Telefónica

Telefonica operates a Corporate Governance System that sets governance processes, controls and procedures for supervising sustainability, with its Responsible Business Principles acting as the Sustainability Policy. At December 31, 2024 the Board of Directors comprised 14 Directors: 2 executive (14%) and 12 non-executive (86%), of which 3 were proprietary (21%), 8 independent (57%) and 1 other external (7%). Employees do not have a representative on the Company's bodies. The Board had an Executive Committee and three advisory or supervisory Committees: Audit and Control, Nominating, Compensation and Corporate Governance, and Sustainability and Regulation. Board gender split was 64% men and 36% women (page 57). The Board determines general policies and strategies, approves the Strategic Plan, the Corporate Social Responsibility and Sustainability Policy and the Responsible Business Principles and Plan. The Sustainability and Regulation Committee monitors the Responsible Business Plan monthly. Management operates through an Executive Committee meeting twice a month, with Internal Audit performing control functions reporting to the Audit and Control Committee. A Diversity Policy governs Director selection, ensuring skills including sustainability (pages 55 to 59).

The Global Sustainability (ESG) Office is responsible for reporting on a monthly basis to the Sustainability and Regulation Committee and, where appropriate, to the Audit and Control Committee and the Board of Directors. It monitors and coordinates sustainability matters, including the sustainability strategy (Responsible Business Plan with its actions, monitoring metrics and objectives), double materiality analysis, sustainable governance and culture, the environment, human rights, due diligence in the value chain, customer responsibility and interaction with stakeholders such as analysts and investors. Other areas can also report alongside the Global Sustainability Office, including those under Corporate Affairs and Sustainability, Finance and Control, General Secretary and Regulation, Strategy and Development, People, and Technology and Information. The way the Board and its Committees consider impacts, risks and opportunities is central to supervising the Company's strategy. The Sustainability and Regulation Committee supervises and reviews the strategies and policies of the Responsible Business Plan, covering environmental and social subjects, and reports to the Audit and Control Committee on sustainability risks. During 2024 the Committee assessed major sustainability issues and the double materiality process, and identified the Group's list of impacts, risks and opportunities (pages 60 to 61).

Variable remuneration is designed to encourage attainment of short- and long-term targets aligned with strategy. Executives' short-term variable remuneration links 20% to sustainability objectives, all predetermined, specific and quantifiable, set and assessed by the Nominating, Compensation and Corporate Governance Committee. Short-term metrics carry financial targets weighted 80% (Free Cash Flow 30%, EBITDA 25%, Operating revenues 25%) and ESG targets weighted 20% (NPS 10%, gender equality - percentage of women in executive positions 5%, and Climate Change - GHG Emissions 5%). The long-term incentive links 10% to sustainability objectives: Relative TSR (50%), Free Cash Flow (40%), Neutralisation of CO2 emissions Scope 1+2 (5%) and gender equality - women in executive positions (5%). The Long-Term Incentive Plan was approved by the 2024 General Shareholders' Meeting, running five years across three-year cycles (2024-2026, 2025-2027, 2026-2028). GHG emissions and gender equality metrics are described, with climate targets aligned to the 1.5 degree Paris Agreement scenario (SBTi) and net zero by 2040. Payment is subject to Malus and Clawback clauses and a strict governance system (pages 61 to 63).

Telefonica has a due diligence process to identify, prevent and remedy potential or actual adverse impacts on people and the environment throughout the value chain. It is based on the UN Guiding Principles on Business and Human Rights and the OECD Guidelines for Multinational Enterprises, along with other international human rights agreements. In line with Directive (EU) 2024/1760 on corporate sustainability due diligence, the six key phases are: integrate due diligence into policies and management systems; identify and assess adverse impacts; prevent, mitigate and neutralise adverse impacts; monitor and assess the effectiveness of measures; communicate; and remedy, with affected stakeholders involved as a cross-cutting element. The governance model assigns roles to the Board of Directors, the Sustainability and Regulation Committee, the Audit and Control Committee, the Global Sustainability Department (ESG), management areas and local teams. The starting point is the Global Human Rights Policy, approved by the Board and applicable to all Group companies. Impact assessments are carried out globally by an independent external expert and across all operations every six months. The report cross-references how each due diligence element maps to the material topical standards (E1, E5, S1, S2, S4, G1) (pages 65 to 67).

The Telefonica Group has an internal control model defined in line with the Internal Control-Integrated Framework of the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Use of this framework facilitates recognition of the Company's internal control system by third parties such as external verifiers and supervisory bodies. Internal control covers both financial and non-financial aspects, including operational, technological, legal, social, environmental, reputational and regulatory compliance aspects. The key COSO components are the control environment, risk assessment, control activities, information and communication, and monitoring activities. Telefonica has a Risk Management Model based on the 2017 COSO ERM framework, implemented consistently across the Group's main operations, together with a Risk Management Policy approved by the Board and a Risk Management Procedure. Risk is assessed through top-down and bottom-up perspectives. A map of specific risks related to sustainability reporting is being developed and was expected to be completed in 2025. Since 2019 the Company has assessed the risk of Adaptation to ESG reporting requirements. Management areas are responsible for their internal control structures, while Internal Audit assesses and supervises internal control over sustainability reporting, escalating conclusions to the Board via the Audit and Control Committee (pages 63 to 64).

In 2024 Telefonica marked the 100th anniversary of its incorporation in Spain in 1924. At year end the Group operated in Europe (Spain, Germany and the United Kingdom) and Latin America (Brazil, Argentina, Chile, Colombia, Peru, Mexico, Ecuador, Venezuela and Uruguay), under brands including Movistar, Vivo, O2, VMO2 and Telefonica Empresas / Telefonica Tech. Main customer segments are residential, corporate and wholesale and other partners. The Group had 100,870 employees at year end (Brazil 36,200, Hispanoamerica 29,489, Spain 25,086, Germany 8,793, Rest 1,302) and total 2024 revenues of 41,315 million euros. Its mission is to make the world more human by connecting people's lives, reflected in the 2024-26 Responsible Business Plan built on three pillars: transform the customer relationship, transform the operating model, and transform and commit to long-term value. The business model rests on deployment, operation and maintenance of fixed and mobile networks, development and bundling of products and services, and relationships with end customers and other stakeholders. The value chain covers upstream, own operations and downstream across eight stages. The Company describes benefits generated for customers, employees, the supply chain, investors and communities (pages 37 to 41).

