastructure standards that encourage development. (TGS) suppliers in the various global categories.
K Time to Market Time taken by a product from the moment it is conceived until it is placed on sale.
KPIs Key Performance Indicators. U
L Underlying Growth Figures reported, excluding exceptional impacts and spectrum acquisition.
London Benchmarking Group, which provides companies with a model to classify and manage their initiatives in the community. The United Nations High Commissioner for Refugees (UNHCR) is the United Nations agency responsible for protecting refugees and LBG This is a methodology for the measurement, management and communication of corporate social action. people displaced by conflict or persecution and for promoting lasting solutions to their situation through voluntary resettlement in UNHCR their country of origin or in the host country. This is the impact of occupational accidents and diseases and as such reflects the number of days off work of the employees con- cerned. It is expressed by comparing the total number of days lost to the total planned working hours for the entire workforce during United Nations Children’s Fund. UNICEF carries out its work in 191 countries through country programmes and National Committees. Lost day rate (LDR) the period covered by the report. UNICEF was established by the United Nations on 11 December 1946 to respond to the emergency needs of children in Europe and China during the post-war period. The full name was United Nations International Children’s Emergency Fund. In 1950, its mandate M was expanded to address the long-term needs of children and women in developing countries worldwide. UNICEF was integrated permanently into the United Nations in 1953; at the time, its name was shortened and renamed the United Nations Children’s Fund. Machine-to-Machine, a generic term that refers to the ability to exchange data between two remote machines, so that through this UNICEF However, it maintained its original acronym, UNICEF. M2M exchange it is possible to control and monitor automatically processes in which machines are involved. W Processes of qualitative and quantitative analysis and analysis of debates to determine whether a matter is material, i.e. whether it reflects the significant economic, environmental and social impacts of the organisation, as well as those aspects that significantly WEEE (e-waste) Waste Electrical and Electronic Equipment. Materiality influence the assessments and decisions of stakeholders.
Declaration signed in 2000 by 189 heads of state and government from around the world during the Millennium Summit of the Millennium Development United Nations that aims by 2015 to end the poverty in which more than a billion people worldwide are living. To this end, 8 human Goals development goals were established.
N
NGA Next-Generation Access, it describes the improved benefits to telecommunications access by replacing copper with fibre optics.
O
Occupational disease rate Relationship between the number of cases of work-related illness and the total time worked by the entire workforce throughout the (ODR) period covered by the report.
Organization for Economic Cooperation and Development. Intergovernmental organisation whose primary mission is to provide as- OECD sistance to member countries to achieve economic growth based on sustainable development.
ODMs Original Design Manufacturers.
Organizacion Nacional de Ciegos Españoles (Spanish Organisation for Blind People) and its foundation. ONCE and its foundation are made up of a set of institutions whose aim is to achieve the full autonomy and social integration of people with blindness and visual impairment, and committed through solidarity to groups of people with other disabilities, through training, employment and actions ONCE and Fundación ONCE to promote accessibility (www.once.es and www.fundaciononce.es).
In financial terms, constant average exchange rates for January-December 2010 are assumed and the impact of changes in the Organic Growth scope of consolidation and the impact of hyperinflation are excluded.
Over-the-Top and commonly known as a value-added service. OTT refers to the service that is used on the data network by your OTT service provider.
