Material topics and IROs

In 2024, we conducted a double materiality analysis (DMA) for our Group Sustainability Report in accordance with the European Sustainability Reporting Standards (ESRS). This analysis assesses both the environmental and social impacts as well as the associated financial opportunities and risks for our company. In 2025, the analysis was fully updated with the involvement of both external and internal stakeholders. These material topics, along with company-specific strategy topics such as network quality and coverage, are presented on the following pages. We have assigned them to our fields of action:

Environment

RBP

Climate and environment

Results of the double materiality assessment

ESRS

E1 Climate change
- Climate change adaptation
- Climate change mitigation
- Energy
E5 Circular economy
- Resources inflows, including resource use
- Resources outflows related to products and services

RBP

Customers and society

Results of the double materiality assessment

ESRS

S4 Consumers and end-users
- Information-related impacts for consumers and/or end-users
- Personal safety of end-users
- Social inclusion of consumers and/or end-users

RBP

Employees

Results of the double materiality assessment

ESRS

S1 Own workforce
- Working conditions
- Equal treatment and equal opportunities for all
- Other labour rights

Governance

RBP

Responsible corporate governance

Results of the double materiality assessment

ESRS

G1 Business conduct
- Corporate culture
- Protection of whistleblowers
- Management of relationships with suppliers
- Corruption and bribery
- Network and data security
S2 Workers in the value chain
- Working conditions
- Equal treatment and equal opportunities for all
- Other labour rights

Material impacts, opportunities, and risks (IROs)

ESRS E1 Climate Change

**Material impacts, opportunities, and risks – ESRS E1 Climate Change**
Type	Subtopic	Description	Upstream	Actual or potential	Policies
			Position in the value chain
Positive impact	Climate change mitigation	Avoided Scope 1 and 2 GHG emissions due to the shift to renewable energy sources and the implementation of energy efficiency measures		Actual	Environment and Energy Policy Low Carbon Procurement Policy
Positive impact	Climate change mitigation	Helping customers to decarbonise through the Company’s products and services, enabling the avoidance of greenhouse gas emissions		Actual	Environment and Energy Policy Supply Chain Sustainability Policy
Positive impact	Climate change mitigation	Contribution to climate change mitigation through investment in emissions offset projects		Actual	Environment and Energy Policy Low Carbon Procurement Policy
Positive impact	Energy	Reducing energy consumption through the implementation of energy efficiency measures		Actual	Environment and Energy Policy Low Carbon Procurement Policy
Negative Impact	Climate change adaptation	Interruption of customer services as a result of events related to climate change		Actual	Environment and Energy Policy IT Service Continuity Management (ITSCM) policy Business Continuity Management (BCM) policy
Negative Impact	Climate change mitigation	Contribution to climate change through greenhouse gas emissions (scopes 1 and 2)		Actual	Environment and Energy Policy
Negative Impact	Climate change mitigation	Contribution to climate change through indirect greenhouse gas emissions (Scope 3)		Actual	Environment and Energy Policy Low Carbon Procurement Policy Supply Chain Sustainability Policy
Negative Impact	Energy	Environmental impact associated with the generation of electricity consumed by the Telefónica Group		Actual	Environment and Energy Policy Low Carbon Procurement Policy
Opportunity	Energy	Reduced grid energy costs thanks to the Renewable Energy Plan including PPAs (Power Purchase Agreements)			Environment and Energy Policy Low Carbon Procurement Policy
Risk	Climate change mitigation	Increased costs associated with the rise in carbon credit prices to offset scope 3 emissions (market transition risk)			Environment and Energy Policy Low Carbon Procurement Policy Supply Chain Sustainability Policy
Risk	Energy	Increase in operating costs due to rising electricity prices (market transition risk)			Environment and Energy Policy Low Carbon Procurement Policy

ESRS E5 Circular Economy

**Material impacts, opportunities, and risks – ESRS E5 Circular Economy**
Type	Subtopic	Description	Upstream	Actual or potential	Policies
			Position in the value chain
Positive Impact	Resources inflows, including resource use	Avoidance of environmental impact related to the extraction of virgin raw materials through the recycling and reuse of parts and equipment		Actual	Environment and Energy Policy Supply Chain Sustainability Policy
Negative Impact	Resources inflows, including resource use	Environmental impacts related to the extraction of raw materials and manufacturing of products supplied by suppliers		Actual	Environment and Energy Policy Supply Chain Sustainability Policy
Negative Impact	Resource outflows related to products and services	Environmental impacts generated by the lack of circularity criteria in the manufacture of products supplied by suppliers		Actual	Environment and Energy Policy Supply Chain Sustainability Policy Guideline on waste management
Opportunity	Resources inflows, including resource use	Generation of savings by reusing customer-premises equipment (routers, decoders...) avoiding the purchase of new equipment			Environment and Energy Policy Supply Chain Sustainability Policy
Risk	Resources inflows, including resource use	Loss of profits associated with supply chain disruption resulting from lack of electronic equipment for operations, offices and customers due to resource depletion, conflicts and geopolitical tensions arising from competition for natural resources			Environment and Energy Policy Supply Chain Sustainability Policy Guideline on waste management
Risk	Resources inflows, including resource use	Increased costs and waiting times for delivery of products and services			Environment and Energy Policy Supply Chain Sustainability Policy

