ESG Addendum Methodology 2024
Contents 1
Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Our purpose To connect for a better future we aim to build an inclusive, sustainable and trusted digital society We address Environmental, Social and Governance topics through our Purpose strategy which focuses on ‘Empowering People’ and ‘Protecting our Planet’ in the Digital Society. This is underpinned by our commitment to ‘Maintaining Trust’ in everything we do.
2 Reporting Criteria Scope 4 Assurance 7 Protecting our Planet 10 Scope 1 Methodology 10 Scope 2 Methodology 11 Scope 3 Methodology 18 Carbon Enablement 26 Energy 28 Waste and Water 28 Intensity metrics 28 Environmental Accreditations 29 Empowering People 29 Closing the digital divide 30 Financial Inclusion 31 Maintaining Trust 31 People 33 Diversity and Inclusion 33 Health and Safety 34 Responsible Supply Chain 34 Board & Executive Committee 34 Remuneration 35 Other information 35 GRI Index
Protecting our Planet Read more on p. 7
Empowering People Read more on p. 29
Maintaining Trust Read more on p. 31
Read more about our climate goals and performance in our latest Annual Report and ESG Addendum: vodafone.com/sustainability-reports
35 UNGC 35 SFDR 36 Definitions
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Reporting Criteria Scope This document outlines the basis of preparation for our ESG performance indicators (‘KPI’s) which are available on investors.vodafone.com/esgaddendum. In preparing the ESG-related information and KPIs, Vodafone has made a number of key judgements, estimations and assumptions. The processes, methodologies and topics involved are complex. The ESG data, models and methodologies used are often relatively new, are rapidly evolving and are not of the same standard as those available in the context of financial information, nor are they subject to the same or equivalent disclosure standards, historical reference points, comparable benchmarks, or globally accepted accounting principles. It is not possible to rely on historical data as a strong indicator of future trajectories, in the case of climate change and its evolution. Outputs of models and methodologies are also likely to be affected by underlying data quality, which can be hard to assess, and we expect industry guidance, standards, market practice and regulations in this field to continue to evolve. We also face challenges in relation to the ability to access data on a timely basis and the lack of consistency and comparability between data that is available. This means the ESG-related forward-looking statements, information and targets discussed in our Annual Report carry an additional degree of inherent risk and uncertainty. In light of uncertainty as to the nature of future policy and market response to climate change and other ESG-related topics, including between regions, and the effectiveness of any such response, and as market practice and data quality and availability
develops, Vodafone may have to update the models and/or methodologies it uses, or alter its approach to ESG analysis and may be required to amend, update and recalculate its ESG disclosures and assessments in the future, its ESG ambitions, goals, commitments and/or targets or its evaluation of its progress towards its ESG ambitions, goals, commitments and/or targets. Restatements of ESG data may mean it is not reconcilable or comparable year on year. With the exception of the metrics outlined in the Assurance section, the information contained within this document and our ESG Addendum, collectively our ESG data, has not been independently verified or assured. All the information included in our ESG data has been taken from sources which we deem reliable. While all reasonable care has been taken to ensure the accuracy of the data, Vodafone has not arranged for independent verification of the data with respect to its accuracy or completeness. Further information on methodologies is included in the reporting methodology sections of this document. This report includes information on: – Operating companies in the countries where we had operational control during the year 1 April 2023 to 31 March 2024: Albania, Czech Republic, Germany, Greece, Ireland, Italy, Portugal, Romania, Spain, Turkey, UK and Vodacom Group and its subsidiaries in the DRC, Egypt, Lesotho, Mozambique, South Africa and Tanzania; and – Shared operations in Albania, Egypt, Hungary, India, Romania and Spain known as Vodafone Intelligent Solutions (‘_VOIS’) and other group operations including Vodafone Business and Vodafone Automotive.
This report excludes information on the following unless otherwise stated in the exceptions section below: – Joint ventures where Vodafone does not have operational control: VodafoneZiggo in the Netherlands, TPG Telecom in Australia, Vodafone Idea in India and Vantage Towers and its subsidiaries in Czech Republic, Germany, Greece, Ireland, Portugal, Romania and Spain; – Associates where we do not have operational control: Safaricom in Kenya and Ethiopia, and Indus Towers in India; – Partner Market networks in which Vodafone neither has any equity interests nor holds an operating license, including those Partner Markets that operate under the Vodafone brand; – Countries in which we are required to hold an operating licence in order to provide local customer support to multinational enterprise customers but where we neither own nor operate any licensed telecommunications network infrastructure; and – Retail stores that are Vodafone-branded by way of franchise and exclusive dealer arrangements but are not owned or operated by Vodafone.
