The Company’s strategy is primarily based on two pillars: its mission of “making the world more humane by connecting lives” and its Principles of Responsible Business, which encompass not only its code of ethics, but also its policy of responsibility towards its stakeholders and society in general, with the commitment to achieve efficiency, growth and long-term value with the confidence of all stakeholders. At the same time, the strategy is based on three pillars:
- Building a greener future supported by technology and digital services, to achieve a digital, green and energy transition that leverages a competitive and resilient economy.
- Generating progress, favoring economic and social development based on digitization.
- Leading by example and generating trust by managing our activity responsibly.
Equity Story
Efficiency
PNR Pillars
E-Environment A-Ambiental
Building a Greener Future
- Energy and climate change
- Circular economy
- Eco Smart solutions
- Ecorating
- ISO 14001
SDGs
Equity Story
Growth
PNR Pillars
Social S-Social
Helping Society Prosper
- Connectivity and digitization
- Gender diversity and inclusion
- Human rights
- Ethical and sustainable products and services
SDGs
Equity Story
Trust
PNR Pillars
Governance G-Gobernanza
Leading by Example
- Corporate Governance
- Ethical culture and responsible principles
- Digital trust
- Commitment to suppliers
SDGs
Sustainability is found both in what we do and how we do it, to guarantee economic results based on business management from a social and environmental perspective. For the Company, ESG (Environmental, Social and Governance) management is transversal and forms part of the heart of the business.
Although since the beginning of the Company’s operations in Colombia, it focused on generating economic value with responsible business conduct, in 2021 it formalized the adoption of the legal status as a Benefit and Collective Interest Company. The corporate purpose includes eight activities within the framework of the five dimensions: Business Model, Corporate Governance, Labor Practices, Environmental Practices and Practices with the Community
(see Chapter 6. BIC Management Report).
Allies in the Sustainable
Development of Colombia
With the Responsible Business Plan as its strategy, framed in the three environmental, social and governance (ESG) pillars: A – Building a greener future, S – Helping society prosper and G – Leading by example, the Company contributes to achieving the Sustainable Development Goals as follows:
Building a greener future
Having a more efficient telecommunications network powered by renewable energy.
Provider of digital solutions that help customers reduce their CO2 emissions and promote Sustainable Mobility.
Promote a circular economy and responsible consumption in the use of electronic devices through reuse and recycling.
Helping society prosper
Provide faster and better-quality internet to people and businesses.
Manage talent by promoting and favoring the inclusion of people with disabilities, labor equity, and promoting digitization for talent development and a more sustainable economy.
Address inequalities by investing in education, digital skills and accessibility with a differential offer.
Lead by Example
Improve trust through ethical and responsible use of technology, robust corporate governance and guarantee the safeguarding of customer data security and privacy.
Commitment to the highest standards of business principles and ethics, by promoting sustainability in the supply chain.
In this framework, Movistar, as a fundamental actor in the Information and Communication Technologies (ICT) sector, has taken responsibility for the impacts on the environment and has committed to complying with the Sustainable Development Goals (SDGs).
Although Goal 9 (build resilient infrastructure, promote sustainable industrialization and foster innovation) is the main goal where the Company generates value, there are other goals where an impact is generated, particularly those SDGs related to economic growth and equal opportunities (SDGs 4, 5, 8 and 10), environmental protection (SDGs 7, 12 and 13), quality education (SDG 4), the development of sustainable societies (SDG 11), ethical and integral behavior (SDG 16) and the generation of alliances (SDG 17).
Planeta Movistar
To promote Sustainability, the Company launched Planeta Movistar in 2023, the portfolio of Products and Services with sustainable criteria that combines the commercial offer with environmental and social attributes for individual and corporate clients. It also lists training and responsible consumption options. See more at www.movistar.com.co/sustainability
Learn more here:
Risk Management
Model
The Company has a Risk Management Model based on COSO ERM 2017 (Committee of Sponsoring Organizations of the Treadway Commission), which is homologous to that implemented in the main operations of the Telefónica Group, which is also inspired by best practices, ensuring that managers carry out timely identification, evaluation, response and monitoring of the main risks, as well as coordinated and prioritized action to address them.
Furthermore, the Telefónica Group’s Principles of Responsible Business specifically indicate that:
“We establish appropriate controls to assess and manage all risks relevant to the Company”—
This Risk Management Policy is also approved by the Board of Directors, and has a Telefónica Group Corporate Risk Management Procedure, thus contributing to continuous improvement in business performance.
The Risk Map takes into account the following categories:
- Business: Those derived from the economic and political environment, regulatory changes; entry of new competitors; innovation and other events that may affect the Company’s sustainability and reputation.
- Operational: These are derived from failures coming from the network, IT systems, security, customer service quality, and cyberattacks, among others.
