Telefónica’s Climate Action Plan: Driving Digitalization and Sustainability

This model focuses on reducing Scope 1 and 2 emissions by transforming internal operations with the implementation adapted to the regulations and specific characteristics of each country: 

• Energy Efficiency Plan: Telefónica has implemented large-scale efficiency measures, including the modernization of network equipment, introduction of Power Saving Features (PSFs), and infrastructure upgrades. These actions have enabled a reduction of 8% in energy use, despite a 9.3x increase in network traffic since 2015.
• Renewable Energy Plan: The company expanded its use of renewable electricity through Power Purchase Agreements (PPAs), self-generation projects and renewable energy certificates. Their plan is a global one, adapted to the needs and regulation of each market. By 2024, 89% of electricity consumption was renewable, with the goal of reaching 100% globally by 2030.
• Emissions Reduction Initiatives: Telefónica replaced fossil fuels with cleaner alternatives, installed hybrid self-generation systems, and adopted lithium batteries to reduce emissions from stationary sources and its vehicle fleet.

Telefónica aims to increase the resilience of the company’s infrastructure to climaterelated effects, based on: 

• Business Continuity: Telefónica has a global crisis and business continuity system, along with an insurance programme designed to prevent, respond to and mitigate service disruption in the event of extreme weather events, such as floods, landslides, droughts or storms.
• Preventive strategy through renewable energy and energy efficiency: Aiming at making the company less vulnerable to climaterelated risks, energy efficiency reduces consumption and improves the resilience of infrastructures and renewable energies increase energy self-sufficiency and reduce exposure to price volatility

Telefónica targets the most carbon-intensive part of its footprint—its supply chain: 

• Supplier engagement: Through its Supplier Engagement Programme, Telefónica works with key suppliers (accounting for roughly 90% of its supply chain emissions) to improve their climate strategy and actions. Suppliers are classified into different maturity levels on the basis of CDP data, given tailored capacity-building and asked to commit to pledges (e.g. to set science-based targets) to move up to a higher maturity level next year. The programme efficiency is measured by supplier maturity improvement over years. Sector collaboration is key to amplifying the impact of these actions. Telefónica is part of the Joint Alliance for CSR (JAC) sector initiative, where 31 telecom operators share efforts to drive climate action in the supply chain as a sector. 
• Circular economy integration: Initiatives like the MAIA marketplace and APOLO/VICKY programs promote the reuse, refurbishment, and recycling of network equipment and materials—cutting down on virgin resource use and Scope 3 emissions.

Telefónica positions its digital services as tools for climate impact: 

• Eco Smart Solutions: The company offers B2B digital tools (Internet of Things, cloud, big data) that improve energy efficiency, water management, and emissions reduction. The Eco Smart seal identifies the environmental benefit of each solution.
• Sustainable Consumer Engagement: Initiatives such as Eco Rating for mobile devices and the sale of refurbished phones help guide customers toward more sustainable purchasing decisions and extend product life cycles. Beyond informing consumers about the environmental performance of mobile phones, Eco Rating also encourages manufacturers to adopt more sustainable practices. By providing comparative information across brands and models, it increases competitive pressure on manufacturers to improve handset design, thereby reducing environmental impact, fostering industry-wide alignment, and enhancing transparency

Telefónica ensures environmental and financial sustainability go hand in hand: 

• Sustainable finance instruments: The company leverages green bonds and sustainability-linked loans to fund climate-positive projects. By the end of 2024, the company achieved 37.4% financing linked to sustainability criteria. Since 2019, these projects have prevented over 1 million tonnes of CO2 e emissions.
• Internal Carbon Pricing: Telefónica uses a shadow carbon price to guide procurement toward lower-carbon technologies. This internal carbon price is implemented in purchasing decisions for equipment with electricity and/ or fuel consumption, as well as equipment containing refrigerant gases. By calculating the Total Cost of Ownership (TCO) where the cost of GHG emissions is also incorporated, procurement processes are guided towards more efficient equipment which avoids future GHG emissions. It is also developing an internal carbon fee that could support its neutralisation strategy.

This model integrates climate action into corporate governance and stakeholder engagement: 

• Strategic Governance: Climate responsibilities are distributed across the Board of Directors, the Sustainability and Regulation Committee, and operational leadership teams, ensuring alignment and oversight.
• Employee involvement: Staff receive climate training, and part of their variable compensation is tied to ESG performance, reinforcing ownership and awareness across the company.
• Transparency and advocacy: Telefónica maintains transparent reporting aligned with international frameworks (e.g., CDP, SBTi) and actively participates in climate policy advocacy. This includes leadership roles in the European Telecommunications Network Operators’ Association (ETNO) and GSMA working groups, and engaging in EU consultations to promote the inclusion of telecom networks in sustainable finance regulations (i.e., the EU Taxonomy for Sustainable Activities).