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Exceptions to the reporting scope: – Our joint ventures and associates where we don’t have operational control which are included in our Scope 3 GHG emissions based on our ownership as at 31 March 2024; – Retail stores where we don’t have operational control which are included in our Scope 3 GHG emissions, – M-Pesa customer numbers, which includes 100% of our associate Safaricom in Kenya and Ethiopia; and – V-hub unique user number and target, which include 100% of our joint venture VodafoneZiggo in the Netherlands. Portfolio changes The inclusion or exclusion of data from subsidiaries, joint ventures or associates that have been acquired or sold, or where there is a change in control or ownership that results in a change in operational control (as defined in the GHG Protocol), is determined by the date that the transaction in question is formally concluded with all approvals received. The impact of transactions completed in the year ended 31 March 2023 are detailed in the methodology for each metric in this document. There have been no transactions completed during the year ended 31 March 2024. The impact of transactions announced but not yet completed are reflected as performance from discontinued operations. When those transactions complete we will restate our data in accordance with the above policy.
Under 'IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations' our operations in Italy and Spain have been classified as discontinued operations and are reported as such in our financial statements. All other Group activities are reported as continuing operations. This disaggregation has also been reflected in our ESG reporting across all reporting periods. In a limited number of circumstances, data granularity was not available to disaggregate the information relating to discontinued operations. Where this is the case it is noted in the ESG Addendum in relevant footnotes to the data. Estimates and Assumptions The reported information on our operations is based on actual performance data for the period. Where actual data is not available, we have used estimates or assumptions based on actual trends. More information on these estimates or assumptions is set out in the reporting methodology sections for each metric. Data This document includes selected ESG data which should be read alongside the full ESG dataset in our ESG Addendum.
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Assurance: Independent Limited Assurance Report to Vodafone Group Plc KPMG LLP (“KPMG” or “we”) were engaged by Vodafone Group plc (“Vodafone”) to provide limited assurance over the Selected Information described below for the year ended 31 March 2024. Our conclusion Based on the work we have performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that the Selected Information has not been properly prepared, in all material respects, in accordance with the Reporting Criteria. This conclusion is to be read in the context of the remainder of this report, in particular the inherent limitations explained below and this report’s intended use. Selected Information The scope of our work includes only the information included within the External ESG Assurance table on page 55 of Vodafone’s Annual Report and Accounts and in Vodafone’s ESG Addendum marked with the symbol ^ (“the Report”) for the year ended 31 March 2024 (“the Selected Information”) and also listed in Appendix 1. We have not performed any work, and do not express any conclusion, over any other information that may be included in the Report or displayed on Vodafone’s website for the current period or for previous periods unless otherwise indicated. Reporting Criteria The Reporting Criteria we used to form our judgements is the ESG Addendum Methodology as set out at
Our responsibilities Our responsibility is to plan and perform our work to obtain limited assurance about whether the Selected Information has been properly prepared, in all material respects, in accordance with the Reporting Criteria and to report to Vodafone in the form of an independent limited assurance conclusion based on the work performed and the evidence obtained. Assurance standards applied We conducted our work in accordance with International Standard on Assurance Engagements (UK) 3000 Assurance Engagements other than Audits or Reviews of Historical Financial Information (“ISAE (UK) 3000”) issued by the Financial Reporting Council and in respect of the greenhouse gas emissions information included within the Selected Information, in accordance with International Standard on Assurance Engagements 3410 Assurance Engagements on Greenhouse Gas Statements (“ISAE 3410”), issued by the International Auditing and Assurance Standards Board. Those standards require that we obtain sufficient, appropriate evidence on which to base our conclusion.
https://www.vodafone.com/about-vodafone/reporting- centre/sustainability-reports (“the Reporting Criteria”). The Selected Information needs to be read together with
the Reporting Criteria. Inherent limitations
The nature of non-financial information; the absence of a significant body of established practice on which to draw; and the methods and precision used to determine non-financial information, allow for different, but acceptable evaluation and measurement techniques and can result in materially different measurements, affecting comparability between entities and over time. The Reporting Criteria has been developed to assist Vodafone in providing the Selected Information only. As a result, the Selected Information may not be suitable for another purpose. Directors’ responsibilities The Directors of Vodafone are responsible for: – designing, operating and maintaining internal controls relevant to the preparation and presentation of the Selected Information that is free from material misstatement, whether due to fraud or error; – selecting and/or developing objective Reporting Criteria; – measuring and reporting the Selected Information in accordance with the Reporting Criteria; and – the contents and statements contained within the Report and the Reporting Criteria.
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Independence, professional standards and quality control We comply with the Institute of Chartered Accountants in England and Wales (“ICAEW”) Code of Ethics, which includes independence, and other requirements founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour, that are at least as demanding as the applicable provisions of the IESBA Code of Ethics. The firm applies International Standard on Quality Management 1 Quality Management for Firms that Perform Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements which requires the firm to design, implement and operate a system of quality management including policies or procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements. Summary of work performed A limited assurance engagement involves planning and performing procedures to obtain sufficient appropriate evidence to obtain a meaningful level of assurance over the Selected Information as a basis for our limited assurance conclusion. Planning the engagement involves assessing whether the Reporting Criteria are suitable for the purposes of our limited assurance engagement. The procedures selected depend on our judgement, on our understanding of the Selected Information and other engagement circumstances, and our consideration of areas where material misstatements are likely to arise.