ESRS S1 Own workforce

**Material impacts, opportunities, and risks – ESRS S1 Own workforce**
Type	Subtopic	Description	Upstream	Actual or potential	Policies
			Position in the value chain
Positive Impact	Working conditions	Improvement of the living and economic conditions of Company employees due to the promotion of quality employment with fair, competitive and attractive working conditions		Actual	Diversity & Inclusion Policy Gender Equality Policy
Positive Impact	Working conditions	Improvement in working conditions for Telefónica’s own workforce due to social dialogue, freedom of association and collective bargaining measures		Actual	Internal collective works agreements
Positive Impact	Working conditions	Contribution to a safe and healthy environment by reducing the number and severity of accidents at work through the high level of training of employees in health and safety (physical and mental)		Actual	Health Policy Group standard occupational health and safety management
Positive Impact	Equal treatment and opportunities for all	Improving employee skills and promoting talent retention, as well as creating new opportunities, thanks to a wide range of training courses and programs		Actual	Diversity & Inclusion Policy Gender Equality Policy
Positive Impact	Equal treatment and opportunities for all	Positive impact on society thanks to the diversity and inclusion measures implemented by the Company		Actual	Diversity & Inclusion Policy Gender Equality Policy
Negative Impact	Working conditions	Exposure of staff to occupational hazards that may affect their physical or mental integrity, arising from the nature of certain activities or work environments, or from possible limitations in the anticipation and response capacity of the Health and Safety management system		Potential	Declaration of Principles on Respecting Human Rights Health Policy Group standard occupational health and safety management Guideline risk assessment (DE) Guideline on appointed roles in occupational health and safety (DE) Guideline accident reporting (DE)
Negative Impact	Equal treatment and opportunities for all	Gender pay gap and barriers to promotion to leadership and decision-making positions		Potential	Diversity & Inclusion Policy Gender Equality Policy
Negative Impact	Other work-related rights	Loss of confidentiality of the personal data of a specific group of employees affected by a security incident		Potential	Group standard on data protection
Risk	Equal treatment and opportunities for all	Talent shortages and new skill requirements in the workforce due to rapid technological changes			Diversity & Inclusion Policy Gender Equality Policy

ESRS S2 Workers in the value chain

**Material impacts, opportunities, and risks – ESRS S2 Workers in the value chain**
Type	Subtopic	Description	Upstream	Actual or potential	Policies
			Position in the value chain
Negative Impact	Working conditions	Inadequate working conditions and/or unstable employment for workers in the supply chain (e.g. lack of social protection in high-risk supply chain countries, temporary contracts or contracts without minimum guarantees)		Actual	Declaration of Principles on Respecting Human Rights Human Rights Policy Health Policy Annex Health & Safety Supply Chain Sustainability Policy
Negative Impact	Working conditions	Generation of tensions and discontent among value chain workers due to wages that are not commensurate with assigned responsibilities		Actual	Declaration of Principles on Respecting Human Rights Human Rights Policy Supply Chain Sustainability Policy
Negative Impact	Working conditions	Social unrest stemming from low collective bargaining coverage in value chain suppliers		Actual	Declaration of Principles on Respecting Human Rights Supply Chain Sustainability Policy
Negative Impact	Working conditions	Negative impact on the health and safety of workers in the value chain due to non-compliance with international occupational safety and health standards and regulations by suppliers and franchisees		Actual	Declaration of Principles on Respecting Human Rights Human Rights Policy Health Policy Annex Health & Safety Supply Chain Sustainability Policy
Negative Impact	Working conditions	Increased overtime at the supplier due to agreed conditions and/or peaks in demand		Actual	Declaration of Principles on Respecting Human Rights Supply Chain Sustainability Policy
Negative Impact	Working conditions	Social tensions and deterioration of the working environment due to a limitation of the freedom of association of value chain workers		Actual	Declaration of Principles on Respecting Human Rights Human Rights Policy Supply Chain Sustainability Policy
Negative Impact	Equal treatment and opportunities for all	Differential or unequal treatment of workers in the value chain on discriminatory grounds		Potential	Declaration of Principles on Respecting Human Rights Human Rights Policy Supply Chain Sustainability Policy
Negative Impact	Other work-related rights	Loss of confidentiality of suppliers’ personal data		Potential	Declaration of Principles on Respecting Human Rights Group standard on data protection Supply Chain Sustainability Policy
Negative Impact	Other work-related rights	Performance of work at night or in hazardous environments by adolescents (over 15 and under 18 years of age) in contravention of children’s rights		Actual	Declaration of Principles on Respecting Human Rights Human Rights Policy Supply Chain Sustainability Policy Commitment to Children’s Rights
Negative Impact	Other work-related rights	Existence of abusive practices by employers towards their workers, especially in the context of migrant employment		Actual	Declaration of Principles on Respecting Human Rights Human Rights Policy Supply Chain Sustainability Policy
Risk	Working conditions	Sanctions associated with non-compliance with occupational health and safety standards and regulations by suppliers			Declaration of Principles on Respecting Human Rights Human Rights Policy Supply Chain Sustainability Policy Health Policy Annex Health & Safety Human Rights Handbook LkSG