Telefonica manages relationships with stakeholders to build mutual value, align expectations, identify significant topics and anticipate sustainability trends. In 2024 the Company updated its process for identifying and prioritising stakeholders across the value chain, prioritising them based on an evaluation of influence and interest. Identified stakeholder groups include analysts and investors, competitors, consumers and end-users, employees, employees in the value chain, government entities and regulators, asset managers and credit institutions, the environment (a silent stakeholder), suppliers, insurance, and society. Interaction is tailored by group: continuous bidirectional communication for main groups (high influence and high interest), strategic communication for latent groups, regular information for informed groups, and occasional communication for monitored groups. General channels for all stakeholders include the consolidated management report, results presentations, the Queries Channel and the Whistleblowing Channel, and specific channels are mapped for main stakeholders. Stakeholder expectations feed into the double materiality process, target setting, and the Company's strategy and action plans. In 2025 the Group will analyse its channels to identify improvements. The Sustainability and Regulation Committee has duties to manage stakeholders, and the Global Sustainability (ESG) Department reports annually to it on stakeholder opinions and interests (pages 42 to 45).

The double materiality process determined which sustainability standards and issues are material for Telefonica and must be considered in the Sustainability Report, applying both financial materiality and impact materiality. As this is the first year of applying the regulations, a full comparison with the previous year is not possible. Following a uniform materiality threshold set at two on a scale of one to five, the material topical standards for 2024 are ESRS E1 Climate Change, ESRS E5 Resource use and circular economy, ESRS S1 Own workforce, ESRS S2 Workers in the value chain, ESRS S4 Consumers and end-users, and ESRS G1 Business conduct; ESRS E2, E3, E4 and S3 were assessed and found not material. No specific industry standard was identified. Material IROs, their current and anticipated effects, value chain location, activities and time horizon are listed within each material standard. The report explains business model resilience in a rapidly changing environment, with the Audit and Control Committee responsible for risk supervision, and links material impacts to the strategy pillars (transform the customer relationship, the operating model, and long-term value) and business model. Current significant financial effects of material risks and opportunities that occurred in 2024 are detailed within the corresponding standards (pages 46 to 52).

In 2024 Telefonica updated its double materiality process in line with CSRD Directive 2022/2464, Delegated Regulation 2023/2772 (ESRS), and EFRAG implementation guides IG1 (Materiality Assessment) and IG2 (Value Chain). A four-stage process was followed: context analysis, identification and assessment of impacts, risks and opportunities (IROs), consolidation, and validation. Context analysis started from the list of topics, subtopics and sub-subtopics in AR 16 of ESRS 1, drawing on internal sources (value chain, human rights and environmental due diligence, socio-economic contribution report, natural capital report, Climate Action Plan 2024, Company strategy, risk management model and risk map, and 2023 materiality) and external sources (ESG regulatory context, industry peers, analysts and investors such as MSCI, Moody's, S&P and Sustainalytics, sectoral reports and SASB sector materiality). Positive impacts drew on the Socio-economic Contribution Report and were monetised using guidance from HBS, the Value Balancing Alliance, WBCSD and the Capitals Coalition. Negative impacts started from the Human Rights and Environmental Impact Assessment and the 2023 Due Diligence Process. Impacts were assessed by magnitude, probability, scope, scale, irremediability and time horizon, with greater weight to severity for human rights. Risks and opportunities were assessed through the ERM and a proprietary strategy-team methodology. The process is reviewed annually and supported by internal controls (pages 46 to 54).

In accordance with paragraph 56 of ESRS 2, the report lists the disclosure requirements met and their location in the Sustainability Report. For ESRS 2 general disclosures: BP-1 and BP-2 are in section 2.1; SBM-1 in section 2.2; SBM-2 in section 2.2.4; SBM-3 in section 2.3; IRO-1 in section 2.3.1.2; IRO-2 in section 2.7; GOV-1 in section 2.4.2; GOV-2 in section 2.4.3; GOV-3 in section 2.4.4; GOV-4 in section 2.5; and GOV-5 in section 2.4.5. Datapoints derived from other EU legislation are set out in section 2.6. The topical disclosure requirements listed correspond to the material standards: ESRS E1 Climate Change (including E1-1 to E1-8, in sections 2.9), ESRS E5 Resource use and circular economy (E5-1 to E5-5, sections 2.10), ESRS S1 Own workforce (S1-1 to S1-17, sections 2.11), ESRS S2 Workers in the value chain (S2-1 to S2-5, sections 2.12), ESRS S4 Consumers and end-users (S4-1 to S4-5, sections 2.13), and ESRS G1 Business conduct (G1-1 to G1-5, sections 2.14). Each entry maps the ESRS code and disclosure requirement to its section reference (pages 71 to 73).

Telefonica's Climate Action Plan (CAP) is the Company's transition plan for mitigating and adapting to climate change and sets out its energy and climate strategy (pp. 87-88). The strategy and business model are stated to be compatible with the transition to a low-carbon economy and the 1.5C scenario of the Paris Agreement. The CAP is Telefonica's roadmap to reach net zero emissions by 2040 across Scopes 1, 2 and 3, including value chain emissions, with short- and medium-term targets validated by the Science-Based Targets initiative (SBTi). The plan defines decarbonisation levers and specific mitigation and adaptation actions. To reduce operational (Scopes 1 and 2) emissions it relies on an Energy Efficiency Plan and a Renewable Energy Plan; for Scope 3 it fosters cooperative action with suppliers and circularity criteria. The CAP is approved annually by the Board of Directors following analysis by the Sustainability and Regulation Committee. Locked-in emissions from key assets are considered not relevant to achieving net zero by 2040, and Telefonica states it has no assets or activities incompatible with the transition to a carbon-neutral economy (pp. 92-94).

Telefonica addresses climate change mitigation, adaptation and energy efficiency through two board-level policies (pp. 95-96). The Global Environmental and Energy Policy sets guidelines to improve environmental and energy performance globally and locally, reflecting the commitment to consume energy efficiently and reduce GHG emissions to progress towards net zero emissions by 2040, including in the value chain. Its objectives cover legal compliance, reducing environmental impact, collaborating with suppliers to reduce their carbon emissions, managing climate-related impacts, risks and opportunities, and fostering digital solutions for environmental challenges. Under the policy, all Group companies must define science-based and externally validated short-, medium- and long-term Scopes 1, 2 and 3 reduction targets, transition to 100% renewable electricity consumption in their own operations, reduce fossil fuel use, offset or neutralise residual emissions, minimise the impact of refrigerant gases and promote energy efficiency. The Supply Chain Sustainability Policy establishes minimum sustainability requirements for suppliers on climate change mitigation and energy efficiency, requiring suppliers to set GHG reduction targets for the next three years, preferably science based. Further policy details appear in section 2.15.

