Material Efficiency and Circularity

✓ Since we are an access and applications provider, our business with physical products focuses particularly on electronic devices and hardware. Our applications are developed either by us or together with partner organizations, and are run in our own data centers or in the centers belonging to our sister company IONOS that we use. In contrast, we provide customers with information and communications technology (ICT) hardware – primarily devices such as smartphones and routers, tablets, laptops, web surfing hardware, and accessories – along with rate plans for using our mobile network and broadband services. In addition, our employees use IT hardware to perform their tasks.

Material efficiency and circularity was identified as a new material topic for our Group during our 2022 materiality analysis. The focus here is on the environmental impact of our own and our customers’ hardware. Manufacturing these entails the use of large volumes of raw and finished materials, which in some cases may be scarce (e.g., rare earths) and which require energy-intensive extraction and processing. Their mining and manufacturing can also result in environmental pollution. In addition, they are sometimes exposed to the risk of violations of minimum social standards and human rights. The subsequent disposal of hardware and electronic components also involves a large number of environmental risks.

In view of this, we aim to ensure to use them as efficiently as possible, and hence to conserve resources, minimize waste, and achieve a high level of reuse and recycling. United Internet has been taking a wide range of measures to ensure this for years, examples of which are given below. No comprehensive policy was in place in the reporting period, since the materiality of the topic was only established at the end of the year in the course of the materiality analysis. Projects activities are planned for 2023 to develop policies and set targets. The future management approach for the material topic of material efficiency and circularity will aim to further systematize existing activities and processes, include clear targets and rules on due diligence, regulate corporate management’s involvement, define additional measures, and ensure their success is measurable and transparent. Additional dedicated policies to be developed by the individual segments will assist in this. ✓

We also focus on ensuring the efficient use of materials in the Logistics and Packaging areas and in relation to paper consumption.

Customer Hardware

Device Disposal

Smartphones, routers, and other devices that we provide our customers with may contain components that cannot be disposed of as household waste. Our job is to take responsibility for these products’ entire life cycle, and to recycle materials properly after use so that no pollutants are released into the environment as waste. We have signed a waste disposal contract with specialist service provider Interzero, our partner in this area, to ensure that the devices that we supply can be disposed of in an environmentally friendly manner. We inform customers about how to dispose of their mobile and landline hardware correctly every time we make a delivery, and list Interzero’s collection points (German only) on our website. This ensures that all customers have the opportunity to return their old equipment for recycling or disposal.

According to industry association Bitkom, there were roughly 206 million old cellphones and smartphones in circulation in Germany in 2021 that were no longer in use but still worked or could be recycled. An efficient circular economy requires such devices to be reused or professionally recycled so as to ensure that valuable raw materials such as precious metals and rare earths can be recovered.

Reusing Smartphones

A number of Drillisch Online brands have been offering refurbished devices since 2019.

Dealing with Waste Devices
Both European directives and Germany’s Electrical and Electronic Equipment Act (Elektronikgerätegesetz – ElektroG) ban the disposal as household waste of old equipment and all electronic parts included in deliveries, and require them to be disposed of professionally to permit recycling. The goals are to protect the environment and health, and to conserve resources.

In 2022, 10 brands offered this option, including winSIM, smartmobil.de, maXXim, and yourfone. All customer cellphones that are returned within 30 days are checked thoroughly and tested for reusability. This involves deleting all personal data on the device, checking the functionality in-house, and also checking for wear and tear. If the devices are in perfect working order, they are cleaned and any missing accessories (headphones, charging cables, etc.) are supplied. These returned devices are marketed at a significant discount to the price of new ones. They are in perfect working order, have been quality assured, and come complete with accessories, original packaging, and a 24-month guarantee. In addition to the price benefits for customers, this conserves key resources and reduces the use of supply chains, hence cutting carbon emissions. A standard process for the large-scale handling of returned devices internally was introduced in 2021, and a dedicated team was assigned responsibility for this.

The 1&1 trade-in campaign, which is also known as the “1&1 Trade-in Bonus,” offers a transparent, customer-friendly way of returning used cellphones, tablets, and notebooks. More than 46,000 old devices were taken back in 2022 and were forwarded to a sustainable recycling process by 1&1. 1&1 combines the goal of conserving resources with a financial incentive for clients. Customers can exchange their old devices for a bonus when ordering new ones. This can be up to several hundred euros, depending on the model concerned. The trade-in bonus is credited directly to customers’ bank accounts when the old device has been received. Roughly 9,000 kg of old electronic devices have been recycled in this way. This conserves valuable resources and reduces waste.

We also assist customers with hardware defects. After they have received a replacement device, the defective one is returned to us or a certified repair service. The functionality is then tested and any defects repaired as far as possible. The goal is to prolong the life of the products and prevent them having to be sent for regular disposal. This process led to 53,000 mobile devices and tablets and 78,000 DSL routers being reclaimed in 2022.