The procedures performed included: – conducting interviews with Vodafone’s management to obtain an understanding of the key processes, systems and controls in place over the preparation of the Selected Information; – selected limited substantive testing, including agreeing a selection of the Selected Information to source documentation; – considering the appropriateness of the carbon conversion factor calculations and other unit conversion factor calculations used by reference to widely recognised and established conversion factors; – reperforming a selection of the calculations used to prepare the Selected Information; – performing analytical procedures over a selection of the Selected Information, including a comparison to the prior period having due regard to changes in the business; and – reading the narrative accompanying the Selected Information in the Report with regard to the Reporting Criteria, and for consistency with our findings. The work performed in a limited assurance engagement varies in nature and timing from, and is less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed.
Our work did not include testing the accuracy of the purchase volumes in Vodafone’s Supply Chain IT system and Devices dataset, which were used in calculating Total Scope 3 GHG
emissions (million tonnes CO 2 e). This report’s intended use
Our report has been prepared for Vodafone solely in accordance with the terms of our engagement. We have consented to the publication of our report in Vodafone’s ESG Addendum for the purpose of Vodafone showing that it has obtained an independent assurance report in connection with the Selected Information. Our report was designed to meet the agreed requirements of Vodafone determined by Vodafone's needs at the time. Our report should not therefore be regarded as suitable to be used or relied on by any party wishing to acquire rights against us other than Vodafone for any purpose or in any context. Any party other than Vodafone who obtains access to our report or a copy and chooses to rely on our report (or any part of it) will do so at its own risk. To the fullest extent permitted by law, KPMG LLP will accept no responsibility or liability in respect of our report to any other party. KPMG LLP Chartered Accountants 15 Canada Square
London E14 5GL 14 May 2024
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Appendix 1 – Selected Information The KPIs that constitutes the Selected Information are listed below. The information in this Appendix needs to be read together with the limited assurance report and the Reporting Criteria. KPI Unit Assured Value Total Scope 1 GHG emissions Million tonnes CO 2 e 0.27 Total Scope 2 GHG emissions (location-based method) Million tonnes CO 2 e 2.11 Total Scope 2 GHG emissions (market-based method) Million tonnes CO 2 e 0.44 Total Scope 1 and Scope 2 GHG emission (location-based method) Million tonnes CO 2 e 2.38 Total Scope 1 and Scope 2 GHG emissions (market-based method) Million tonnes CO 2 e 0.71 Total Scope 3 GHG emissions Million tonnes CO 2 e 6.84 Grid renewable electricity purchased (% of purchased electricity) (Group) from all operations % 88 Women in management and senior leadership roles from all operations % 36 Number of financial inclusion customers Millions 66.2 4G population coverage (outdoor 1Mbps) – from all operations (Group) % 87 Cumulative V-Hub unique users Millions 6.4 With the exception of the metrics outlined above, the information contained within the ESG Addendum has not been independently verified or assured. All the information included within these pages, including the metrics outlined in the table above has been taken from sources which we deem reliable. While all reasonable care has been taken to ensure the accuracy of the data, Vodafone has not arranged for independent verification of the data with respect to its accuracy or completeness.
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
Other information
Protecting our planet
Greenhouse gas (‘GHG’) emissions Reporting Criteria GHG emissions are calculated in millions of tonnes of carbon dioxide equivalent (million tonnes CO 2 e) and reported in accordance with the GHG Protocol Standards, UK Streamlined Energy and Carbon Reporting (‘SECR’) requirements, RE100 Technical Guidance and the Carbon Disclosure Standards Board (‘CDSB’) framework. We have applied the operational control approach for the accounting of our GHG emissions and the scope of the data collected is based on this method. This is defined as operations where we have control over how energy is being used (and therefore associated services). Emissions from operations where we do not have operational control but have a financial interest i.e. shareholding, or are part of our wider value chain (e.g. suppliers) where we do not have a financial interest, are accounted for within our Scope 3 GHG emissions. Standards and guidance Our methodology for the reporting of GHG emissions has been developed using the following standards and guidance: GHG Protocol standards and guidance, including the Corporate Standard (revised edition); Scope 2 Guidance and Scope 3 Calculation Guidance; and Corporate Value Chain (Scope 3) Standard; RE100 Technical Criteria (December 2022); and The Climate Disclosure Standards Board Climate Change Reporting Framework (January 2022).
Digital technology has a huge role to play in enabling the climate transition; helping reduce carbon emissions and underpinning climate adaptation technologies. Recognising that technology can create its own impact on our climate and nature, we strive to minimise the environmental footprint of our operations, value chain and products and services. Reducing our environmental impact and helping to decarbonise society is an integral part of Vodafone’s purpose. This year, the need for a green digital transition became ever-more urgent, as the global climate and energy crises deepened. We are working towards achieving reduction of our greenhouse gas emissions to net zero by 2040 across our global operations. We continue to drive energy efficiency in our operations and seek to match our energy with electricity from renewable sources. Digital technology has been recognised as a key enabler of carbon savings. We work with our business customers to build solutions reduce greenhouse gas emissions and lower their planetary impact. As use of technology expands, we are playing our part in the growing circular economy. We aim to minimise the impact of the waste we create from our own operations and encourage greater re-use, repair and recycling of the hardware our customers use.