Telefonica defines decarbonisation levers and adaptation and mitigation actions to meet its reduction targets (pp. 96-104). The levers are energy consumption (Renewable Energy Plan and energy efficiency projects), supplier engagement and circular economy of equipment. From a base year GHG figure of 4,666,699 tCO2e (Scopes 1+2+3), the levers achieved reductions of 2,429,087 tCO2e in 2024 (energy consumption -1,690,882; supplier engagement -546,900; circular economy and others -191,305), with expected further reductions of 837,612 tCO2e by 2030. The seven actions are: the Renewable Energy Plan, energy efficiency projects, supplier engagement, circular economy of equipment, business continuity plans, insurance programs and coverage for climate-related events, and products aimed at decarbonising the economy. In 2024 Telefonica invested 2,444 million euros in network transformation and modernisation and 33 million euros in data-driven GHG-reduction solutions, and held renewable energy purchase commitments (PPAs) of 1,033 million euros. Its Eco Smart and connectivity services helped customers avoid an estimated 17.4 million tonnes of CO2e in 2024 (these avoided emissions do not reduce Telefonica's own footprint).

Telefonica's overarching target is net zero carbon emissions by 2040, reducing all emissions (Scopes 1, 2 and 3) by at least 90% versus the base year and neutralising unabated emissions through high-quality carbon credits (pp. 105-107). Interim absolute targets: reduce Scopes 1+2 by 90% by 2030 (base year 2015, 1,811,155 tCO2e), brought forward to 2025 for main markets (Spain, Brazil, Germany); reduce Scope 3 by 56% by 2030 (base year 2016, 2,855,544 tCO2e); reach 100% renewable electricity in own facilities by 2030; and reduce energy consumption per unit of traffic by 95% by 2030 versus 2015. Performance in 2024: Scopes 1+2+3 down 52.1% (2,237,611 tCO2e); Scopes 1+2 down 84.8% (275,201 tCO2e); Scope 3 down 31.3% (1,962,411 tCO2e); renewable electricity 89.1% (+71.9 pp from a 17.2% base); Scopes 1+2 in main markets down 95.0% (50,704 tCO2e); energy per unit of traffic down 90.1% (from 386 to 38 MWh/PetaByte). Targets are absolute, science-based (Absolute Contraction Approach, SBTi Corporate Net-Zero Standard) and validated externally.

In 2024 Telefonica's total energy consumption was 6,059,374 MWh, of which over 95% came from the telecommunications network (p. 107). Energy from fossil sources was 850,950 MWh (electricity/heat/steam/refrigeration purchased from fossil sources 646,321 MWh; fossil fuel consumption 204,629 MWh). Energy from renewable sources totalled 5,208,424 MWh, comprising 5,136,685 MWh of purchased electricity, heat, steam or refrigeration from renewable sources, 64,361 MWh of renewable fuel and 7,377 MWh of self-generated renewable energy. Fossil fuels represented 14% of total energy consumption and renewable sources 86%. Consumption of renewable energy reached 89% of total electricity consumption in Telefonica facilities in 2024, up 6% on the prior year. Electricity consumption in Telefonica Spain, Brazil, Chile and Peru is 100% renewable. Telefonica is a member of RE100 and pursues power purchase agreements (PPAs) and photovoltaic self-generation. Energy consumption per unit of traffic in 2024 was 38 MWh/PetaByte, an improvement of about 90% versus 2015.

Telefonica calculates its carbon footprint using the GHG Protocol Corporate Accounting and Reporting Standard (pp. 108-111). In 2024 total GHG emissions were about 2.2 million tCO2e (Scope 1 + Scope 2 market-based + Scope 3 = 2,237,611 tCO2e). Scope 1 was 122,874 tCO2e (5%), Scope 2 market-based 152,327 tCO2e (7%; location-based 939,452 tCO2e) and significant Scope 3 was 1,962,411 tCO2e (88% of the footprint). Scope 3 categories: Purchased products and services 1,066,137; Capital goods 208,494; Energy-related activities 89,585; Business travel 41,418; Use of sold products 556,777 tCO2e. Versus base years, Scope 1 (2015 base 286,201) fell 57%, Scope 2 market-based (2015 base 1,524,954) fell 90%, and Scope 3 (2016 base 2,855,544) fell 31.3%. Scope 2 dropped 29% year on year. 72% of Scope 3 was calculated from primary data. GHG intensity was 0.000073 tCO2e/euro (location-based) and 0.000054 tCO2e/euro (market-based) against consolidated revenues of 41,315 million euros.

Telefonica's net zero target follows the SBTi Corporate Net-Zero Standard, neutralising unabated residual emissions (a maximum of 10% by 2040) through cancellation of high-quality carbon credits, and supporting Beyond Value Chain Mitigation (BVCM) before 2040 (pp. 111-113). Since 2019 it has financed climate change mitigation outside its value chain via carbon credits from nature-based projects. In 2024, 37,655 tCO2e of carbon credits were cancelled, with 100% of the projects used being biogenic sinks; 68% came from emissions reduction projects (REDD+) and the remainder from carbon removal projects (ARR). By company the cancellations were Telefonica Germany 4,901, Telefonica Brazil 26,350, Telefonica Spain 5,104 and Telefonica S.A. 1,300 tCO2e; 99% carried the Verra Registry standard. Telefonica offset 72% of Scopes 1 and 2 emissions in its main markets and 14% globally in 2024. Meeting the 2025 main-markets offset target implies cancelling 295,000 carbon credits between 2025 and 2030, supported by a multi-country, multi-annual purchase awarded in 2022. Reduction targets themselves are absolute and exclude offsetting.

Telefonica applies an internal carbon price (shadow price) to guide procurement towards low-carbon options (pp. 113). When purchasing energy-using equipment (electricity and/or fuel) or equipment containing fluorinated gases, the shadow price is incorporated into the Total Cost of Ownership calculation, so that the purchase price, the energy used and the emissions generated over the asset's lifetime are all considered, favouring more efficient equipment with fewer operational emissions. Its application is defined in the Corporate Low Carbon Procurement Instruction, which specifies eligible product categories above a threshold, and is applied across all regions in which the Group operates. The price is expected to reduce Scopes 1 and 2 emissions. To set the value, Telefonica reviewed carbon price literature and trends, including IEA carbon price projections, EU emissions allowance (EUA) prices and Carbon Pricing Leadership Coalition trends, which showed prices ranging between USD 50/tCO2e and USD 100/tCO2e, while the average internal shadow price disclosed via CDP was USD 28/tCO2e. It also drew on its own Voluntary Carbon Market purchasing experience. The internal carbon price was set at 30 euros/tCO2e.