- Financial: Those derived from adverse movements in the economic environment or financial variables: exchange rate or interest rate, as well as issues of a fiscal nature and commercial credit risks.
- Legal and Regulatory Compliance: Due to litigation of different kinds or related to compliance with obligations that can have an impact not only in economic terms but also on the company’s image and reputation.
The Model adapts to changes in the environment, constantly updating itself, along with strategies to respond to each of them.
Risk Management
Process
The risk management process takes as a reference the Company’s strategy and
objectives, to identify those that could affect their achievement.
It reviews two complementary perspectives: top-down and bottom-up, which identifies and describes the specific risks of the operation and proposes an analysis of those considered critical and common to the Group’s companies.
The model considers the identification of those issues that, while their outcome and time horizon are uncertain and difficult to predict, could have a potential adverse impact on the Company’s future performance.
After identifying the risks, they are evaluated based on impact, whether qualitative or quantitative, and the probability of occurrence, considering factors such as historical trend and the time horizon for materialization, allowing prioritization of monitoring and response, either through mitigation plans for their effects or actions to avoid or transfer them. This information on the main risks facilitates:
- Completing internal or external reports.
- Guiding action and management, either globally or locally.
- Prioritizing Internal Audit actions.
- What is happening in the world?
Trends, external circumstances and/or situations, political, economic, cultural, among others that benefit or affect the company. Some references are the World Economic Forum, Gartner, Ernest & Young, KPMG, Deloitte, among others. - What do telecommunications or technology companies say?
Risks or opportunities that competitors or allies like Google, Microsoft, Netflix, AT&T, among others, may see, where the Company can cross-identify what is evidenced in the sector in terms of risks. - What do other operators see?
Recognizing whether the risks or opportunities that operators from other countries may have could affect the company, for example, Hispam and the Big 4[1], seeking to identify common issues or others that are gaining relevance in a given country. - What is seen internally and what do customers, suppliers, allies, workers and others think?
Internal situations that can be leveraged to turn them into opportunities or that should be controlled because they are a potential risk. As well as knowing the relevant needs and expectations of stakeholders becomes a duty to work on or a regulatory requirement to fulfill.
- Big 4 refers to the Telefónica Group’s focus on four key operators: Spain, Germany, United Kingdom and Brazil.
Roles and
Responsibilities
In the Principles of Responsible Business and the Risk Management Policy, it is established that the entire organization is responsible for contributing to the identification and management of risks, for which these roles have been established:
- Oversight of the risk management system:
The Board of Directors, through its Audit Committee, oversees the process and the Management Committee does the same from the perspective of risks common to the Group and issues specific to the operation. - Risk owners:
They actively participate in the risk strategy and in decisions regarding their management. Each of the identified risks will be assigned a manager (usually a manager), developing a mitigation plan and effectively monitoring its evolution. In addition, the person responsible for the control or mitigation plan will be identified and will supervise that it is designed and works effectively when it leaves its scope. - Risk Management Function:
As a support for the development of supervision by the Audit and Control Commission and the management committee, a risk management function has been established within the Internal Audit area, independent of management, with the aim of promoting, supporting, coordinating and verifying the application of what is established in the Risk Management Policy.
Main Impacts, Risks
and Opportunities
The most significant risks and uncertainties facing the Company that could affect its business, financial position and results, must be considered along with the information collected in the financial statements:
- The Company is exposed to litigation and/or lawsuits arising from regulatory causes.
- Derived from actions or processes of the Company, customer dissatisfaction may arise, leading to loss of trust and/or withdrawal from the Company.
- Some technical vulnerabilities in systems whose exploitation could generate possible information leaks, unauthorized access or system unavailability, as well as contingencies due to non-compliance with Local Regulations and reputational impact in the face of the potential occurrence of accusations or media scandals.
- Potential failures in systems can lead to a loss of quality or service interruption, such as events related to extreme natural disasters, which could affect the availability of systems that support the Company’s critical services.
Significant indirect economic impacts have also been identified:
- Litigation of various kinds in which the Company is involved, whose outcomes are unpredictable, can affect the Company, not only in economic terms, but also by its impact on image and reputation, due to its possible impact on the media.
- Positively, improvements in the different macroeconomic and social scenarios stand out, which allowed indicators such as inflation, TRM and interest rates to significantly reduce their impact for 2023.
Relationship with
Stakeholders
- GRI Content 2-29
The Company is interested in creating relationships of trust with its stakeholders. According to the stakeholder mapping carried out in the Stakeholder Panel consultation, seven key stakeholder groups are defined:
Clients: Both residential (B2C) and business (B2B) clients, as well as all organizations that represent clients.
Employees: Employees, associations and unions that represent the interests of workers.
Strategic partners and suppliers: Supplier companies and the organizations and associations that represent the interests of the supply chain.
