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Vodafone Group Plc Task Force on Climate-related Financial Disclosures Report 2023
Overview
Risk Management
Metrics and Targets
Governance
Strategy
Governance
Ensuring accountability and responsibility for climate-related risks and opportunities
In November 2022, the ESG Committee reviewed its terms of reference and agreed to introduce joint oversight of selected ESG matters by the ESG Committee and the Audit and Risk Committee. This will be executed through increased sharing of papers between the committees, and a new joint meeting each May to review ESG disclosures and identify focus areas for the following year. Management’s role The Chief External and Corporate Affairs Officer, a member of the Executive Committee, is the sponsor for the Planet agenda as part of our purpose strategy, and has overall accountability for climate change action within the Group. This includes providing updates to the Board on progress towards our climate-related goals. Reporting to the Chief External and Corporate Affairs Officer is the Group Director, Sustainable Business and Foundation, who has accountability for the sustainable business strategy. The Head of Sustainable Business reports to the Group Director, Sustainable Business and Foundation and is responsible for developing and executing the strategy and providing updates that include any climate-related issues of relevance to Vodafone, which are communicated to the Executive Committee as required. The Head of Sustainable Business manages the sustainable business team which includes the Environment Lead, whose responsibilities include developing, monitoring and reporting on climate change programmes and targets, such as our carbon reduction goals, Science-Based Targets commitment and Vodafone’s broader Planet agenda. The Planet Steering Committee consists of senior management from the functions responsible for delivering climate action and initiatives, reporting to the Chief External and Corporate Affairs Officer. The steering committee is supported by several cross-functional working groups, who cascade strategic plans from Group to operating company level. Since energy usage is a material part of our climate change impact, the Chief Network Office (‘CNO’) has responsibility for energy use and managing the performance of the network, including overseeing energy efficiency improvements. In addition, as the most significant physical risks to Vodafone are damage to infrastructure and interruption or reduction in the quality of our services, our CNO is ultimately responsible for managing the physical climate-related risks. In relation to the climate impacts to our business, the Group Head of Risk leads the TCFD programme that is discussed throughout this report. Climate change risks and progress on aligning to the TCFD recommendations are reported to the Executive Committee and other key stakeholders through our annual principal risk assessment process and through meetings with the sponsoring executives. Next steps in our TCFD programme: Having established a formal climate governance structure with clear accountabilities and responsibilities through Board, management and operational levels, our next steps are to continue formalising and embedding the structure to strengthen and accelerate the development of our strategy, deliver climate action, and climate reporting. We are also looking to form a cross-functional working group with specific responsibility for monitoring climate-related risks and opportunities, to ensure that we continue to address these as part of our wider Planet agenda, as well as meet our climate reporting obligations effectively over the long term.
Climate governance
Board
ESG Committee
Audit and Risk Committee
Executive Committee
Chief External and Corporate Affairs Officer Group Director, Sustainable Business
Purpose and Reputation Steering Committee Planet Steering Committee
Risk and Compliance Committee Group Head of Risk
Governance is defined in the TCFD recommendations as “a set of relationships between an organisation’s management, its board, its shareholders, and other stakeholders. Governance provides the structure and processes through which the objectives of the organisation are set, progress against performance is monitored, and results are evaluated”. It is recommended that organisations establish and disclose appropriate internal governance processes for both climate-related risks and opportunities.
Board oversight Our Company strategy is approved by the Board, which includes our purpose and Planet commitments to reduce our environmental impact, such as reaching net zero emissions across our full value chain (Scope 1, 2 and 3) by 2040 and other targets. The Board also oversees progress against these targets and approves disclosures contained in the Annual Report, the ESG Addendum and the TCFD report. To ensure the Board has sufficient oversight of our sustainable business strategy and performance, including climate-related targets, the Board established an Environment, Social and Governance (‘ESG’) Committee in 2021, which meets three times per annum. Chaired by Amparo Moraleda, a Non-Executive Director, the ESG Committee is responsible for approving the ESG strategy, including climate-related targets and KPIs, and monitoring progress. In order to remain well-informed on specific climate-related topics that are impacting Vodafone, the ESG Committee receives regular updates and hosts deep dives with subject matter experts. In 2022, these included Scope 1, 2 and 3 emissions, and circularity. On an annual basis, Vodafone’s proposed principal risks, watchlist risks and emerging risks are reviewed and approved by the Executive Committee before being submitted to the Board’s Audit and Risk Committee (‘ARC’) and the Board. Climate change has been, and remains one of our watchlist risks and so the ARC has oversight of all material climate-related risks, which are reported on an annual basis.
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