Telefonica reports its circular economy policies in section 2.10.1.1 (pages 115-116). Full MDR-P information is gathered in section 2.15 Policies of the Sustainability notes. Two policies are described. The Global Environmental and Energy Policy commits the Company to reducing its environmental footprint through fundamental principles of responsible network deployment and operation, pollution prevention, and efficient use of resources and the circular economy. It aims to maximise circular economy opportunities by collaborating with suppliers on eco-efficiency measures, reducing waste generation by reusing and recycling electronic equipment, using digitalisation to improve traceability and reverse logistics, and promoting digital products that address environmental challenges. The Supply Chain Sustainability Policy establishes that suppliers must implement preventive measures across the whole life cycle, from raw material extraction, manufacturing and transportation to waste management and final destination. Suppliers must facilitate eco-efficiency practices such as energy efficiency, incorporating recycled or less polluting materials, and enabling reusability, repairability and durability. The policy also requires eco-efficiency criteria for scarce resources such as water, reduction of polluting gas emissions, and a reduction in single-use plastics in Telefonica-branded products (Movistar, Vivo, O2).

Section 2.10.1.2 Action plans (pages 116-117) describes actions to become a Zero Waste company by 2030 and meet circular economy commitments, focused on minimising waste impact, promoting reuse and recycling, and reducing hazardous waste. Four main actions are reported. (1) Reuse of customer-premises equipment (B2C/B2B routers and set-top boxes) via a device-as-a-service model, rolled out to fixed-service operators in Spain, Brazil, Germany, Argentina, Chile, Colombia and Peru, including the VICKY blockchain initiative. The expected outcome was reuse of 90% of routers and set-top boxes delivered for refurbishment by end of 2024; in 2024 the Company reused more than 4 million routers and set-top boxes, equal to 91.4% of equipment delivered for refurbishment. (2) Reuse of mobile devices through buyback, refurbished sales, repair, leasing reuse and the MARA program, in Germany, Spain, Brazil and Hispanoamerica; a long-term target of over 500,000 mobile phones reused by 2030, with 437,180 devices reused in 2024. (3) Prioritise reuse of network equipment (for example the MAIA marketplace); 533,818 items were reused in 2024. (4) Recycle 100% of waste when reuse is not possible, expected to recycle over 95%, with 94% recycled in 2024. Telefonica invested 612 million euros CapEx and 27 million euros OpEx on related Taxonomy activities.

Section 2.10.2.1 Targets (pages 118-119) reports Telefonica's principal Zero Waste target: to reuse and recycle 100% of the total waste generated by 2030. Performance in 2024 was that 95% of the waste generated was reused and recycled. This is a quantifiable and relative target covering all material impacts, risks and opportunities related to the circular economy, aligned with the Global Environmental and Energy Policy. The scope includes hazardous and non-hazardous waste generated as part of operations and delivered for recycling to authorised managers. The geographic scope is regional, covering all companies with fixed or mobile telecommunications infrastructure. The value chain stages involved are the operations stage (waste management from activity) and the downstream after-sales stage (reverse logistics for devices, handling customers' electronic waste). Because no common Zero Waste criteria or scientific benchmark exist, the target was defined using GSMA sectoral definitions of Zero Waste and aligned with the EU circular economy action plan and the waste hierarchy in the Waste Framework Directive (2008/98/EC). No interim targets have been set. The target is a percentage calculated on current-year values, so no benchmark values or base year apply, and no changes have occurred to the target, metrics or methodologies. All commitments are voluntary and apply to all countries where it operates.

Section 2.10.2.2 Products and materials / resource inflows (page 119) reports that Telefonica does not have production processes for manufacturing equipment and therefore does not directly consume materials. The main resource inflows come from the procurement of products that have already been manufactured, mainly electronic equipment. These are, in particular: customer-premises equipment such as routers and set-top boxes; mobile devices; network equipment such as antennas and other equipment associated with the telecommunications network infrastructure, including cables; and electronic office equipment. Because the Company procures already-manufactured products rather than consuming raw materials directly, it does not report resource inflow tonnages for own production in this subsection. The disclosure is tagged E5-4_01 and cross-references the related waste and outflow data reported in the following Waste subsection (2.10.2.3).

Section 2.10.2.3 Waste / resource outflows (pages 119-120) reports 2024 waste data collected through the GReTel digital tool. In 2024, 59,233 tonnes of waste were generated, including cables, batteries, paper and electronic waste, of which 94% was recycled. Network infrastructure maintenance is the main waste-generating activity, exceeding waste from offices or e-waste collected from customers. The waste consists mainly of cables and electronic equipment from network transformation, largely copper and fibre optic cables, containing metals such as steel, aluminium, iron and copper, plus ceramics, polymers, fibre glass and printed circuit materials. Of the electronic equipment collected, 69% was reused (preventing it from becoming waste), 30% was recycled, and 1% underwent other treatment and disposal. Non-recycled waste totalled 3,841 tonnes, or 6%. Waste data is obtained by consolidating volumes reported directly by the waste management provider, so there are no significant methodologies or assumptions; for reused equipment, information is collected in units and a weight-per-unit conversion factor is applied. Reuse data is excluded from total waste generated as reused equipment has not yet reached the end of its useful life.

The 2.10.2.3 Waste subsection (page 119) provides the following 2024 waste tonnages, split into non-hazardous and hazardous waste. Total waste generated was 59,233 t (53,282 t non-hazardous; 5,951 t hazardous). Total waste generated plus reuse was 70,402 t (64,451 t non-hazardous; 5,951 t hazardous). Waste diverted from disposal (including recycling, reuse, energy recovery and other treatments) was 68,366 t (62,470 t non-hazardous; 5,896 t hazardous). Waste destined for disposal (including incineration and landfill) was 2,036 t (1,981 t non-hazardous; 55 t hazardous). By treatment breakdown: reused equipment 11,169 t (all non-hazardous); recycled waste 55,392 t (50,130 t non-hazardous; 5,262 t hazardous); waste for energy recovery 843 t (324 t non-hazardous; 520 t hazardous); other treatment 962 t (847 t non-hazardous; 115 t hazardous); incinerated waste 17.4 t (5.6 t non-hazardous; 12 t hazardous); waste sent to landfill 2,018 t (1,975 t non-hazardous; 43 t hazardous). Non-recycled waste was 3,841 t, equal to 6%. Overall, 94% of the waste generated was recycled. The waste-generated figure excludes reuse because reused equipment has not yet reached the end of its useful life.