Shareholders and Investors: Companies/people who invest in Telefónica and/or analyze its sustainable profitability.
Government and regulatory entities: Local, national and international organizations.
Opinion leaders, media and communication services: Influencers, press, and communication brand and advertising agencies.
Society: Includes communities and special collectives, Non-Governmental Organizations (NGOs), think tanks, business schools and universities.
1. Clients: Both residential (B2C) and business (B2B) clients, as well as all organizations that represent clients.
2. Employees: Employees, associations and unions that represent the interests of workers.
3. Strategic partners and suppliers: Supplier companies and the organizations and associations that represent the interests of the supply chain.
4. Shareholders and Investors: Companies/people who invest in Telefónica and/or analyze its sustainable profitability.
5. Government and regulatory entities: Local, national and international organizations.
6. Opinion leaders, media and communication services: Influencers, press, and communication brand and advertising agencies.
7. Society: Includes communities and special collectives, Non-Governmental Organizations (NGOs), think tanks, business schools and universities.
Through stakeholders, we understand the context in which the company develops its activity, as well as identifying both its strengths and opportunities for improvement where it must define its action plans. In addition to this, the Company knows the perception of its stakeholders and maintains relationships with them through other tools and channels, such as:
Collaborators
The Motivation Survey is carried out annually to calculate the eNPS (Employee Net Promoter Score) to know what is being done well and reinforce it, as well as to identify the aspects that need to be improved. In 2023, the Company rose three percentage points from 82 to 85. Other spaces for dialogue are also held with collaborators:
- 13 face-to-face and/or virtual coffees or discussions, led by the CEO President in headquarters located nationwide, and 100 led by regional Directors and Managers.
- “Commitment to the regions”: in 2023, 5 live broadcasts were made through Workplace to generate closeness with employees located in the Regions; good practices and the contribution of the teams to the business objectives are socialized.
- Management Meetings: these are massive meetings of the Company on a quarterly basis (1 Strategic Plan launch and 4 quarterly follow-up events). To guarantee the engagement of employees, they were developed in a hybrid format through live broadcasts on the corporate social network Workplace and in person at the Administrative headquarters. This social network allows a permanent conversation with employees. At the meetings, operational and financial indicators are reviewed and other cross-cutting issues or topics of interest to the entire Company are defined. On average, there are 1,500 users per meeting and to reinforce the information shared, the CEO-1 level (Directors) is invited to activate the cascade communication exercise with their area, in order to guarantee that the input is reached at the base of the structure.
Media/Journalists
During 2023, the Company mobilized the following actions with the media and journalists:
- ABC, a differential space offered to journalists in which 4 meetings are held with an expert through Teams to talk about different topics of interest: 5G connectivity, Social Inclusion and Disability, Open Innovation and Startups, and Communication in reputation. On average there were 40 attendees per talk.
- Interviews to understand topics of interest to journalists: During 2023, 73 interviews were conducted that allowed journalists to understand situations in the sector, regulatory, and new trends. These private and individual spaces allowed them to understand topics more fluently.
- Twitter Space for the community of followers of the profile: These spaces are organized by the Company through Twitter to talk about topics of interest leveraged by a social network with an expert. Last year, 2 were held which had more than 78 people connected.
- Regional Fiber Launches: The communications and positioning plan for Movistar Fiber Optics was executed with the different stakeholders, including the media
- and journalists: 3 press conferences were held with the presence of the CEO President and Regional Managers in the “Eje Cafetero” (coffee-growing region), Popayán and Norte de Santander. In addition, 11 press releases were mobilized that communicated Movistar’s commitment to connect opportunities through digitalization and Fiber.
- Launch of #UnMillóndeFibras, a communications strategy related to the Company’s milestone of having reached one million customers connected with
this technology.
Shareholders and Investors
The Company has both a Shareholder Service Office and an Investor Service Office. In 2032, in addition to the meetings of the General Shareholders’ Meeting, two bulletins were prepared for shareholders in which the main events related to the Company, the financial statements at the end of the year and for interim periods, as well as the relevant matters of the company and society relationship were reported. Likewise, 86 applications were received from 43 investors, responding by mail or scheduled meeting.
Clients
In general, clients seek to obtain solutions in each of the contacts made with the Company, hopefully in the first contact, without requiring referral to other areas. Customer concerns, captured from different sources, revolve around two major themes: Performance and Value Proposition.
In terms of the operation of the service, the customer expects stability and continuity of the service, as well as promptness in the solution in case of affectation, which cannot always be guaranteed due to situations of vandalism, theft and public works that generate cuts in Movistar’s networks.
In value proposition (offer, price and plan) the customer voices focus on variations in the rate that occur due to rate increases, compliance with offers and positioning against competitors.
