69
Vodafone Group Plc Annual Report 2026
Vodafone Group Plc Annual Report 2026
Strategic report
Governance
Financials
Other information
Climate-related risk continued
Risk management We apply a structured annual review process to identify, assess, and manage climate-related risks across the Group, integrating these into our broader global enterprise risk management framework. Our approach brings together insights from our markets, Group functions and external expertise to maintain a consistent view of risk exposure and prioritisation across time horizons and climate pathways. It is supported by updated scenario modelling and continuous monitoring of environmental risk drivers. Read more about our global enterprise risk management framework on page 60 (1) Identify We identify climate-related risks and opportunities through our established identification process, by reviewing key internal and external information. Insights on emerging trends and current climate impacts are gained from media, industry and regulatory publications, white papers and prior analyses. Internal and external experts are consulted to embed business-relevant climate considerations and capture evolving sector- specific insights. Our principal risk identification process combines top-down and bottom-up inputs from local markets and Group functions on their operating environments. This approach enables us to align a variety of risk observations with strategic priorities and consider the most relevant long-term climate-related threats and opportunities to the overall risk profile, alongside other strategic and business risks. Read more about our principal risks on pages 61 to 62 Note: 1. Physical risk analysis covers Group physical assets in place as at 31 March 2025.
(2) Measure We apply our annual scenario analysis methodology described under Strategy to evaluate likelihood and severity of risks. This assessment is jointly coordinated by the Group Head of Risk and Head of Sustainable Business at an operational level. Our impact severity is based on the potential financial exposure to business, operations, damage to brand and corporate reputation. This year, we have performed a refreshed quantitative assessment, using the same model and approach as last year to deepen our understanding of the potential financial risk exposure over different time horizons and temperature pathway scenarios. This risk model incorporates Vodafone’s greenhouse gas (‘GHG’) emissions data alongside economic forecasting and modelling, including sector growth, carbon price, energy mix and sector decarbonisation rates. It models the materialisation of potential costs, revenue loss, asset impairment and business interruption of each risk. Our defined approach to climate-related risk assessment builds on previous qualitative and quantitative analysis performed on our physical assets 1 and it provides us with a potential inherent risk faced by our business. In assessing the likelihood of an impact, we consider the probability that it will materialise based on current trends, forecasts and projections, levels of uncertainty as well as existing or planned mitigations. This assessment provides us with the residual risk exposure to climate change. Our FY26 scenario analysis process and outcomes are detailed in the Strategy section of this report. Read more about our definitions for scenarios and time horizons on page 67
(3) Manage Climate-related risks are managed through the controls and activities embedded within our CTP and existing operational frameworks, as detailed under the Governance and Strategy section of this report. Read more about our ESG governance model on page 25 Management actions include resilience measures across network infrastructure, energy hedging, energy optimisation, compliance readiness, and strengthened governance of environmental claims. For FY26, climate-related risk is reflected within our sustainability risk category and recognised across other risk types, given its longer-term nature beyond the three-year business planning cycle. Many elements are already captured within existing principal risks, such as extreme weather impacting our network resilience, changes in policy increasing compliance or operating costs, or volatility in energy markets impacting expenditure. This integration allows us to take a holistic view across short and longer terms. We will periodically assess the risk as this agenda continues to evolve. Each identified risk has a clearly assigned owner responsible for developing and implementing mitigation actions and control activities. Key actions for our highest priority climate-related risks and opportunities are embedded within our CTP, with clear accountability for tracking and monitoring management progress and as expectations and regulatory requirements continue to evolve. Click to read our climate transition plan: vodafone.com/ctp
(4) Assure and monitor We apply the Group’s Three Lines Model to provide structured and proportionate assurance over climate-related risks and controls. In the first line, control owners within Group and local markets, operate climate-related controls and adhere to relevant policies, procedures and other relevant guidance. The second line, policy owners and Group risk, assurance and controls team, provide oversight and challenge across these controls, and also review these policies and recommend updates to strengthen design and performance. The third line, internal audit, provides independent assurance over the effectiveness of climate- related processes and controls across the Group. (5) Report Climate-related risks are reported through internal governance structures, outlined in the Governance section of this report. The Group risk team reports Vodafone’s principal and emerging risks to the ExCo and the Board, including any material climate-related risks that are identified through risk analyses. During the year, if climate-related risks are identified at operational level, they are reported to the local risk and compliance committee within each market and escalated to the Group RCC if required. We publish an annual external disclosure on the Group’s climate-related risks and opportunities, enclosed within this report. In addition, Vodacom Group publishes a standalone report, which also discloses details of our climate-related risk and opportunity assessment for our markets in Africa. Click to read Vodacom Group’s latest TCFD report: vodacom.com/reporting-centre.php
Powered by FlippingBook