Telefonica reports (section 2.11.2.1, page 125-126) that it maintains a large number of internal policies and standards addressing the management and resolution of material incidents, risks and opportunities related to all its employees without exception. The Global Human Rights Policy is based on the UN Guiding Principles on Business and Human Rights, the OECD Guidelines and core ILO conventions, and sets out a commitment to respect human and labour rights including the prohibition of human trafficking, forced labour and child labour. Additional policies include the Global Occupational Health, Safety and Well-being Regulation, the Global Equality Policy (opposing all forms of harassment), the Global Diversity and Inclusion Policy (covering nationality, ethnic origin, marital status, religion, age, disability, gender, sexual orientation and gender identity, among other factors), and the Global Privacy Policy governing processing of employee personal data. Local action protocols adapted to applicable legislation address workplace, moral and sexual harassment and discrimination. The Company's approach to engagement is based on transparency, inclusion and continuous improvement, with open communication policies and regular surveys. Employees can raise questions via the Queries Channel and report suspected human rights violations anonymously through the Whistleblowing Channel.

Telefonica reports (section 2.11.2.2, pages 126-127) that it fosters active engagement and collaboration with employees and their representatives. Information gathered through surveys, meetings and other channels is analysed and used to make decisions and implement measures on actual and potential workplace incidents; results of the annual employee survey are presented to the Company's executive committee. Employee feedback is collected through regular surveys, feedback meetings and open communication channels, and information from workers' representatives is gathered through regular meetings. Collaboration is managed locally, so phases, types and frequency vary by country and business unit, and include feedback meetings, an annual global survey, and ad-hoc working groups. Collaboration with employee representatives involves joint committees convened quarterly, annually or monthly. For high-impact agreements such as collective bargaining, the highest-ranking official involved is the Human Resources Director of each business; for global agreements ultimate responsibility lies with the Group's Global Chief People Officer. The Company recognises UNI Global Union (UNI) and the European Works Council (EWC) as key partners, holding meetings annually with UNI and every six months with the EWC. Effectiveness is measured through the annual motivation survey (anonymous, analysed by a third party) and the agreements reached with representatives.

Telefonica reports (section 2.11.2.3, pages 127-128) that it takes a proactive approach to remediating actual material adverse impacts affecting employees. Employees can report incidents through the Whistleblowing Channel, where incidents are thoroughly analysed and corrective measures implemented. The Company provides several channels for employees to express concerns, needs and suggestions: (1) motivation surveys conducted globally on a regular basis; (2) internal communication channels such as digital platforms, bulletins and portals; (3) regular meetings with team leaders; (4) the Whistleblowing Channel, available anonymously and managed confidentially, for reporting concerns about compliance, work ethics or misconduct; (5) local health and safety and equality committees; (6) a network of trade union delegates and workers' representatives; (7) Human Resources Departments providing accessible contact points; (8) meetings with the heads of the organisation, held at both group and local level; and (9) a Privacy Mailbox through which employees can raise concerns about the processing of their personal data and exercise data protection rights. All reported incidents are managed in accordance with established procedures and deadlines. Further detail on the Queries (Responsible Business) Channel and Whistleblowing Channel is provided in section 2.14.3.2.

Telefonica reports (section 2.11.2.4, pages 128-131) that all actions have a global scope but are implemented and adapted by operators to local needs, falling within the supporting activities stage of the value chain. Time horizons are set on short, medium and long-term bases and assessed through key indicators, internal audits and satisfaction surveys. A Global Human Resources Committee, made up of the heads of the People area of the main operators and regions, meets monthly to review progress towards targets. Actions to mitigate negative impacts on equal treatment (S1_IN01) include inclusion and diversity policies, equitable selection and promotion processes overseen by a Transparency Committee (chaired plus four senior executives) ensuring both genders on final shortlists, regular pay audits, professional development programs for women, participation in the UN Global Compact and Women's Empowerment Principles, inclusive leadership training and flexible working policies. Positive-impact actions cover secure employment (prioritising permanent contracts, young talent programs), pay reviews, digital disconnection, social dialogue with UNI and the EWC, preventative health and safety, training and reskilling via Skills Workforce Planning, anti-harassment protocols and diversity and inclusion initiatives. For the health and safety risk in Ecuador and Chile (theft, vandalism, riots; S1_RI01), operators implemented a physical security plan, 24/7 security operations centres, audits and communication channels. The Company allocates human, financial, technological and infrastructure resources and budget for audits and labour improvements.

Telefonica reports (section 2.11.3.1, pages 131-133) targets related to managing material IROs. For equal treatment and opportunities (S1_IN01), the main metric is representation of women in executive positions, with a target of 37% of executive positions held by women by 2027. Interim targets are 33.4% for 2024 and 34.6% for 2025; against a 2020 baseline of 27.4%, performance at year-end 2024 was 34% (monitored monthly). For working conditions, diversity and training (S1_IP01, S1_IP04, S1_IP06), the metric is employee satisfaction, with a target to maintain the employee Net Promoter Score (eNPS) above 70 points across the 2024-26 strategic plan; against a 2019 baseline of 58.4 points, the eNPS reached 75 points in 2024. For training and skills development (S1_RI02), the goal is to reduce the skills and profiles gap identified in the annual Skills Workforce Planning process (2020 baseline). For the health and safety risk (S1_RI01), the target is to reduce physical security incidents and increase the percentage of employees trained in physical security, with a 2022 baseline; in 2024 no security incidents were recorded in Ecuador, while there were three incidents related to vehicle theft in Chile. For privacy metrics (S1_RI03, S1_IN02), target-setting is deemed not applicable given the variability of penalties.

Telefonica reports (section 2.11.3.2, pages 133-134) that at year-end 2024 it had 100,870 total employees (head count). By gender: 60,992 men, 39,874 women, 1 categorised as other and 3 not defined. By country (those exceeding 10% of the total): Brazil 36,200, Spain 25,086 and Argentina 10,221. By contract type: 99,431 permanent employees (59,995 men, 39,432 women, 1 other, 3 not defined) and 1,439 temporary employees (997 men, 442 women); there were no non-guaranteed hours employees. The number of employees who left the Company in 2024 was 15,725, and employee turnover was 16%. Own employees are defined as workers with a direct employment relationship with entities in the Telefonica Group scope who are recorded as a personnel expense of the employer entity. The number of employees is reported in head count terms as of year-end 2024, based on information provided by each business unit. Further detail is provided in Note 26, 'Workforce' section, of the Consolidated Financial Statements.