Hardware in Data Centers and Office Buildings

For 12 years now, we have ensured internally used servers and network equipment are recycled in an environmentally sound way by passing them on to recycling specialist AfB gGmbH. This organization recycles them professionally or reclaims them for reuse, prolonging the life of the hardware and conserving resources. AfB is a disability inclusion company; according to its own figures, roughly 49% of its current employees are people with disabilities. This means we not only ensure our hardware is handled by environmental and recycling experts, but also improve employment opportunities for people with disabilities.

AfB reclaimed or recycled the following volumes of old IT equipment for us over the past three years:

In 2022, we delivered 74 tonnes (2021: 130 tonnes; 2020: 172 tonnes) of hardware to AfB, helping to save 584 tonnes (2021: 365 tonnes; 2020: 973 tonnes) of CO ₂ equivalents.

Logistics and (Secondary) Packaging

Part of our business involves providing our customers with products such as smartphones and routers so they can use our services. This task is performed for all 1&1 Group brands by our own logistics center in Montabaur. (Secondary) packaging and information materials are needed to protect and dispatch these products. In addition, we send access data, for example, by post for security reasons. The (secondary) packaging materials that we use largely comprise paper, paperboard, and cardboard (PPC) with a high recycled content of 75–80%. We aim to continuously optimize our use of materials, e.g., by reducing transportation packaging.

Materials Used for Shipments

The total number of letters and packages shipped by our logistics center remained roughly constant year-over-year. We report the amount of (secondary) packaging used in shipping and selling products annually, both to our waste disposal partner and in parallel to the packaging register, LUCID (an online platform run by the Foundation for the Central Agency Packaging Register (ZSVR)). Implementation of the new German Packaging Act (Verpackungsgesetz – VerpackG) has led to changes in the process since 2019: Organizations introducing packaging covered by the system onto the market for the first time on a commercial basis in Germany (“initial introducers”) must register with LUCID and report the amounts of packaging involved. As a result of the change in the law, 1&1 Logistik GmbH’s operations are now considered to be the initial introducers for fewer packaging materials than was previously the case. Instead, the manufacturers themselves have to pay the packaging fees, and to report the amounts involved, in a larger number of cases.

We have been using shipping cartons made from 100% recycled materials since November 2022. In addition, we have replaced SizzlePak filling material by carton inserts made of recycled material.

As a result, 1&1 Logistik GmbH did not use any significant amounts of plastic in 2022. Use of paper, paperboard, and cardboard (PPC) rose to 449.8 tonnes in 2022. The volume of materials required depends on, for example, the relative proportions of devices or SIM cards shipped, and can therefore fluctuate over the years.

(1) The figures relate to 1&1 AG in its entirety.

(2) Calculated on the basis of the conversion factors published by DEFRA for 2019, 2020 and 2021.

SIM cards for Drillisch Online’s brands are sent using recycled envelopes that are stamped with Germany’s “Blue Angel” ecolabel logo. In future, envelopes made from recycled materials will be used for posting correspondence from 1&1. The switchover started in December 2022 and is ongoing. In addition, all envelopes will feature both the “Blue Angel” ecolabel and Deutsche Post’s “GoGreenPlus” logo.

Recycling of (secondary) packaging materials by our service providers Landbell AG and “Duales System Deutschland GmbH – The Green Dot” led to the equivalent of 221.6 tonnes of carbon emissions being saved in 2021 (2020: 223.7 tonnes). ⁽¹⁾

Our logistics operations also aim to reduce the use of transportation materials when servicing is required (e.g., when a customer’s defective equipment has to be replaced). Where loaned devices have to be exchanged, customers receive the new device from a selected delivery service, which replaces the device directly on site. The new device is delivered in specially developed reusable shipping packaging that can be used to return the old device directly. This not only reduces material costs but also saves customers time.

In addition, we have been making greater use of QR codes for returning goods since June 2022. This means that customers no longer have to print out return labels and stick them onto the return packaging. All that needs to be done is to show the Hermes shop the QR code provided when returning the package.

(1) The figures for the reporting year were not available at the time this report was published.

Paper Consumption

We have been working together with GDW (Genossenschaft der Werkstätten für behinderte Menschen Mitte eG), which destroys and recycles our old physical files, for more than four years. Not only do GDW ’ s recycling operations help protect the environment, but they also provide jobs for people with physical and mental disabilities.

In addition, we started making increasing use of digital invoicing with our suppliers in 2020. The project was launched before the COVID-19 pandemic but has been stepped up since then and our customers are also making increasing use of this feature. For example, both we and our suppliers send invoices electronically so as to save paper and avoid the resulting carbon emissions.

We are currently setting up a process to fully quantify our paper consumption. This includes, among other things, copy paper, flyers and advertising brochures