Environmental strategy

A strategy built on two key planks: the Climate Change Office and the Global Management System

For Telefónica, caring for the environment is not just a commitment. It is also a central element of its business objectives. Protecting the environment constitutes a challenge for internal management, in that legal compliance, environmental management and controlled use of resouces should also help improve our operational efficiency. It also offers a business opportunity that enables us to developed new services and access new sources of income.

The Telefónica Guiding Principles approved in 2006 contain a specific environmental undertaking: "We are committed to sustainable development, environmental protection and the minimisation of the negative fallout from our operations on our surroundings". The Action Plan launched in 2007 was based on this undertaking and stuctured around five key lines of action: climate change, environmental management, responsible network roll-out, waste management, telecommunications and sustainable development.

In 2008, two factors determined the Group's environment-related priorities and activities. The first was the need to guarantee fulfillment of the challenges assumed under the Action Plan approved in 2007. The second is climate change, an issue currently at the top of the world agenda and in relation to which ICTs have an increasingly important role, given their potential for fostering energy efficiency in other sectors.

These two factors led Telefónica to structure its environmental strategy along two clearly distinct lines. Firsty, in 2008, it created a cross-functional management unit dedicated to climate change and energy, called the Climate Change Office, which has the remit of ensuring reductions in Telefónica's energy consumption and greenhouse gas (GHG) emissions, fostering the development of services that enable customers and other sectors to become more energy-efficient, and positioning the Information and Communications Technologies (ICTs) sector as a central solution for this global problem.

Secondly, it designed and implemented a Global Environmental Management System to manage and ensure effective control over all other environemental issues affecting the Group. This system establishes minimum management prerequisites for all Group companies, irrespective of their geographical location or business activity. Its aim is to achieve ongoing improvements, building on the commitment to comply with prevailing legislation and control Telefónica's environmental, with the aim of reducing possible impacts on the environment.

This supplement to the CSR Report sets out the most significant advances achieved by the company in 2008 in relation to the environment and climate change and provides an overview of performance in these areas through its key figures.