Vodafone 2025 Annual Report

58 Vodafone Group Plc Annual Report 2025

Strategic report

Governance

Financials

Other information

Principal risks and uncertainties continued Watchlist and emerging risks

Watchlist risks Our watchlist risk process enables us to monitor material risks to Vodafone Group that fall outside our principal risks. We review the watchlist risks as part of the continuous risk management process. Any watchlist risks that increase in their significance to the Group are elevated to principal risks and are treated accordingly. Group watchlist risks include, but are not limited to: Environmental, Social and Governance (‘ESG’) Failure to meet stakeholder expectations on ESG performance and/or reporting may result in reputational damage, customer dissatisfaction, and/or increased cost of capital. Read more about our approach to ESG on pages 30 to 52 Read more about climate-related risk on pages 61 to 66 Governance and performance of investments Inadequate oversight, poor decision-making, and misalignment with strategic objectives, could lead to suboptimal investment outcomes. This risk encompasses the possibility of financial losses, reputational damage, and failure to achieve desired returns on investments. Read more about our investments in the ‘Strategic report’ on page 9

Emerging risks Emerging risks are characterised by their uncertain nature, constant change, and by their potential to materially affect the achievement of organisational objectives. We identify new emerging risk trends using inputs from the analysis of the external and internal environments, leveraging both the input from third-party publications and research as well as the knowledge and experience of our internal business experts. Additionally, we consider the time horizon for the identified emerging risks, allowing us to provide the appropriate level of focus and to plan mitigation strategies accordingly. As the evolution of emerging risks could be nonlinear and the speed of impact is difficult to predict, we have established a continuous process for monitoring emerging risks as an integral part of the Group’s enterprise risk management

framework. This allows us to be at the forefront of managing emerging risks, periodically assessing whether any of these risks have become material enough to be elevated to the principal risk category. We split our emerging risks into five different categories: technological, political/regulatory, economic, societal, and business environment, so that the relevant experts across the business have visibility of these risks and can assess the potential impacts and time horizon of these risks. Additionally, deep-dives and scenario analysis have been performed for selected emerging risks with the view to identify potential mitigation strategies should these risks materialise. Our emerging risks are provided to the Group RCC and to the ARC for further scrutiny.

Legal compliance Increased number of legal penalties, fines, and damage to the Company’s reputation. Additionally, it includes the risk of losing business and customer trust due to breaches of legal requirements. Read more about our anti-bribery, corruption and fraud policy on pages 43 and 44 Tax Tax risk covers our management of tax across the markets in which we operate and how we respond to changes in tax law, which may have an impact on the Group. Read more about our tax risk, our approach to tax, and our economic contribution at vodafone.com/tax The list of watchlist risks is reported to the Group Risk and Compliance Committee (‘RCC’) and to the Audit and Risk Committee (‘ARC’) alongside principal risks.

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