10 Scope 1 Methodology 10 Scope 2 Methodology 11 Scope 3 Methodology 18 Carbon Enablement 26 Energy 28 Waste and Water 28 Intensity metrics 28 Environmental Accreditations
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Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
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Portfolio changes We include performance data from newly acquired businesses at the end of their first full year of new ownership in line with our policy on reporting environmental data. In terms of setting a revised baseline to reflect acquisitions, disposals or a change of control, our policy is determined as follows: – Acquisitions are built into the baseline using either actual or estimated data at the end of their first full year of ownership based on our assessment of operational control; – Disposals are removed from the baseline in the year of disposal if part of the Group for less than six months or in the following year if part of the Group for more than six months; – Where prior year data has been re-stated to correct any significant errors identified this will be noted along with the reason for re-statement; and – Where there is an update to the calculation methodology that causes a significant change in the previously stated data all prior year information will be restated. This year we have restated our GHG emissions across all prior periods to our 2020 baseline to reflect: – Disposals of Hungary and Ghana on 31 January 2023 and 20 February 2023 respectively; and – The change in control of the Vantage Towers Group on 23 March 2023 from a subsidiary to a joint venture. On 13 December 2022 ownership of Egypt was transferred to the Vodacom Group. Comparative information has been re-presented to reflect the move of Vodafone Egypt from the ‘Other markets’ segment to the Africa segment from 1 April 2023.
Data gathering process and methods Energy usage data is based on invoices from our energy suppliers, which in some cases include the supplier’s estimated readings. Increasingly, we measure our energy consumption through smart metering, a technology that uses mobile communications to collect real-time consumption data from energy meters. Under this approach we have accounted for 100% of emissions from the operations over which we have operational control within the Scope 1 and 2 footprints. We report on data collected using local market actual or estimates sourced from invoices, purchasing requisitions or direct data measurements. Emissions from our joint ventures and associates are accounted for within our Scope 3 GHG emissions. Where actual data is not available for the full reporting period, data for the missing period is estimated using an appropriate and reasonable estimation method (for example, extrapolation using the year-to-date monthly average, or based on prior year data for the corresponding time period). Due to a time lag in the availability of actual data, the majority of GHG emissions data has been estimated for the month of March 2024. If in our future year reporting the reconciliation of estimated data against actual data identifies a material error we will restate our reporting in accordance with our policy for restatement.
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Vodafone Group Plc
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Emissions across our value chain 1 Million tonnes CO 2 e Total Scope 1 emissions from continuing operations Total Scope 2 emissions (market-based method) from continuing operations Total Scope 3 emissions from continuing operations 1 Total Scope 1, 2 and 3 GHG emissions from continuing operations 2 Total Scope 1 emissions from discontinued operations 3 Total Scope 2 emissions (market-based method) from discontinued 3 operations Total Scope 3 emissions from discontinued operations 1,3 Total Scope 1, 2 and 3 GHG emissions from discontinued operations 2, 3 Total Scope 1 emissions^ Total Scope 3 emissions^ 1 Total Scope 2 emissions (market-based method)^ Total Scope 1, 2 and 3 GHG emissions 2 Total revenue from continuing operations (EUR million) 4 Market-based scope 1, 2 and 3 GHG emissions intensity from continuing operations (tonnes per EUR million) 4
2020 0.26 1.44 5.05 6.75 0.05 0.13 1.13 1.31 0.30 1.58 6.17 8.05
2021 0.26 1.06 6.01 7.33 0.04 0.00 1.01 1.05 0.30 1.06 7.02 8.38
2022 0.25 0.77 6.91 7.93 0.01 0.00 1.12 1.13 0.27 0.77 8.02 9.06
2023 0.25 0.66 6.92 7.83 0.01 0.00 0.89 0.90 0.26 0.66 7.80 8.73
2024 0.26 0.43 6.07 6.76 0.01 0.01 0.77 0.79 0.27 0.44 6.84
7.55 36,717
184.2
Notes: ^ 2024 Limited assurance under ISAE (UK) 3000 and ISAE 3410 by KPMG LLP, see our Methodology below for further information. The information for comparative periods has been restated to reflect portfolio changes. For information about assurance in comparative periods see ESG Addendum investors.vodafone.com/esg for information on assurance for 2023 and 2022 respectively. 1. During the current year, information relating to 2020, 2021, 2022 and 2023 has been restated to reflect portfolio changes completed during FY23. See our ESG Addendum Methodology for more information on 'Portfolio changes'. 2. Operations in Italy and Spain have been classified as discontinued operations in line with 'IFRS 5 - Non-current Assets Held for Sale and Discontinued Operations'. All remaining operations are reported as continuing operations. This disaggregation of information has been reflected in all comparative periods. 3. Includes data relating to our operations in Italy and Spain. 4. Information for prior periods is not presented as the organisational boundaries for financial reporting are not consistent with those used in the calculation of GHG emissions. For information about intensity metrics for prior periods, see our FY23 ESG Addendum (investors.vodafone.com/esg).