Telefonica reports (section 2.11.3.3, pages 133-134) on collective bargaining coverage and social dialogue for countries with more than 50 employees representing over 10% of total employees. For collective bargaining coverage within the European Economic Area (EEA), Spain falls in the 60-79% band. For non-EEA employees (estimate for regions above the threshold), Brazil falls in the 80-100% band and Hispam in the 40-59% band. For social dialogue and workplace representation (EEA only), Spain falls in the 80-100% band. Telefonica has an agreement with the European Works Council (EWC) and with UNI Global Union (UNI), which it recognises as key partners in the management of international labour relations. The Company is committed to the core ILO standards, particularly regarding freedom of association and the right to collective bargaining in all the countries in which it operates.

Telefonica reports (section 2.11.3.4, page 134) diversity metrics. During 2024, the number of women at Top Management level at the Company was 1, and the percentage of women out of the total number of Top Management members was 20%. Top Management is defined as executives who carry out senior management duties de facto or de jure and report directly to the Board of Directors, the Executive Committees or managing directors, including in any case the head of Internal Audit. On age distribution (head count, 2024): 13,301 employees were under 30 (13%), 64,812 were between 30 and 50 (64%), and 22,757 were over 50 (23%).

Telefonica reports (section 2.11.3.5, page 135) that all of its own employees receive a wage that is above the local minimum wage.

Telefonica reports (section 2.11.3.6, page 135) health and safety metrics for 2024. The percentage of employees covered by a health and safety management system was 97%. No fatalities were recorded as a result of work-related injuries and work-related ill health among employees, and the number of fatalities as a result of work-related injuries and work-related ill health of other workers working on Company sites was 0. The number of recordable work-related accidents in 2024 was 720, and the rate of recordable work-related accidents was 3.61 accidents per million hours worked.

Telefonica reports (section 2.11.3.7, page 135) remuneration metrics. The gender pay gap in 2024 was 16.19%, obtained by calculating the difference between the total average remuneration of men and the total average remuneration of women at the organisation, without taking into account other aspects that would enable comparability. The ratio of the annual total remuneration of the Executive Chairman (CEO) to the median annual total remuneration for all employees in 2024 was 111:1. To calculate this ratio, the total remuneration accrued by the Executive Chairman in 2024 was used, including fixed remuneration, short-term variable pay, long-term incentive and benefits, with the same elements considered for all active Group employees as at 31 December 2024. To account for purchasing power differences between countries, the median total remuneration in each country was adjusted using the relationship between the local minimum wage and the minimum wage in Spain, and the weighted average of all medians was calculated to obtain the final figure.

Telefonica reports (section 2.11.3.8, page 135) that in 2024 a total of 62 cases of discrimination and/or harassment were reported. These comprise 55 complaints filed through the Whistleblowing Channel, which were analysed and found to be substantiated, plus 7 cases of litigation for inequality/discrimination brought during the reference period. There were 992 complaints filed through the Whistleblowing Channel in total in 2024; because the channel allows anonymous complaints, it is not possible to identify what percentage came from Telefonica's own employees. No complaints in relation to Telefonica were filed through the National Contact Points for OECD Multinational Enterprises in 2024. The economic value of the discrimination and/or harassment lawsuits brought during 2024 is described as not significant. No severe human rights incidents were recorded in 2024 through the Whistleblowing Channel, the internal lawsuit reporting tool or the ESG RepRisk platform.

Telefonica's commitment to human rights in the value chain stems from its Global Human Rights Policy, but is mainly implemented through the Supply Chain Sustainability Policy, which acts as a code of conduct for suppliers (pages 138-139). This policy sets the minimum criteria suppliers must comply with, including respect for workers' human rights, working hour regulations, a safe work environment and facilitating unionisation and collective bargaining. It aligns with the UN Guiding Principles on Business and Human Rights, the Universal Declaration of Human Rights, OECD guidelines and ILO conventions. Supporting policies include the Global Human Rights Policy, the Occupational Health, Safety and Well-being Regulation, the Global Privacy Policy, the Global Security Policy and the Workplace Risk Instruction for the Procurement of Works and Services (ICC001). Commitments are enforced through a global due diligence process grounded in the UN Guiding Principles, used to identify, prevent, mitigate and remedy potential or actual negative impacts. These policies cover the workers of suppliers within the scope set out in the Policies table in section 2.15.

Telefonica states it cannot engage directly with third-party workers due to employment law constraints, so it uses indirect initiatives to gather their perspectives (pages 143-144). First, worker interviews are conducted during on-site audits at direct and indirect suppliers' factories to verify information and ascertain worker views; through the Joint Alliance for CSR (JAC), employees are interviewed during each supplier audit, in some cases via anonymous mobile surveys. Second, Global Framework Agreements (GFAs) are used each year to promote workers' rights; Telefonica recognises UNI (Global Union) and the European Works Council (EWC) as key partners, with agreements covering freedom of association and collective bargaining and enabling direct contact and continuous improvement. Third, dialogue with stakeholders through proxies such as NGOs and business partners occurs via interviews at global and local levels, informing gap analysis and improvement plans. Telefonica also participates in forums and multi-stakeholder platforms. Operational responsibility is shared among the Global Sustainability, Global People and Corporate Procurement Departments, with engagement forming part of the Responsible Business Plan approved by the Executive Committee.

Telefonica provides remediation processes and engagement channels for workers in the value chain (pages 142-143). As set out in the Supply Chain Sustainability Policy, the Queries (Responsible Business) Channel and the Whistleblowing Channel are made available to workers in the value chain and are publicly available on Telefonica's website. The Queries Channel lets stakeholders raise questions on Responsible Business matters, while the Whistleblowing Channel, part of the Internal Information System, allows employees, executives and third parties such as value chain workers to report potential irregularities or breaches. To improve accessibility and awareness, the Sustainability Policy requires suppliers to promote both channels among workers and subcontractors, provide training on minimum social standards and the channels, and implement internal procedures aligned with the policy. As part of due diligence, Telefonica carries out periodic human rights impact assessments that include interviews with proxies for value chain workers, conducted by external experts without Telefonica present, with results aggregated and anonymised for objectivity. Proactive remediation also occurs through the annual audit plan (see Action Plan 4, On-site audits).

