11
Vodafone Group Plc Task Force on Climate-related Financial Disclosures Report 2023
Overview
Risk Management
Metrics and Targets
Governance
Strategy
Figure 6 Physical risk impact on Vodafone by time horizon and climate scenario Our climate scenarios Strategy continued
We are a large owner and operator of telecommunications infrastructure across the markets we operate in. This increases our exposure to the physical risks of climate change due to the increased risk of asset damage or loss. As part of our climate impact identification and materiality assessment work, we identified the key climate drivers most likely to impact our assets and infrastructure. In contrast to transition risks, physical risks are most severe under Scenario 3 (No policy action: Business as usual) given this scenario sees a world where warming exceeds a 3°C threshold. Based on the latest scientific studies, we know this is the scenario under which physical climate-related events will be more frequent and severe, therefore increasing the impact on Vodafone. However, we still observe some impacts of physical climate risk at a 1.5°C-2°C level of warming under Scenario 1 (Early policy action: Smooth transition) and Scenario 2 (Late policy action: Disruptive transition). Physical risks would also have a significantly bigger impact on our business in the long term compared to short term, as the levels of warming rise regardless of the scenario. Building on the full scenario analysis results outlined above, we conducted a high-level quantitative assessment of physical climate-related risks in 2022 (as shown in Figure 3). Consistent with our 2020 scenario analysis, it also found that these physical risks could materialise in any future scenario, but are most pronounced in scenarios with late or no policy action.
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
Disruptive transition
Potential impact across time horizons
Short-term (2020-2025)
Medium-term (2025-2035)
Long-term (2035-2050)
Climate factor
Risk
Scenario
Risk: Physical
Fire
Wildfires
1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3
Flooding
Flooding
Sea level
Sea level rise
Sea surface temperature Storms
Precipitation
Rainfall
Precipitation
Service quality
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
Powered by FlippingBook