232 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 233 Telefónica Corporate Sustainability report 2013
Best Practices summary_
1. Stakeholder engagement Page 9. Campus Party Page
Millennium Generation 41 HackForGood 169
2. Ethics and compliance 10. Environmental management
Training at Telefónica Vivo 47 Iquitos: responsible network deployment in Peru 178
DJSI ‘Best in class’ in code of conduct and anticorruption policies 47 Beacon Project: shared infrastructure in the United Kingdom 178
Less paper at Telefónica Germany 179 3. Customer satisfaction The green ambassador recycles Project 180
Assessment of the AI (Internauts’ Association) 49 Telefónica District Plantation volunteers 181
4. Labour practices 11. Energy and climate change
Staff (Be More_ Experience; Be More_TV and Be More_ program) 53 Data Center inauguration – Alcalá de Henares (Madrid) 184 Training and talent management (TEDx Telefonica São Paulo and Smart Week) 63
Diversity (Diversity Day at Telefónica Europa) 81 12. Green ICT services
Expansion of the Vivo Clima service of Telefónica in Brazil 189 5. Sustainability in the supply chain Smart meters in the UK 189
Aliados 95 Green Corners (Esquinas Verdes) in Venezuela 190
Green shops in Germany 190 6. Human rights Commercial eco-efficiency in Brazil 190 Telefónica Colombia (Training Course on Human Rights; Protocol on Relationship with Communities; Colombian Guidelines; Business for Peace) 109 Devices without charger in the United Kingdom: Charger Out of the Box 191
7. Education 13. Smart sustainable cities WeClass education platform 139 Fireware platform and Smart Santander 192-193 8. e-Health
Vivo Mais Saudável online platform 140
234 Telefónica | Annual Report 2013 Telefónica | Annual Report 2013 235 Thanks_
This Report has been produced with the collaboration of many people, among whom we would especially like to thank: Fátima Araluce, Iñigo Audibert, Gabriela Baracat, Juliana Belmont, Félix de Blas, Magdalena Brier, Sergio Brihuega, Ralf Buechsenchuss, Mariana Caballero, María José Cantarino, Catalina Chávez, Simon Davis, Stephanie Denamps, Elizabeth Diácono, Gabriel de Diego, Chavela Dragoevich, Blanca Drake, Maximiliano Echeverría, Yanira Espinosa, Leire Fernández, Nataní Fernández, Virginia Fernández, Sofía Fernández de Mesa, Mónica Fernández Rivas, José Luis Fernández Rosell, Oscar Floreani, Carmen García, Fabián García, María García-Legaz, Piedad García-Manso, David Gómez, Joaquín Gómez Cevedio, Ignacio González- Blanch, Noemi Grandío, María del Val Gutierrez, Judith Iglesias, Belén Izquierdo, Marisol Izquierdo, Yiria Jaramillo, Dorothee Jarchow, Jill Johnson, Gabriela López, Eva Lopez, Carlos López Blanco, Raquel Lucas, Ángel Martín, Francesc Martínez, Francis Masek, Susana Mingo, Almudena Moreno, Javier Moreno, Ezequiel Nieto, Ana de la Peña, José María Pestaña, Eduardo Puig de la Bellacasa, Leticia de Rato, María Jesús Rodríguez, Pablo Rodríguez Canfranc, Estefanía Sampedro, Javier Santiso, Ana Segurado, Lourdes Tejedor, Elena Telefónica, S.A. Tirado, Marta Vegas, Alicia Velascoin, Luis Ignacio de Vicente and Emma 2013 Corporate Sustainability report Young. This report is also available online at: Authors http://informeanual2013.telefonica.com Alberto Andreu, Silvia Guzmán, Emilio Vera, Nuria Pizarro, Daniela Torres and Susana Gallego. Shareholders can request copies of these reports from the Shareholder Office, via freephone (900 111 004 in Spain) or email, at: [email protected] We are interested in any opinions and comments, so please feel free to contact us at: Available on many platforms and operational systems as of June 2014. • [email protected] The legally required information is available to shareholders and the general public. • www.rcysostenibilidad.telefonica.com/es
• www.rcysostenibilidad.telefonica.com/blogs • www.youtube.com/rcysostenibilidad Published by: • www.twitter.com/rcysost Telefónica, S.A. corporate and public affairs department. • www.facebook.com/rcysostenibilidad
Design and layout: Or, if you prefer, write to us at our postal address: MRM Worldwide Spain, S.A. Reputación y Sostenibilidad Corporativas Telefónica, S.A. Distrito Telefónica. Ronda de la Comunicación S/N Date of publication: Edificio Oeste 2. Planta 1. 28050 Madrid. June 2014.