As part of its due diligence, Telefonica undertakes four actions to prevent, mitigate and remedy negative impacts and promote positive impacts for value chain workers (pages 139-142): 1) contractual clauses, 2) potential risk analysis, 3) external sustainability assessments, and 4) on-site audits. 100% of suppliers in the Telefonica Procurement Model (MCT) must accept clauses upholding human and labour rights. Potential risk analysis, applied to all suppliers, prioritises higher-risk suppliers based on country of origin and product or service type. High-risk suppliers must undergo an external 360-degree assessment based on 15 sustainability criteria via the IntegrityNext platform. On-site audits run through two programs: the Allies Program (high-risk direct suppliers in Europe, Brazil and Hispanoamerica) and the JAC sectoral audits (direct and indirect manufacturers, mainly in Asia). JAC unites Telefonica and 29 other telecommunications operators. Improvement plans are agreed with non-compliant suppliers, and protocols within JAC and Allies audits ensure remediation of non-conformities (for example on freedom of association, health and safety, training, working time, work-life balance and privacy). No serious human rights incidents involving value chain workers were recorded in 2024. Managing these impacts is cross-cutting, so no specific resources are defined.

Telefonica has set targets to manage the material IROs related to workers in the value chain and to monitor progress of its key actions (page 144). Targets were developed by internal experts in continuous contact with value chain workers, their legitimate representatives or credible spokespersons via the engagement channels. The first target relates to the Supply Chain Sustainability Policy: ensure that 100% of awarded suppliers accept the policy within the year as part of the Procurement Model applied across the Telefonica Group. By accepting, suppliers commit to its clauses, including undergoing sustainability assessments and on-site audits at Telefonica's request. The second target relates to potential risk: analyse the potential risk of all suppliers managed within the Procurement Model, based on Telefonica's internal sustainability risk methodology. Both targets are set at 100%, are measured annually with the unit of measurement being the number of suppliers, and have no past baseline year. The target scope for the year includes all suppliers awarded through the procurement system with impact in the 2024 financial year. Progress is reported in section 2.12.2.2 and section 2.14.5 Suppliers.

Telefonica's policies for consumers and end-users include the Global Privacy Policy, the Regulation of the Governance Model on Personal Data Protection, the Regulation on Requests by Competent Authorities, Telefonica's Artificial Intelligence Principles (AI code of conduct), the Regulation of the Governance Model on Artificial Intelligence, the Responsible Business Principles, the Global Human Rights Policy, the Diversity and Inclusion Policy, the Queries Channel Management Policy and the Internal Information System Management Policy and Procedure (pages 149-150). For the specific vulnerable subgroups, the Responsible Business Principles, Global Human Rights Policy and Diversity and Inclusion Policy stand out. On human rights, the material issues addressed are privacy, security and the responsible development and use of products and services, with commitments to protection of minors and non-discrimination. The Global Human Rights Policy is based on the UN Guiding Principles on Business and Human Rights and aligns with instruments including the UN Universal Declaration of Human Rights, the UN Global Compact, OECD Guidelines, ILO core conventions, the Convention on the Rights of the Child, the Convention on the Rights of Persons with Disabilities and the GNI principles. In 2024 no cases of non-compliance with the UN Guiding Principles, ILO Declaration or OECD Guidelines involving consumers or end-users were reported in the downstream value chain.

Telefonica states that the views of consumers and end-users form the basis for decision making and for managing material impacts (pages 150-151). Ongoing, direct engagement occurs during the marketing, service use and after-sales stages via phone lines, website and mobile applications. Customer perception studies are run through regular surveys with Group operators, from which the Net Promoter Score (NPS) is derived, giving insight into consumer satisfaction and trust; results are shared with main decision-making bodies. Fundacion Telefonica annually prepares the Digital Society in Spain report covering privacy and technology adoption. The Quality and Customer Experience Departments oversee survey management, while Channel Departments manage communication channels; results and action plans are submitted to the Executive Committee. A target NPS indicator is defined annually and is incorporated into the variable remuneration of eligible employees at Telefonica S.A. and the operators in Spain, Germany, Brazil and Hispanoamerica. To understand vulnerable consumers, a human rights impact assessment is conducted within the Due Diligence Process. Telefonica works with associations representing people with disabilities (in Spain, CNSE, Fundacion DKV Integralia and Fundacion ONCE, and it signed the INSERTA Agreement), and supports The Valuable 500 and the GSMA disability inclusion principles, plus AI initiatives with the EU AI Office, UNESCO, GSMA and OECD.

Telefonica takes a proactive approach to remediation for consumers and end-users through a process covering receipt of the request, analysis of information gathered, assignment and escalation, corrective and proactive action, and closing the loop by contacting the customer again (pages 151-153). Engagement channels, per the Responsible Business Principles, include proprietary telephone channels, in-person channels through Telefonica and third-party shops, proprietary digital channels (commercial websites and apps such as Mi Movistar), social media, and second-instance channels (Customer Defence Service in Spain, Ouvidoria in Brazil). For privacy matters, data protection mailboxes, Data Protection Officers and third-party mechanisms (AUTOCONTROL voluntary mediation in Spain, and the AEPD-approved AUTOCONTROL Code of Conduct) are available. The public Queries Channel and the Whistleblowing Channel are also accessible. Channel availability is improved through technological systems, wider channels including WhatsApp, agent training, satisfaction surveys and audits. Alongside the NPS, the Customer Effort Score (CES) and the Customer Satisfaction Index (CSI) assess channel satisfaction, with CSI used for provider remuneration. Global and Local Transparency Centres give clear information on personal data handling. Whistleblower confidentiality and anonymity are protected under the Internal Information System Management Policy.

Action plans are split into Privacy and Access to products and services (pages 153-161). Privacy actions: Global Privacy Governance (specialised teams, Operational Domains, Binding Corporate Rules), privacy risk assessment, continuous cooperation with Security areas and CSIRTs, the Transparency Centre, and training. The Digital Privacy Framework was integrated via the Kernel platform in Spain, Germany and Brazil. Privacy metrics for 2024: 351 proceedings opened for privacy or data protection issues with a sanction or complaint; 9 confirmed final fines; and total confirmed fines of 1,009,252 euros. Access actions: connectivity deployment focused on rural areas, affordability via Universal Service Funds, Responsibility by Design (accessibility and AI bias control), customer service and experience, and expanding cybersecurity. In 2024 Universal Service Fund contributions totalled 138 million euros (Argentina, Brazil, Colombia, Ecuador, Peru, Venezuela). Coverage metrics: Group 4G 90.8%, 5G in Spain 90.8%, Brazil 61.1%, Germany 97.2%; rural mobile broadband coverage Germany 99.4%, Brazil 83.5%, Spain 95.0%; Group FTTH premises 79,925,100. Six strategic products were assessed under Responsibility by Design. NPS reached 33 in 2024. Wayra invested in 1,168 startups (948 direct, 237 through funds) across more than 10 countries; Telefonica became a UN PRI signatory in February 2024. No serious human rights cases involving consumers were identified in 2024.

