[the financial] For the second year in a row, Telefónica is one of the leading companies in the global telecommunications sector based on sustainability criteria, once more heading the Dow Jones Sustainability Index (DJSI).
In its yearly review, Sustainable Asset Management (SAM), the rating agency that evaluates companies’ sustainability management by taking account of economic, environmental and social aspects, awarded the Group 84 points out of 100, which is 26 percentage points more than the sector average.
According to DJSI, “corporate sustainability is a business approach that seeks to create long-term shareholder value by seizing the opportunities, and through effective management of the risks, inherent in economic, environmental and social development”. And that is how Telefónica has defined its sustainability and corporate responsibility strategy.
“For the Company, corporate responsibility contributes to the creation of values, because it boosts trust in the business. And let us not forget that trust and transparency give us a premium price in the markets and reduce our risk premium. And nowadays that is crucial, and it enables us to build sustainable relationships with stakeholder groups. This has led us to develop a corporate responsibility strategy based on three drives: effective risk management; managing opportunities and stakeholders engagement”, explains Luis Abril, General Technical Secretary for the Chairman’s Office.
The Company has formed part of this index, one of the world’s most demanding, for the last seven years, and sees it as a guide for keeping track of its progress and identifying any points for improvement.
“This top ranking is the result of long years of work and a clear commitment to corporate responsibility and sustainability, as illustrated by the setting up as long ago as 2002 of a Board Committee dedicated to fostering corporate reputation and responsibility, in which we were pioneers in Europe. Looking ahead, we are firmly committed to sustainability. In fact, I’m happy to say that it forms part of the Company’s strategic programme for the coming years, and that the cultural dimension of this programme seeks to inspire trust among stakeholder groups”, Abril goes on.
Similarly, Telefónica has been recognised as besting class in seven key aspects: risk and crisis management; suppliers; environmental policies; development of human resources; impact of telecommunications services; social action and stakeholders engagement.
In the economic dimension, Telefónica scored 83 points, representing 23 percentage points more than the sector average. This dimension takes into account aspects relating to the management of customer relations; privacy; risk management; corporate governance; action and anti-corruption principles and brand management. This year for the first time DJSI included innovation management, covering environmental and social innovation, the latter being an area on which Telefónica’s Innovation and Corporate Responsibility Divisions have already started work.
In this dimension we should highlight the effort made by Telefónica to ensure integrity by means of in-house regulations and employee training in Action Principles (more than 70,200 employees, 57% of the workforce, had received training on Telefónica’s code of ethics as at the end of the financial year); the improvement in its processes for maximising customer satisfaction; its brand strategy, in which the weight of the corporate and institutional role is vested in the Telefónica brand, while Movistar and O2 are brands encompassing the commercial offering in the various respective geographical regions; and the consolidation in all countries where the Telefónica Group operates of a single risk management model, which incorporates aspects relating to sustainability.
Under the heading of innovation, mention should be made of the recent creation in Telefónica of a unit designed to take full advantage of the company’s vertical strengths and accelerate its growth with digital services in areas such as e-health, financial services, machine to machine communications, cloud services (online services with remote storage and processes), security, applications and, lastly, video and content.
As regards the environment, the assessment awarded 73 points, 21 points above the average. This dimension takes account of environmental policy, eco-efficiency and environmental and climate change information. The main improvement in Telefónica this year, and where it achieved the highest score in the sector was in environmental management, thanks to its Global Environmental Management System and the new ISO 14001 certifications of the mobile business in Argentina, fixed line telephony in Peru and “District C”, the Company’s headquarters in Madrid, as a result of which the Group now has more than half its companies certified.
Apart from this, the Company has already achieved half its objective for 2015 – to reduce electricity consumption by 30% in the networks. It also continues to help other sectors to improve their energy efficiency, through building automation products and services, tele-presence, virtual hosting, etc.
Lastly, in the social dimension, Telefónica scored 90 points, the highest score in the sector and 32 points above the average, taking account of the assessment of labour indicators; performance in the development of human resources; talent retention; digital inclusion; impact of telecommunications services; social action; social information; stakeholders engagement, responsibility in the supply chain and, this year for the first time, health and safety at work. We note that the score obtained by Telefónica in this new section was 32 points more than the sector average.
In this dimension, a decisive contribution was made by the 84 initiatives aimed at reducing the digital divide, with an investment of more than €426 million in 2009 and more than seven million persons benefiting; the evaluation of 7,200 suppliers in 2009 to ensure a responsible supply chain that respects human rights and our action principles; and the programmes of Fundación Telefónica, particularly Proniño.
We should also point to the improvements in the development of human resources, with the highest score in the industry. Efforts made by Telefónica in this field involved an investment in training of €63 million in 2009. Another notable initiative for employees is the new Global Share Purchase Plan, aimed at recognising the commitment of its professionals and involving them more in the future of the company.
As regards stakeholders engagement, Telefónica is promoting close relations with its stakeholder groups as customers through the social networks, with a view to creating relations of trust. Another important action is the process of open and inclusive dialogue on the impact of ICTs on matters of public interest such as healthcare, education, productivity etc. and which has been translated into programmes like Catalonia 4.0 and Aragon 4.0.
The DJSI also highlights the company’s positive evaluation in the field of reporting: this year Telefónica has developed a new corporate responsibility reporting format with a view to constructing a uniform global framework for all companies and sectors.
Telefónica leads the DJSI in the global telecommunications sector for the second year running
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