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Vodafone Group Plc
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Scope 1 GHG emissions These are emissions from operations under our operational control and include those from: – Diesel, petrol and other fuel used by cars and commercial vehicles owned by Vodafone or leased for six months or more; – Natural gas and other heating fuels used for space heating and hot water in our premises; – Diesel and petrol used for generators in off-grid areas, or where back-up capacity is required; and – Fugitive releases of refrigerants or fire suppressants used for air-conditioning or fire control systems in network buildings and offices. Conversion factors from the UK government’s Department for Business, Energy and Industrial Strategy have been used to calculate GHG emissions from other fuel sources such as diesel, petrol, natural gas and fuel oil as well as those from vehicles. Scope 2 GHG emissions These are emissions from electricity, heat, steam and cooling purchased to power our networks, technology centres, offices and retail stores. We report two different Scope 2 emission values: one using a ‘market-based’ method and one using a ‘location-based’ method. The market-based method applies if we have operating companies in any countries where energy certificates or supplier- specific information are available. The method involves using an emissions factor that is specific to the electricity purchased. The location-based method involves using an average emissions
Market-based emissions Emissions are calculated using a kWh to CO 2 e conversion factor based on one of the following sources (in order of the GHG Protocol hierarchy): – Supplier conversion factors specific to our contract; these include some markets where supplies are 100% renewable, and where we have sought evidence of singularity of supply; – Residual mix figures for 2022 – where the conversion factor reflects the removal of certificates, contracts and supplier- specific factors claimed by other organisations; and – Location-based conversion factors as described below. Location-based emissions Emissions are calculated using a kWh to CO 2 e conversion factor provided in the 2023 International Energy Agency (‘IEA’) emissions factor database which uses data for the 2022 calendar year where available (2021 is used if not available). For the calculation of emissions from district heating in Germany the Department for Food and Rural Affairs (‘DEFRA’) emissions factor is applied. The emission factor for South Africa has been restated across all reported periods to apply the factor provided by the state-owned electricity provider to more accurately reflect the emissions.
factor that relates to the grid on which energy consumption occurs. This usually relates to a country-level electricity, and where applicable district heating or cooling, emissions factor. The following external factor sources have been used to calculate our market-based emissions: Local market 1 Source Date of factor Albania Supplier Factor 2022/23 Czech Republic Supplier factor 2022/23 DRC IEA 2022 Egypt Supplier factor 2022/23 Germany Supplier factor 2022/23 Greece Supplier factor 2022/23 Ireland Supplier factor 2022/23 Italy Supplier factor 2 2022/23 Lesotho IEA (for Africa) 2022 Mozambique IEA 2022 Portugal Supplier factor 2022/23 Romania Supplier factor 2022/23 South Africa Supplier factor 2022 Spain Supplier factor 2022/23 Tanzania IEA 2022/23 Turkey Supplier factor 2022/23 UK Supplier factor 2022/23 Notes: 1. Relates to emissions for our operating companies, other factors are used for emissions from share services or other operations. 2. The IEA factor is used for the calculation of market-based emissions from district cooling.
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Renewable electricity We consider grid electricity to be purchased from renewable sources if the grid electricity used in our operation is matched with renewable energy certificates (‘RECs’). RECs certify that power has been generated and added to the grid from a renewable source such as wind, solar or hydro. In addition, we purchase a growing proportion of our electricity directly from renewable generators through Power Purchase Agreements (‘PPAs’). We also generate a small proportion of the electricity we use ourselves, for example through rooftop solar panels. In some of the European countries where we operate, markets for purchasing renewable electricity (traceable using RECs) are not available. We match electricity used in these countries with RECs originating from grid-connected neighbouring markets. This means that the electricity used by our network in Europe is 100% matched with renewable sources. The European markets where we match the grid electricity we use with RECs for the financial year ending 31 March 2024 are: Albania, Belgium, Czech Republic, France, Germany, Greece, Hungary, Ireland Italy, Luxembourg, the Netherlands, Portugal, Romania, Spain and the United Kingdom. Renewable electricity includes all renewable electricity from third-party suppliers which is traceable to Vodafone through a signed contract or provision of surrendered RECs. Renewable electricity excludes RECs passed on and retired by a third party.
Scope 3 GHG emissions The GHG Protocol Corporate Standard defines 15 categories of Scope 3 emissions. All 15 categories have been assessed for inclusion within our reporting, where categories are excluded because there are no emissions, this is reviewed annually to ensure it remains valid and as part of our continued efforts to improve transparency and completeness of disclosure for our total GHG emissions footprint. We are committed to continual improvement in the quality and completeness of our Scope 3 emissions data inventory. We partner with carbon accounting specialists at The Carbon Trust to model and calculate our annual Scope 3 emissions. The Carbon Trust are experts in sustainability and carbon reporting who support us in identifying improvements to the completeness and accuracy of the input datasets and making improvements to methodology in line with emerging industry best practice. This year we have completed a review of our methodologies resulting in restatement of our Scope 3 emissions for all reported periods. This was undertaken to improve our data quality and estimation approach alongside the need to reflect portfolio changes and latest developments in industry standards and emission factors. The methodological changes made this year are considered to be insignificant.