The result of the recommendation level mobilized the entire Company to identify processes, policies, platforms that were degrading the customer experience and a plan was defined with 11 structural initiatives with weekly monitoring by the Executive Committee to the identified action plans; multidisciplinary work teams were generated to delve into the root cause of problems and ensure solutions, including authorities, suppliers, best practices of other Companies and support from the Company’s global and regional team.
In addition to the surveys to measure the level of recommendation, the analysis of the voice of the customer is complemented with transactional satisfaction surveys from which direct feedback is received from customers. These surveys allow us to act early on any impact that the customer is experiencing, with updated information that reaches the process management areas so that they can take action, both at the specific level with dissatisfied customers (reactive management, a process known as closing the cycle) and at the root cause level (proactive management, improving structural failures, etc., when applicable). In 2023, 4,665,034 transactional surveys were carried out, with a monthly average of 383,782 surveys, improving the process of collecting and managing them, under an automated process that facilitates the customer’s response in a web form, as well as its subsequent processing.
For the Company, the natural conversation that takes place on a day-to-day basis in the media, social networks, unions, control entities, competition and legislative agenda is also relevant. For this reason, daily monitoring is carried out that allows for an analysis of risks and opportunities for the definition of action plans.
Channels for Dialogue
with Stakeholder Groups
| Stakeholder Group | Channel for Dialogue |
|---|---|
| Shareholders |
|
| Investors |
|
| Government and regulatory entities |
|
| Employees |
|
| Senior Management |
|
| Clients B2B |
|
| Clients B2C |
|
| Suppliers |
|
| Society |
|
| Opinion Leaders, Media, and Communication Services |
|
Materiality
- GRI Content 3-1
To update material topics, the Company takes into account the GRI Standards recommendations, following the following four steps:
- Context analysis: The Company conducts a context analysis, including alerts identified in monitoring in the media, social networks, guilds, control bodies, competition and legislative agenda, as well as the mission, the portfolio of products and services offered, the sector analysis, the understanding of the value chain, the context of sustainability and BIC companies, and the identification of stakeholders.
- Identification of actual and potential impacts: For the impact analysis, the Company takes as a reference the last study conducted by EY in 2020 on the contribution to human development, the Integrated Management System and the analysis of contribution to the Sustainable Development Goals (see Chapter 3.1 Allies in the Sustainable Development of Colombia).
- Evaluation of importance and performance: Stakeholders are those who evaluate the importance of these issues. The results of the Materiality Exercise, which was carried out at the end of 2022 and the beginning of 2023 by the consulting firm Ipsos, are used as a basis. This exercise consisted of identifying the specific aspects that influence key stakeholder groups and how they impact Telefónica Movistar’s business model. It is a key management process, as it allows focusing actions and resources on the most relevant and impactful issues. In the scope of the consultation, key stakeholders of the Company were considered in 8 Hispam markets, including Colombia; customers, regulator, shareholders, suppliers, employees, executives, etc. In Colombia, a sample of 807 out of 3,477 surveys was obtained, making it the country with the highest participation.
- Prioritization of the most significant impacts: The issues are located in the matrix that presents the importance versus performance rating of the Company, and in this way, management is focused on the most important issues with the lowest performance perceived by stakeholders.
Material Topics
- GRI Content 3-2
The Company’s materiality matrix has been built on the importance and performance variables in 7 dimensions and 18 material issues (variables that group together the responses obtained in the 77 questions measured), grouped by sustainability area.
| Pillar | Dimension | Material Issue | |
|---|---|---|---|
| Environmental | Climate Change and Environment | Circular Economy | |
| Climate Change |  | ||
| Social | Human Capital Management | Employee well-being | |
| Talent Management | | ||
| Impact on Society | Local Economy | | |
| Responsible Use | |||
| Social Contribution | | ||
| Connecting all of society | Inclusive Connectivity | ||
| Digitalization of Society | |||
| Governance | Customer Relationship | Customer Promise | |
| Digital Security | |||
| Responsible Marketing | |||
| Responsible Relationship with Partners and Suppliers | Supplier Relationship | | |
| Supply Chain | | ||
| Supplier Co-creation | |||
| Business Ethics and Corporate Governance | Ethical Behavior | | |
| Fosters Dialogue | |||
| Corporate Governance | |
Main findings
In the Importance Axis: Customer Relationship is the dimension with the highest importance for deciding to collaborate with a Telecommunications company, according to the perspective of all stakeholder groups. This dimension is very important for 94% of the participants and its average importance is 9.69 (on a 0-10 scale).
On the Performance Axis: The perception of Telefónica’s performance is favorable in all dimensions of Responsible Business with ratings above 8.5 points (on a 0-10 scale). The dimensions where Telefónica stands out for a higher performance are connecting all of society, ethics and corporate governance and impact on society, which are also the two aspects that have grown the most in importance after COVID-19, followed by the Customer Relationship Dimension, which increased 49% post-pandemic.