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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
While some transition risks may only impact us in the medium to long term, volatility in the energy market is a short-term risk that we have been actively managing. Actions to improve energy efficiency and limit exposure to energy price volatility are embedded into our current business strategy and financial plans. We have consistently invested in energy efficiency programmes and have increased this investment over the last year in response to energy price volatility. We have dedicated energy teams within our markets to monitor and achieve energy reductions. We have also implemented processes to ensure that we regularly and proactively review physical site assessments and upgrade our infrastructure to ensure energy efficiencies are maintained. Finally, we are actively increasing the proportion of renewable electricity purchased through power purchase agreements (‘PPAs’) as part of our energy procurement strategy to limit our exposure to future energy price volatility. We communicate and report clearly and transparently on our ambitious climate strategy, to manage our exposure to reputational risks such as greenwashing. This year we strengthened governance structures and processes to manage legal and reputational risks related to potentially misleading environmental claims. Lastly, we have multiple ways of tracking consumer preferences and investor sentiment in relation to sustainability and take action based on the feedback when appropriate.
Opportunities Our 2020 analysis identified three broad areas of climate-related opportunity for our business, relating to increasing market valuation, access to sustainable financing and improved product efficiency. These opportunities are enabled by the transition to a low-carbon economy and therefore the potential positive impact is the highest under Scenario 1 (Early policy action: Smooth transition) and Scenario 2 (Late policy action: Disruptive transition). In 2022, our review highlighted two specific opportunities that we could exploit that would underpin these. We identified that sustainable procurement could give us the opportunity to reduce costs, on the basis that this will limit our exposure to climate risks in our supply chain. However, the most significant opportunity relates to developing new product lines to enable our customers (particularly enterprise customers) to decarbonise, and helping to deliver a twin digital and green transformation through our digital networks and technologies. Our connectivity solutions can help our customers and wider society to achieve energy and resource efficiency improvements through the use of Internet of Things (‘IoT’) and connected solutions. We have already begun to develop and promote IoT products and services that enable carbon savings, such as vehicle telematics systems, remote patient monitoring in healthcare and precision agriculture solutions. There is further potential for our products, both IoT and wider digital connectivity solutions, to accelerate the green digital transition, opening up potentially significant markets and growing top-line revenue.
Next steps in our TCFD programme: We believe that the actions implemented and integrated into our future business plans adequately build climate resilience into our business strategy. However, we recognise the need to continue developing our understanding and quantification of climate risks, opportunities and mitigations and to further integrate these into financial planning. We remain committed to doing this as part of our ongoing climate journey. As a next step, we are developing our first climate transition plan outlining our key areas for action, collaboration, and advocacy to achieve our goal of net zero emissions across our full value chain by 2040. Our climate transition plan will include further definition of the mitigating actions for our medium- and long-term climate-related risks and opportunities, so that the associated resources and investment can be more explicitly integrated into our business and financial planning processes. We also intend to update our full scenario analysis to bring it in line with our revised list of material risks and opportunities, and related time horizons,.
Read more about carbon enablement and our green digital solutions in our Annual Report
We remain committed to working closely with other information and communication sector (ICT) companies to drive investment in digital solutions which help mitigate climate change.
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