As the methodology for measuring Scope 3 GHG emissions is still developing and industry standards may change, we will continue to evolve our methodology, and this may result in in a need to amend or update our disclosures and/or our ESG ambitions, goals, commitments and/or targets or our evaluation against these. We calculate our emissions for upstream and downstream transportation and distribution using a hybrid approach of spend-based and product specific data, which does not differentiate between upstream and downstream transportation and distribution activities. In 2022 we improved our calculation methodology to enable emissions from capital goods and transportation and distribution to be reported separately from purchased goods and services. Prior to 2022, emissions from capital goods were included in the data reported for purchased goods and services together with emissions from all transportation and distribution. The table below provides a breakdown of our Scope 3 emissions alongside an overview of the methodology for our Scope 3 calculations. Where the UK Government Department for Business, Energy and Industrial Strategy (‘BEIS’) emission factors are referenced, these refer to the conversion factors for company reporting of greenhouse gas emissions (published by BEIS in June 2023).
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We use a hybrid approach to calculating Scope 3 category 1 emissions. For the majority of purchased goods and services, we use a spend-based approach whereby our procurement spend on each product category is multiplied by a corresponding environmentally extended input-output (‘EEIO’) emission factor (drawn from third-party EEIO datasets). For a sub-set of purchased goods, namely mobile phone devices that are purchased from original manufacturers for retail to our customers, we use a product-specific approach, whereby the units of product purchased are multiplied by a corresponding cradle-to-gate product carbon footprint (‘PCF’). The PCF data is drawn from EcoRating datasets. For a sub-set of purchased services procured from 20 service-based suppliers, we use a supplier-specific approach whereby our procurement spend on each supplier is multiplied by the supplier’s organisational carbon footprint intensity (market-based Scope 1 and 2 plus upstream Scope 3 emissions) in tCO 2 e/mUSD, as disclosed through publicly available 2023 Climate Disclosure Project (‘CDP’) disclosures. We use a spend-based approach to calculating the emissions for capital goods purchased. Capital expenditure on each type of capital good is multiplied by a corresponding EEIO emission factor (drawn from third-party EEIO datasets).
Changes made to the methodology this year include: – Further improvements to the mapping of EcoRating PCF data (to mobile handset models based on storage capacity and handset type e.g. smart or feature phone) applied to calculate emissions using the product-specific approach; – Increased the number of suppliers where CDP disclosure data has been used; and; – Recategorisation of spend data from Category 1 to Category 8 where the spend item relates to upstream leased assets..
1. Purchased goods and services Emissions from the extraction, production and transportation of goods and services purchased by Vodafone (through operating expenditure).
Changes made to the methodology this year include: – Recategorisation of spend data from Category 2 to Category 8 where the spend relates to upstream leased assets.
2. Capital Goods Emissions from the extraction, production and transportation of capital goods purchased by Vodafone (through capital expenditure).
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Upstream fuel and energy emissions are calculated by applying BEIS emission factors for upstream well-to-tank (‘WTT’) and transmission and distribution (‘T&D’) emissions to Vodafone’s fuel and energy consumption data. International Energy Agency (‘IEA’) emissions factors are applied for international electricity consumption.
There were no significant changes to the methodology for this category for this year.
3. Fuel and energy- related activities Emissions from the extraction, production and transportation of fuels and energy purchased by Vodafone and not already included in Scopes 1 and 2. It includes emissions from electricity transmission and distribution. 4. Upstream transportation and distribution Emissions from the transportation and distribution of products purchased by Vodafone between the manufacturing location of our Tier 1 suppliers and our own operations.
We use a hybrid approach to calculating Scope 3 category 4 emissions. For mobile phone devices that are purchased from original manufacturers for retail to our customers, we continued to use our original methodology for calculating these emissions. For these, we estimate the weight of products purchased based on desk-based research and multiply this by the distance between China (representing the origin location for the majority of our products) and the top five countries of purchased goods (representing the market destination of the majority of our products). A modal split of 5% air freight and 95% shipping has been assumed and average BEIS emission factors for freight have been applied to estimate emissions. For all other goods purchased and sold, we estimate associated transportation and distribution emissions using a spend-based approach. These estimates account for transportation and distribution irrespective of whether it is upstream (category 4) or downstream (category 9). Therefore category 9 emissions are accounted for within this category. Where CDP data is used to calculate category 1 emissions we do not disaggregate emissions data relating to transportation and distribution for those purchased services. The emissions from transportation and distribution related to those services are therefore accounted for within our category 1 emissions.
There were no significant changes to the methodology for this category for this year.
