How Telefónica is Approaching Supply Chain Engagement

In the pursuit of global decarbonisation, the pivotal role of the private sector cannot be overstated. While companies have achieved significant reductions in their scope 1 and 2 emissions over the years, scope 3 emissions still represent a challenge for most of them. This is no different for Telefónica with scope 3 emissions representing 84.5 % of its total carbon footprint. Engagement with suppliers on carbon reduction is thus one of Telefónica’s key strategic focuses on the way to its net zero goal in 2040.

Telefónica employs a targeted approach to engage its large base of suppliers, categorising them into three categories to tailor the various initiatives to a supplier’s carbon intensity and maturity.

Priority 3

Telefónica mandates the acceptance of its Supply Chain Sustainability Policy from all its suppliers, which encompasses not only requirements on carbon emissions but also broader sustainability topics such as human rights. This contractual commitment is complemented by supplier assessments on sustainability in general and climate in particular via an external platform to identify carbon hot spots in the supply chain.

Priority 2

Approximately 200 suppliers, which represent almost 90% of Telefónica’s supply chain emissions, are selected to participate in its “Supplier Engagement Programme”. This initiative establishes a carbon maturity curve, categorising suppliers into five climate maturity levels based on concrete climate data provided by them through CDP. For each level, Telefónica identifies improvement areas, requesting supplier commitments to implement changes. The company supports suppliers on this journey through tailored training webinars.

Priority 1

Telefónica invites its most carbon-intensive suppliers to join the “Carbon Reduction Programme”. This collaborative initiative, involving other telecoms, focuses on reducing emissions at the product level. In partnership with its peers and suppliers, Telefónica seeks to practically reduce emissions related to the products sourced based on Life Cycle Assessments (LCAs). In addition, Telefónica requests top suppliers to establish science-based targets and have them validated by the Science Based Targets initiative (SBTi).

With this targeted supplier engagement strategy, Telefónica works hand-in-hand with its suppliers on the common journey towards becoming aligned to 1.5ºC.