Targets are reported for access to products and services, while target-setting for privacy sanctions is deemed not applicable due to the variable, unpredictable nature of penalties and sanctioning procedures (pages 156, 162-164). For fixed broadband, the target is to reach 90 million FTTH premises by 2026, using 2023 (72 million) as the baseline; performance in 2024 was 80 million premises reached, up from 72 million in 2023. For mobile broadband, the target is 5G SA network coverage by 2026 of 90% in Spain, 60% in Brazil and 99% in Germany; the 2023 baseline was 87% Spain, 48% Brazil and 94% Germany. In 2024, 5G coverage reached 90.8% in Spain, 61.1% in Brazil and 97.2% in Germany, meeting the target two years early in Spain and Brazil. Customers do not participate in setting these targets. For consumer satisfaction, the NPS target is to increase the Net Promoter Score each year; it has been monitored since 2017 and is linked to variable remuneration and the strategic plan. The 2024 NPS growth target versus 2023 was achieved, with Group NPS 33, B2C NPS 27 and B2B NPS 51. NPS undergoes internal validation and external auditing through a dual assurance process.

Telefonica reports its corporate culture and business conduct policies in section 2.14.3 (pp. 169-170). The Group is guided by the values of integrity, commitment and transparency, and its code of ethics and conduct, the Responsible Business Principles (RBPs), is structured around 10 areas including ethical and responsible management and responsible supply chain management. Telefonica has been a UN Global Compact signatory since 2002. It operates a Queries (Responsible Business) Channel available 24/7 in Spanish, English, German and Portuguese, and an Internal Information System incorporating a Whistleblowing Channel to detect, report and investigate unlawful acts or conduct contrary to the Code of Conduct. Whistleblower protection and the prohibition of retaliation are set out in Section 6 of the Internal Information System Management Policy, aligned with Directive (EU) 2019/1937. On training, the Company trains all staff annually in the RBPs and Human Rights through a mandatory online course; new employees must complete it within three months of joining. Since the 2022 edition (valid three years), 90,725 employees have been trained. Short-term variable remuneration includes 20% weighting on sustainability indicators, and long-term variable remuneration for senior management includes 10%.

Telefonica reports supplier management under G1-2 in section 2.14.5 (pp. 175-177). It applies a Procurement Model (MCT) aligned with the RBPs and the OECD Due Diligence Guidance. In 2024 the Company awarded a contract volume of 24,202 million euros to 8,440 suppliers, of which 85% went to local suppliers. Management follows four steps. Step 1: suppliers must sign an anti-corruption certificate (applied to 100% of suppliers under the Procurement Model) and accept the Supply Chain Sustainability Policy on registration or renewal. Step 2: global risk analysis identified 661 suppliers providing potentially high-risk products or services in 2024 (awarded over one million euros). Step 3: performance assessment via cross-referencing against the Dow Jones Risk & Compliance Watchlist and 360-degree assessments through the IntegrityNext platform on 15 sustainability criteria; 407 of the identified potential high-risk suppliers had been externally assessed by end of 2024, and 16 suppliers were blocked due to integrity, sanctions or sustainability risks or non-compliance. Step 4: the annual audit plan covered 20,898 administrative or on-site audits in 2024, conducted through the Allies Program and the Joint Alliance for CSR (JAC), with agreed improvement plans for non-compliant suppliers.

Telefonica reports its prevention and detection of corruption and bribery in section 2.14.4.1 (pp. 171-173). The Board created an independent regulatory compliance area on 16 December 2015 and appointed the Chief Compliance Officer in February 2016, who reports directly to the Board through the Audit and Control Committee and independently manages the Internal Information System. The Compliance Function operates on two levels: preventive controls and reaction and response. The most significant internal regulation is the Anti-Corruption Policy, aligned with the UN Convention against Corruption (2004), complemented by the Conflict of Interest Regulation and the Corporate Policy on the Comprehensive Discipline Program. Directors and executives annually certify their knowledge of and commitment to the RBPs and Anti-Corruption Policy. Anti-corruption training comprises global courses including the Foreign Corrupt Practices Act (FCPA) course (mandatory every three years for higher-risk positions) and the RBPs and Human Rights course; these programs cover 100% of positions operating in risk areas. A basic compliance risk assessment is conducted every six months under a COSO-based model. 2024 initiatives included Compliance Day (with a 10-question quiz), the VI edition of the Five Stars Recognition Program, Compliance Cafes, and the III Compliance Survey. Several Group companies hold ISO 37001:2016 and UNE 19601:2017 certifications.

Telefonica reports confirmed incidents of corruption or bribery in section 2.14.4.1 (pp. 173-174). In October 2024, Telefonica Venezolana, C.A., Telefonica, S.A. and the United States Department of Justice (DOJ) entered into a Deferred Prosecution Agreement (DPA) to resolve a single charge of conspiracy to violate the anti-bribery provisions of the FCPA. The charge, made against Telefonica Venezolana, C.A., concerns conduct in and around 2014 and 2015 related to a Venezuelan Government-sponsored currency auction. Telefonica, S.A. is not a defendant in the matter but, as parent company of the Telefonica Group, agreed to certain terms and conditions under the DPA. The terms of the DPA include, among others, requirements concerning a corporate compliance program, annual reports on that program during the term of the DPA, and a monetary penalty of $85,260,000 US dollars (approximately 81 million euros, see Note 29.b of the 2024 Consolidated Financial Statements). The DOJ has agreed that if all obligations under the DPA are fully complied with, it will seek dismissal with prejudice of the charge after the DPA concludes.

Telefonica reports political influence and lobbying activities in section 2.14.4.2 (pp. 174-175). The Company states it is politically neutral, remains strictly impartial, does not support or oppose any political party, and makes no donations to political parties or to public or private organisations linked to political parties. This does not prevent it from making its views known through lobbying activities in compliance with prevailing legislation. Lobbying focuses on five positions: creating market structures favourable to investment; reducing obsolete and overly intrusive regulation; balancing the digital ecosystem; making spectrum policy a lever for investment and growth; and incorporating digital networks into the EU Taxonomy for sustainable activities. To provide transparency, Telefonica S.A. is registered in the EU Transparency Register (registration number 52431421-12), Telefonica Germany is registered under Germany's Lobby Register Act (number R002277), and in Spain the Company is registered with the C.N.M.C., Madrid City Council, Madrid Regional Government, Generalitat de Catalunya and Gipuzkoa Provincial Council. Telefonica also has a revolving door policy in its Internal Regulation on Relations with Public Entities, applying a two-year restriction, and states it has not employed anyone actively working for governments or regulators in the past two years.