Press release

• In the economic dimension, which includes aspects of customer relations and corporate governance, Telefonica is considered the best company in the industry.
• In this exercise, Telefónica is the only Spanish company that manages to be a world leader in a sector of activity.
• Telefonica has achieved a score of 86, which is 28 percentage points more than the industry average.
• DJSI identifies Telefónica as best practice in risk management; suppliers; digital inclusion; impact of telecommunications services; brand; Codes of Conduct and corporate citizenship.

Madrid. Telefónica has become the leading Telecommunications company based on sustainability criteria according to the Dow Jones Sustainability Index (DJSI). In its annual review, the rating agency Sustainable Asset Management (SAM), based on corporate economic, environmental and social performance, has rated the Group with a score of 86 (81.4 points in 2008), which is 28 percentage points more than the industry average.

"For Telefónica sustainable management is not only a necessity but an opportunity to differentiate and enhance our long-term value. To be leaders in sustainability in our industry, is the proof that we are doing things correctly., This milestone comes three years ahead of Telefónica’s target to lead the DJSI by 2011.. Additionally, Telefónica has been recognized as the best company in economical sustainability", says Luis Abril, General Manager of the Chairman's Technical Office of Telefónica S.A.

According to Abril, now the goal is to maintain the its lead position: "We are part of this index for six years now, one of the most demanding indices in the world, and it has helped us to monitor our progress and identify areas for improvement. We will continue building on our 2009-2001 strategy, which includes three pillars: sustainability, innovation and transformation".

Telefónica has been recognized as the best practice in seven key areas: risk & crisis management; standards for suppliers; reducing the digital divide; impact of telecommunications services in societies in which the Group operates; brand management; Codes of Conduct and anti-corruption policies, and corporate citizenship.

In the economic dimension, Telefónica has reached a score of 93 points (82 in 2008), which is 31 percentage points more than the industry average. The improvement has led the Group to become the best company in the industry in this dimension, which includes aspects as customer relationships management, privacy, risk management, corporate governance, Business Principles and anticorruption policies and brand management.

In this sense, it is important to note the effort of Telefónica to ensure integrity through internal policies and training in the Business Principles to employees (up to 60,219 employees had been trained in the Business Principles of Telefónica as of 31 March 2009); the improvement of its processes to improve customer satisfaction, its brand strategy and its  implementation in all the countries of the Telefónica Group of a unique risk model management as well as the inclusion of sustainability risks into it.

In the environment dimension, Telefónica has reached a score of 73 points (71 in 2008), which is 19 percentage points more than the industry average. This dimension includes aspects as environmental policies, Operational Eco-Efficiency information, environmental reporting and climate change. Telefónica's improvement in this dimension has occurred mainly due to its strategy to combat climate change, reversing the downward trend last year, with an improvement of 34 percentage points against last year.

The Climate Change Office is allowing Telefónica to implement a comprehensive global management model very effective in combating global warming. This Office has five core activities led by each head of line: operators, suppliers, employees, customers and society. "This allows us to co-ordinate and promote cross projects across the organization with a conviction: climate change is a challenge, so we have a target of reducing our energy network consumption by 30% in 2015 through specific efficiency plans, but it is also a business opportunity because we can offer products and services to become the centre of the solution to this issue", says Abril

Finally, in the social dimension, Telefónica has reached a score of 86 points (85 in 2007), which is 29 percentage points more than the industry average. This category includes aspects as labour market indicators, performance on human capital development, Talent Attraction & Retention programmes; Digital Inclusion projects; impact of telecommunications services, social action, social reporting, Stakeholder Engagement and Standards for Suppliers.

In this dimension, the Company has carried out more than 60 digital inclusion initiatives with an investment of 370 million euros in 2008; as well as the assessment of over 1,100 suppliers based on sustainability criteria, 10% above the objective, 10% above the initial target.

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