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Emissions are estimated by applying BEIS emission factors to tonnage of waste generated by our operations across all of our operating companies (not including post-consumer waste from our products). Where actual waste tonnage is not available, this is estimated by extrapolating a per full-time equivalent (‘FTE’) employee waste tonnage estimate, based on actual tonnage data for our UK operating company. Air travel emissions are calculated based on the distance travelled multiplied by the air travel emission factor for the corresponding ticket-class and flight length. Emission factors are drawn from the BEIS emission factors. The emissions factors applied were drawn from BEIS, for domestic (UK internal), international (non-UK), and long-haul and short-haul (to/from UK) flights. Data for the distance travelled is extracted from the database of Vodafone’s third-party travel booking provider. Distance data is included for both outward and return legs of all flights booked with an outward departure date within the reporting period. Rail travel emissions are calculated based on the distance travelled multiplied by a BEIS rail travel emission factor. Other business travel emissions are calculated based on Vodafone’s spend (on road, bus and taxi travel) as measured through our travel expenses system, multiplied by corresponding EEIO conversion factors. Emissions are estimated by multiplying the total number of employees (average FTE) per country by the estimated average distance travelled per day, estimated number of working days per year, estimated days working from the office and home per week, estimated proportion travelling by a particular mode of travel and energy use at home, and BEIS emission factors.
There were no significant changes to the methodology for this category for this year.
5. Waste generated in operations Emissions from the disposal and treatment of waste generated by our activities. 6. Business travel Emissions from transportation of employees for business- related flights (air travel) and business-related travel by road and rail.
Changes made to the methodology this year include: – Calculating hotel emissions based on number of nights stayed, previously this was based on spend, multiplied by corresponding EEIO or BEIS conversion factors.
Changes made to the methodology this year include: – Inclusion of working from home emissions based on the hybrid working policies in each of our operating companies.
7. Employee commuting Transportation of
employees between their homes and worksites and energy use from home working during the reporting year.
15
Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
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The most significant upstream leased assets in Vodafone’s value chain are radio base station sites leased from third-party tower companies. At the majority of these leased sites, Vodafone owns and operates radio equipment. The electricity consumed by equipment owned and operated by Vodafone falls within our operational control boundary and is therefore accounted for in our Scope 2 emissions. The energy consumption of ancillary equipment (or ‘passive’ equipment) at these leased sites, which is owned and operated by the third-party landlord, is not within Vodafone’s operational control boundary, and therefore contributes to Vodafone’s Scope 3 category 8 emissions. These emissions are estimated based on the number of leased radio base station sites multiplied by the estimated average energy consumption of passive equipment, multiplied by the location-based emissions factor corresponding to the location of the site. The estimated average energy consumption of passive equipment is based on energy consumption data (electricity and diesel) of passive equipment at radio base station sites owned and operated by Vodafone. Where transportation of sold products is paid for by Vodafone (through the procurement of services from third-party logistics suppliers), the corresponding emissions are accounted for within Scope 3 category 4. On the basis that downstream transportation and distribution activities (which generally occur within country) are not significant compared to upstream transportation and distribution activities (which generally involve international freight), the emissions for this category have not been disaggregated to account for downstream transportation and distribution separately from upstream transportation and distribution. Therefore, no emissions are reported against this category. Vodafone does not sell products that require further processing before use. Therefore, this category of emissions is not relevant and no emissions are reported against this category.
Changes made to the methodology this year include: – Recategorisation of spend data from Categories 1 and 2 to Category 8 where the spend relates to upstream leased assets.
8. Upstream leased assets Operation of assets leased by Vodafone, including third-party network sites. This includes the relevant sites leased from tower companies. 9. Downstream transportation and distribution Transportation of sold products from the point of sale to the customer. 10. Processing of sold products Downstream processing of sold products (prior to use phase).
There were no changes to the reporting for this category for this year.
There were no changes to the reporting for this category for this year.
16
Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
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These emissions include the emissions from electricity required to use electronic devices that Vodafone sells, including mobile phone handsets, fixed line equipment (such as broadband routers) and other electronic devices. Emissions are calculated based on the number of devices, multiplied by the estimated average lifetime energy use of each device, multiplied by the location-based emissions factor in the country of product sale. The estimated average lifetime energy use of mobile phone handsets is drawn from EcoRating data sets, if available, or else from desk-based research of publicly available information on the energy use of similar devices. For all other devices, use-phase electricity consumption is estimated based on proxies for the average energy use of similar products (based on publicly available information). These emissions do not include the emissions from the use of SIM cards sold by Vodafone, on the basis that SIM cards can be used in a wide range of equipment with a wide range of electricity consumption and do not themselves create emissions. These emissions are calculated based on the estimated weight of products sold by end-of-life disposal channel (based on average rate of waste electronic recycling versus landfill), multiplied by the corresponding BEIS emission factor for each end-of-life channel. The average rate of waste electronic recycling versus landfill is calculated using the average recycling rates in four of our markets (Germany, UK, Italy, Spain), based on desk research of publicly available information.
Changes made to the methodology this year include: – Improved use-phase electricity consumption data based on storage capacity of mobile handsets.
