We are an access and applications provider that supplies private customers and organizations with internet-based applications – both as independent products in the Applications Division and in combination with fixed network and mobile access products in the Access Division. We see it as our role to examine our impact on the environment and society in all links in our value chain.
The following graphic shows a simplified overview of the United Internet Group’s supply and value chain:
United Internet sources network services, domains, licenses, and ICT products such as devices and servers from the upstream value chain(1). These wholesale services are in turn partly based on a multistage upstream value chain stretching all the way back to raw materials extraction.
(1) The upstream value chain comprises cradle-to-gate goods and services (Greenhouse Gas Protocol, 2011).
The wholesale services provided for the Access Division – and especially network services (mobile and fixed network) – represent a significant component of total wholesale services, with devices and ICT products for customers and services provided by specialized partners and outsourcers following by some margin. Taken together, these items make up the bulk of our procurement volumes. All in all, we sourced revenue-related services and goods worth approximately €2.99 billion (2020: €3.11 billion; 2019: €2.78 billion) from our business partners in 2021. Sourcing wholesale services places high demands on the business relationships involved.
The network services and ICT products must mainly be seen from the perspective of their environmental impact, since network operation involves the consumption of substantial amounts of energy and resources. To a lesser extent this also applies to domains, for example, the provision of which also requires energy and the underlying hardware.
Servers and devices such as smartphones and tablets have environmental impacts that can be relevant; this applies especially with respect to their electronic components, up to and including the extraction of the raw materials concerned. A social perspective is becoming important here, since raw materials in particular are frequently mined in countries in which the standards for working conditions and environmental protection are lower than in Germany, for example. In addition, the issue of conflict minerals must be addressed. The mining of minerals such as tin, tantalum, tungsten, and gold – which are used among other things in smartphones – sometimes involves forced labor or helps finance armed conflicts. We address this risk in our Code of Conduct for Business Partners.
United Internet primarily adds value in the areas of product development and enhancement, marketing, sales, and customer care; in addition, the organization has its own logistics capabilities. Our products and services build on our data center and fiber-optic network operations.
The figure breaks down the red “Our value added” link in the value chain shown earlier in more detail. We add a large proportion of the value we create in Germany or other EU or OECD countries.
Impacts on the environment and society, such as the energy consumed by our data centers, the impact of transportation and logistics, or our responsibility as an employer, are examined in detail in the various chapters of this sustainability report.
United Internet also uses service providers in some cases for its sales and customer service operations. Downstream(1) activities can be highly relevant, since in many cases the long-term customer relationships resulting from fee-based subscriptions (roughly 26 million) and ad-financed free accounts (roughly 40 million) can facilitate growth. This means that the use phase for our products is a material part of our business – including from a sustainability perspective. Other business partners in the downstream value chain are shipping partners, who are responsible for delivering devices to customers, and partners who ensure that waste devices are recycled/disposed of in an environmentally friendly manner.
(1) Downstream activities cover goods and services following their sale/distribution by the reporting enterprise and the transfer of control to another unit or organization.
Services that we commission from specialized partners and outsourcers include parts of our customer service and sales operations, and product shipping to customers. Social impacts in the form of data privacy, data security, and working conditions must be taken into account here, and we expect our service providers to comply with strict requirements in these areas.
Equally, environmental topics are relevant. Deliveries by our service providers use fuel and emit greenhouse gases. In addition, recycling or disposing of retired devices and IT equipment in an environmentally friendly manner is a relevant environmental factor, which is why we work with specialized partners in this area.