68 Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Climate-related risk continued
existing internal policies, investing in energy efficiency within our networks, carbon price hedging, compliance readiness and governance over environmental claims continues to reduce residual risk exposure across the 1.5°C and 2°C scenarios. Following the evaluation of our existing and planned activities to manage transition risks, including the strategic implementation of our CTP, robust governance, and the execution of our risk management processes, our exposure to climate transition risks is materially reduced across all scenarios. Read more about our Protect the Planet strategy and targets on pages 28 to 32 Realising opportunities Our FY26 qualitative analysis indicates potential commercial opportunities across both the 1.5°C and 2°C scenarios. Growing demand for digital connectivity and technology solutions can support customers to decarbonise their operations and contribute to the broader sustainable economic transition. These solutions can also help to address environmental challenges by enabling the clean energy transition and driving energy and resource efficiency across sectors such as energy, transport, agriculture, buildings and manufacturing. There may also be opportunities for medium-term cost saving through investment in on-site renewable generation particularly in markets where energy costs and supply volatility are more pronounced. In a 4°C pathway, while decarbonisation-driven demand could be lower, similar digital connectivity and technology solutions could present opportunities to support customers in adapting to more severe climate impacts. While market sizing is uncertain and quantification remains inconclusive due to data limitations, our research indicates that digital connectivity and enablement remain a credible long-term growth area aligned to climate-trends.
of extreme weather events may increase operational disruption across our own operations and the wider value chain, especially in Africa. These insights continue to be embedded within our strategy and will further inform our CTP implementation, which sets out management actions and investments required to strengthen our business resilience. Insights from our climate scenario analyses are embedded into our long-range business and financial planning cycles, so that resilience measures inform strategic decision making, capital allocation and future technology enhancement (such as Mission Critical Communications and Vodafone Enhanced Power Initiative to enhance network resilience and satellite coverage to mitigate extreme-weather outages). Click to read our climate transition plan: vodafone.com/ctp Resilience to physical risks Our latest scenario analysis indicates that our physical risk exposure remains limited, with no material year-on-year change in overall risk profile. This reflects the relatively low inherent vulnerability of our asset base, particularly our high-value data centres and core network infrastructure, and the strength of our existing climate-resilient design, maintenance and business continuity processes. Despite more frequent global natural catastrophe events and global losses over the past year, insurance rates have remained stable, and we have not recorded a material increase in insurance claims relating to damage to our network or asset portfolio. We have experienced weather-related events affecting our mobile access base station network, for example, flooding in Mozambique disrupting Vodacom’s network, storms in Portugal and Ireland causing power outages linked to electricity supply board failures, which have not resulted in any significant damage to critical infrastructure or our higher-value assets, including data and technology centres. Insurance arrangements continue to provide comprehensive coverage for property damage and business interruption (though these policies do not formally
classify such incidents as climate-related), offering financial protection against acute weather events. It remains a key mitigation tool, transferring potential losses arising from physical risks, covering asset and contents loss and damage. Protecting the resilience and continuity of our network and infrastructure from climate-related weather events continue to underpin our strategy. We embed mitigation and adaptation measures across our asset’s lifecycle, from acquisition and design to operation, maintenance and replacement. Our policies require environmental and physical risk assessment for all critical assets, supported by ongoing monitoring of weather resilience. As part of our technology resilience framework, each core critical site is subject to annual physical risk assessment, incorporating climate-related hazard evaluation. Our business continuity processes minimise service disruption and operational downtime, including the ability to re-route traffic through alternative core sites if an asset is affected. We also have dedicated disaster recovery capabilities across our footprint to support reactive maintenance and service restoration. Building resilience into network infrastructure is a well-established component of our business-as- usual operations, independent of whether climate change is the primary risk driver of an event. As part of our ongoing strategy and risk management processes, we will continue to enhance resilience to physical climate risks, integrating high-priority climate adaptation actions into our planning, procurement, engineering design and business continuity practices as insights are generated through future scenario analysis, and as new technology emerges. Resilience to transition risks FY26 modelling, supported by refreshed data and cross-business stakeholder input, indicates that Vodafone’s transition risk exposure (across energy costs, regulatory compliance cost, and evolving stakeholder expectations) remains manageable across all climate pathways, when current and planned CTP initiatives are applied. Strengthening
Transition-related pressures are constrained in this scenario, owing to the assumption of minimal further climate policy intervention given current data availability. However, uncertainty remains and exposure to energy-market volatility and supply chain disruption may still emerge. This scenario could introduce transition risk exposure underscoring the importance of sustained adaptation actions and longer-range resilience planning embedded within our CTP. Building climate resilience into our business strategy As a fixed and mobile network operator, we operate extensive infrastructure spread over Europe and Africa. This geographic footprint exposes our business to a range of climate change physical impacts and transition risks. Our FY26 analysis continues to show that Vodafone’s core network and data centre infrastructure remains resilient across all scenarios assessed, supported by robust engineering standards and short term equipment replacement cycles (e.g. radio). Across the short- and medium- term, physical residual risks are not expected to lead to significant business interruption, cost or asset impairment at a Group level, with impact expected to remain manageable within the range of scenarios analysed, particularly across Europe. This resilience reflects the robust operational standards already embedded within our network infrastructure, which allow us to incorporate climate-adapted technological improvements into our normal end-of-life asset replacement programmes. Our review confirms that existing controls and mitigation activities in place continue to be effective, and our current risk profile remains broadly constant. We will continue to monitor, periodically reassess and update our highest priority risks for relevance, to maintain alignment with our evolving business and operational environment. Over the medium to long term, particularly under the higher warming pathways with limited global policy action, a rise in the frequency and severity
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