ESRS S4 Consumer and enduser

**Material impacts, opportunities, and risks – ESRS S4 Consumer and enduser**
Type	Subtopic	Description	Upstream	Actual or potential	Policies
			Position in the value chain
Positive Impact	Social inclusion of consumers and/or end users	Improved productivity, processes and resource efficiency, leading to greater socio-economic growth, thanks to the development of innovative solutions by the company		Actual	Responsible Business Principles AI Code of Conduct for Telefónica (Artificial Intelligence Principles)
Positive Impact	Social inclusion of consumers and/or end users	Promotion and support of the entrepreneurial ecosystem, including through continuous efforts in incubation centres for the launch of new business initiatives		Actual	Responsible Business Principles
Positive Impact	Social inclusion of consumers and/or end users	Boosting socio-economic development through the responsible digitalisation of society via connectivity and the technological services offered by the company		Actual	Responsible Business Principles AI Code of Conduct for Telefónica (Artificial Intelligence Principles) Human Rights Policy
Positive Impact	Social inclusion of consumers and/or end users	By providing individualized offers and high quality services and the continuous improvement of the customer experience based on customer feedback, O₂ Telefónica can achieve high levels of customer satisfaction		Actual	Responsible Business Principles Guidelines on ethically responsible communication Quality Management Manual (NPS) Customer Relationship Principles
Positive Impact	Information-related impacts for consumers and/or end users	Promoting the right to privacy by encouraging transparency of user data and providing users with the knowledge and tools necessary to control their information		Actual	Responsible Business Principles Group standard on data protection Declaration of Principles on Respecting Human Rights Human Rights Policy
Negative Impact	Social inclusion of consumers and/or end users	Harm to consumers and end users resulting from the failure to incorporate sustainability criteria into products and services		Potential	Responsible Business Principles Guidelines on ethically responsible communication AI Code of Conduct for Telefónica (Artificial Intelligence Principles) Declaration of Principles on Respecting Human Rights Human Rights Policy Group standard on data protection
Negative Impact	Social inclusion of consumers and/or end users	Widening of the digital divide for consumers and users due to limited access to adequate connectivity or the lack of accessible and affordable digital services		Actual	Responsible Business Principles Declaration of Principles on Respecting Human Rights Human Rights Policy Customer Relationship Principles
Negative Impact	Information-related impacts for consumers and/or end users	Loss of confidentiality of our customers’ and end users’ personal data		Potential	Responsible Business Principles Group standard on data protection Declaration of Principles on Respecting Human Rights Human Rights Policy
Negative Impact	Personal safety of consumers and/or end users	Adverse effects on minors resulting from exposure to and/or consumption of inappropriate content		Potential	Guidelines on ethically responsible communication AI Code of Conduct for Telefónica (Artificial Intelligence Principles) Declaration of Principles on Respecting Human Rights Human Rights Policy Group standard on data protection Customer Relationship Principles
Opportunity	Social inclusion of consumers and/or end users	Growth in turnover linked to digital products and services, such as innovation and improved experience and personalisation thanks to artificial intelligence			Responsible Business Principles Guidelines on ethically responsible communication AI Code of Conduct for Telefónica (Artificial Intelligence Principles)
Opportunity	Social inclusion of consumers and/or end users	Generating revenue from customers in rural or remote areas with mobile and/or fixed broadband coverage, where connectivity has historically been poor compared to urban areas			Responsible Business Principles Guidelines on ethically responsible communication Human Rights Policy
Opportunity	Social inclusion of consumers and/or end users	Through digital accessibility (in the sense of promoting digital access and skills), we make our portfolio of services and our customer service accessible, attractive and usable for a wider range of customers. This can lead to the formation of new business partnerships, increases customer numbers, turnover and profits.			Responsible Business Principles Guidelines on ethically responsible communication Human Rights Policy Customer Relationship Principles
Risk	Social inclusion of consumers and/or end users	Loss of customers as a result of dissatisfaction with access to, quality and use of our products and services			Responsible Business Principles Guidelines on ethically responsible communication Human Rights Policy
Risk	Information-related impacts for consumers and/or end users	Reputational risk arising from inadequate processing of personal data			Group standard on data protection Guidelines on ethically responsible communication
Risk	Information-related impacts for consumers and/or end users	Fines or financial penalties for the loss of confidentiality of personal data of customers or end users, or for the inadequate processing thereof			Group standard on data protection Guidelines on ethically responsible communication

