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Vodafone Group Plc Task Force on Climate-related Financial Disclosures Report 2023
Overview
Risk Management
Metrics and Targets
Governance
Strategy
Strategy continued
Figure 5 Transition risk impact on Vodafone by time horizon and climate scenario Our climate scenarios
Our latest full scenario analysis was conducted in 2020, covering both physical and transition risks using a primarily high-level qualitative approach. Figures 5, 6 and 7 outline the results. We intend to update our scenario analysis to bring it in line with our revised list of material risks and opportunities, and time-horizons, as shown in Figure 4. As a regulated technology-based business that is highly dependent on energy, we could be significantly affected by changes in regulations and market trends (particularly energy prices) as society and the economy transition to a low-carbon world. Our 2020 scenario analysis highlighted carbon taxation, energy regulation and climate litigation (in the event of failing to meet our net zero targets) as the greatest transition risks. These risks are most prevalent under our Scenario 1 (Early policy action: Smooth transition) and Scenario 2 (Late policy action: Disruptive transition) and given the nature of transition risks, least prevalent under Scenario 3 (No policy action: Business as usual). Our most recent review of climate risks through a high-level qualitative survey and discussions with the subject matter experts across FY23 indicates that carbon taxation and changes in energy market regulation and prices remain of highest concern to our internal stakeholders, with litigation risks considered to be less pronounced and longer term. We continue to monitor policy and regulatory trends relating to energy efficiency and storage, and cross-border carbon pricing, to understand potential impacts on the telecommunications sector.
Read more on page 16 1. Early policy action: Smooth transition
<2 °C
2. Late policy action:
<2 °C 3. No policy action: Business as usual
<3 °C
Disruptive transition
Potential impact across time horizons
Short-term (2020-2025)
Medium-term (2025-2035)
Long-term (2035-2050)
Climate factor
Risk
Scenario
Risk: Transition
Consumer preferences Loss of customers
1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
Temperature
Cooling utilities consumption
Offsets
Emissions offset cost
Litigation
Climate litigation
Carbon taxation
Carbon taxation
Regulation
Energy efficiency regulation
Please note the information on this page Is based on the high-level scenario analysis conducted In FY21.
Increasing magnitude of potential impact of risk before mitigation activities
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