11. Use of sold products
Emissions from the use of goods and services sold by Vodafone, principally from the energy used by network equipment, such as routers, and the energy required to charge mobile devices. 12. End-of-life treatment of sold products Waste disposal and treatment of products sold by the reporting company at the end of their life. 13. Downstream leased assets Emissions from the use of products or equipment leased to third parties.
There were no significant changes to the methodology for this category for this year.
No emissions have previously been reported against this category.
We have reported emissions from downstream leased assets for the first time this year and in all reported periods. This is based on the leased revenue reported in our financial statements. Emissions are calculated using the number of leased assets, multiplied by the lifetime electricity consumption and the corresponding IEA emission factor.
17
Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
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Retail stores where Vodafone has operational control (including ability to specify the equipment installed in the store and how it is operated, irrespective of whether the store is owned or leased by Vodafone) fall within our operational control boundary and are therefore accounted for in our Scope 1 and 2 emissions. Vodafone operates a franchise model in some of its markets, where retail stores are not under Vodafone’s operational control, and where the energy required to operate the store is primarily determined by the decisions of a third-party franchisee. These franchised retail stores fall outside Vodafone’s operational boundary and are therefore accounted for in our Scope 3 emissions. These emissions are calculated by multiplying average energy use per retail store (based on the average electricity and natural gas use in retail stores in Germany) by the corresponding IEA and BEIS emission factors for that country, multiplied by number of franchise retail stores in each market. Emissions from joint ventures and associates are calculated based on Vodafone’s equity ownership and the corresponding proportion of the company’s Scope 1 and 2 emissions. In FY24, these investments included network operators in Australia, the Netherlands, India, Ethiopia, Kenya and infrastructure partners in India. The company’s carbon emissions are based on the latest available annual carbon footprint data, either provided directly to Vodafone through engagement with the investee company, or from publicly disclosed company carbon reporting for the latest available reporting year. A proportion of the total annual Scope 1 and 2 emissions of the investee company is reported based on our equity share as at the end of the reporting period. Scope 3 emissions from investee companies are not currently included in this category as we have not yet been able to determine the significance of the Scope 3 emissions to each investee company’s total emissions.
There were no significant changes to the methodology for this category for this year.
14. Franchises Operation of franchises in the reporting year, not included in Scope 1 or 2.
There were no significant changes to the methodology for this category for this year.
15. Investments Emissions from activities financed by Vodafone through investments in joint ventures and associates where Vodafone has significant influence.
18
Vodafone Group Plc
Protecting our Planet Empowering People Maintaining Trust
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Carbon enablement Carbon enablement – GHG savings for customers enabled by our green digital solutions Over the last few years Vodafone has been estimating the potential global carbon abatement impact of their products and services with the support of The Carbon Trust, an external consultant. Carbon abatement, also known as enablement or avoided emissions, is an estimated measurement of carbon savings resulting from the use of products and services. It is specifically the measurement of the avoidance or reduction of greenhouse gas emissions that would otherwise have occurred had these connections and services in these use cases not been in place. An estimate of the carbon abatement impact for each use case is calculated by multiplying product volume (e.g., number of IoT connections) by a carbon abatement factor. A use case is a proposition within Vodafone’s business customer portfolio that has the potential to reduce carbon emissions (e.g., Smart metering, Fleet management, Health-care monitoring). Vodafone has been working with The Carbon Trust to define and identify these use cases, develop methodologies and estimate the associated carbon abatement impact by applying a carbon factor to each use case. The Carbon Trust is a third-party expert in the field of carbon measurement, and we rely on their expertise to determine the carbon abatement potential of the use case.
The carbon abatement factor for each use case is mainly informed by either an external study, an internal Vodafone study or documented expert assumptions. For use cases where the location of the connection is relevant to the carbon abatement factor, a country-specific input is included (e.g., for Fleet Management, the carbon abatement factor includes average annual emissions for a car in the country where the connection is located). For countries where insufficient data is available, proxies or other assumptions have been substituted. We strive to develop measures of carbon enablement through collaboration with carbon experts and technology sector industry peers. As the science of measuring carbon enablement develops, we recognise ongoing limitations with our current approach, and will continue to evolve our methodology to address them in light of emerging industry standards. These limitations include: – We measure carbon abatement on a gross estimate basis. This means that the carbon emissions avoided are not net of the lifecycle carbon emissions of the product or service itself. – We do not account for any potential rebound effects. This means we do not measure any possible emissions associated with unintended changes of behaviour that could result from the implementation of the products or services. As the methodology for measuring carbon enablement emissions is still developing and industry standards may change, we will continue to evolve our methodology. This may result in a need to amend or update our disclosures and/or our ESG ambitions, goals, commitments and/or targets or our evaluation of progress against these.
We do not claim to be solely attributable for the carbon emissions avoided by the products and services we sell. Rather, we calculate carbon abatement so that we can better understand the potential scale of the carbon emissions that could be avoided, as a measure of how Vodafone contributes to the decarbonisation of society. Our carbon enablement metric has not been externally assured this year. Our carbon enablement target and metrics are currently under review in light of evolving methodologies for measuring the ‘net carbon impact’ of digital solutions.
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