ESRS G1 Business conduct

**Material impacts, opportunities, and risks – ESRS G1 Business conduct**
Type	Subtopic	Description	Upstream	Actual or potential	Policies
			Position in the value chain
Positive Impact	Network and data security	Improved protection of our customers’ information through security management to ensure reliable service		Actual	Responsible Business Principles Business continuity management guidelines IT Service Continuity Management (ITSCM) Policy Information security policy Data protection incident policy Crisi management policy
Negative Impact	Corporate culture	Unethical corporate practices that may affect our stakeholders		Actual	Responsible Business Principles Corruption prevention guidelines Guidelines on handling conflicts of interest, invitations, gifts and incentive Customer Relationship Principles
Negative Impact	Corruption and bribery	Inadequate prevention and detection mechanisms can facilitate corruption and bribery practices, compromising socioeconomic development		Potential	Responsible Business Principles Group policy on Anti-Trust law Corruption prevention guidelines Policy compliance organisation Guidelines on handling conflicts of interest, invitations, gifts and incentives
Negative Impact	Management of relationships with suppliers	Impact on the financial and operational stability of our suppliers due to consolidation of operations, changes in demand for services, or the demobilization of suppliers		Actual	Responsible Business Principles Declaration of Principles on Respecting Human Rights Supply Chain Sustainability Policy Guideline Contract Management
Negative Impact	Management of relationships with suppliers	Lack of implementation of ESG criteria in the supplier award process or supplier compliance with them		Actual	Responsible Business Principles Supply Chain Sustainability Policy Guideline Contract Management Procurement Policy
Negative Impact	Network and data security	Cyberattacks against third parties resulting from security vulnerabilities in Telefónica’s products and services		Potential	Responsible Business Principles Group standard on data protection Information security policy
Negative Impact	Network and data security	Interruption of communications services (especially emergency services (112)) due to non-compliance with Business Continuity Plans		Actual	Business continuity management guidelines (BCM) IT Service Continuity Management (ITSCM) Policy
Risk	Corporate culture	Failing to comply with a company’s established business conduct culture can result in penalties and, in some cases, the skimming of profits due to violations of applicable consumer rights and regulations. As well as reducing the chances of attracting top talent, which ultimately leads to stagnation or even a decline in sales. Furthermore, non-compliance can put the company at a disadvantage compared to its competitors			Responsible Business Principles Governance policy Guidelines on ethically responsible communication
Risk	Corruption and bribery	Deterioration of the Company’s control environment in terms of prevention, detection and response to corruption and bribery			Responsible Business Principles Group policy on Anti-Trust law Corruption prevention guidelines Guidelines on handling conflicts of interest, invitations, gifts and incentives Policy compliance organisation
Risk	Corruption and bribery	Fines and penalties resulting from the materialisation of corruption and bribery cases			Business Principles Group policy on Anti-Trust law Corruption prevention guidelines Guidelines on handling conflicts of interest, invitations, gifts and incentives
Risk	Protection of whistleblowers	Fines or sanctions for a breach of the complaint management procedure			Whistle-blower policy Rules of procedure: Complaints procedure / whistleblower procedure
Risk	Network and data security	Digital security threats that could materialize in O₂ Telefónica’s systems			Group standard on data protection Information security policy
Risk	Network and data security	Cyberattacks via O₂ Telefónica’s products and services			Group standard on data protection Information security policy
Risk	Network and data security	Interruption of services provided by the company due to operational security incidents			Business continuity management guidelines (BCM) IT Service Continuity Management (ITSCM) Policy