Vodafone Group PLC

#### Governance\n\n# Ensuring accountability and responsibility for climate-related risks and opportunities\n\nGovernance 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 climate-related risks and opportunities.\n\nBoard oversight\nThe Board approves the strategy and as part of this, has reviewed Vodafone's purpose and Planet commitments to reduce our environmental impact, such as reaching 'net zero' emissions by 2040. The Board oversees progress against our strategic targets on an ongoing basis and approves disclosures contained in the Annual Report.\n\nClick to read more about Planet at\n**vodafone.com/our-purpose/planet**\n\nThe Board has responsibility for the Group's objectives, annual budget and funding strategy. We continue to track and report on our capital expenditure on energy efficiency across our business, and the positive impact achieved through investment of our €750m Green Bond, which is discussed further in the case study on page 15.\n\nTo ensure the Board has sufficient oversight of Vodafone's sustainable business strategy and performance, including climate-related targets, the Board has approved the establishment of an ESG Committee. The Committee will be chaired by Maria Amparo Moraleda Martinez, a Non-Executive Director.\n\nThe Group External Affairs Director leads the Planet agenda as part of our purpose-led strategy and has overall accountability for climate change action, which includes providing updates to the Board on the progress towards our climate-related goals. The Group External Affairs Director reports directly to the Chief Executive and is a member of the Group Executive Committee ('ExCo').\n\nOn an annual basis, the proposed principal risks, risk watchlist and emerging risks are reviewed and approved by our ExCo before being submitted to the Audit and Risk Committee ('ARC') and the Board. In line with our Group risk management framework, the ARC meets quarterly to receive updates on how our principal and watchlist risks are being managed across Vodafone.\n\nFurther details on our governance structures in relation to risk\n[management can be found in the Annual Report.](http://vodafone.com/ar2021)\n**vodafone.com/ar2021**\n\n##### "Since joining the Board in 2020, it has been very clear that Vodafone's management take their responsibilities to the environment seriously. Given the importance of this matter to Vodafone, our customers and the societies in which we operate, I am supportive of Board oversight and the integration of material environmental, social and governance ('ESG') themes within Vodafone's strategy."\n\nMembers of our Board are engaged on the topic of climate change\nexternally. For example, this year:\n\n– Dame Clara Furse DBE became Chairman of the UK Voluntary\nCarbon Markets Forum, establishing a group that aims to\noperationalise a global, high integrity market for voluntary\ncarbon offsets, an essential component of an accelerated and\neconomically productive transition to net zero.\n– Our Chief Executive, Nick Read, joined the EU Green Digital Coalition\nas a founding member and was appointed to International\nTelecommunications Union's Broadband Commission for\nSustainable Development. Both bodies have climate change\n\n###### TCFD disclosure recommendations: Governance\na. Describe the board's oversight of climate-related risks and opportunities.\nb. Describe management's role in assessing and managing climate-related\nrisks and opportunities\n\n#### Governance continued\n\nManagement's role\nReporting to the Group External Affairs Director is the Group Director,\nSustainable Business & Foundation, who has accountability for the sustainable\nbusiness strategy, including the UN Sustainable Development Goals ('SDG')\nagenda. The Head of Sustainable Business is responsible for developing and\nexecuting the strategy and providing weekly updates that include any\nclimate-related issues of relevance to the Company that can be\ncommunicated to the Group Executive Committee when relevant.\n\nThe Head of Sustainable Business manages the Sustainable Business team\nthat includes the Environment Manager, whose responsibilities include\ncreation, monitoring and reporting on climate change programmes and\ntargets, such as the carbon reduction goals, Science Based Targets\ncommitment, and Planet agenda actions.\n\nGiven energy usage is a material part of our climate change impact,\nthe Chief Technology Officer has the responsibility for energy use and\nmanaging the performance of the network, including overseeing energy\nefficiency improvements.\n\nAt the 2020 AGM, shareholders approved the current remuneration policy\nwhich incorporates our ESG priorities in the executive long-term incentive\nplan. For FY21, this measure included a specific greenhouse gas ('GHG')\nreduction ambition linked to the previous 2025 target of reducing our\nemissions by 50% from the FY17 baseline.\n\nCovering the climate impacts to our business, the Group Head of Risk has\nled the TCFD programme of work that is discussed throughout this report.\nClimate change risk and progress on the TCFD work has been reported\nto the Executive Committee and other key stakeholders through our annual\nprincipal risk assessment process and through meetings with the\nsponsoring executives.\n\nThe materiality assessment, a part of the TCFD programme, this year included\ncollaboration with the local risk and sustainability experts in five of our largest\noperating subsidiaries. The work was conducted using the overarching\nGroup risk management framework, enabling effective governance and\nmanagement team oversight at Group and in our local markets.

Reflecting the growing need to ensure our approach is integrated into our strategy, this year the Board formally approved the establishment of a new Committee of the Board, the ESG Committee. Chaired by Amparo Moraleda, the role of the Committee is to provide oversight of Vodafone's Environment, Social and Governance ('ESG') programme, sustainability and responsible business practices. The Committee also provides oversight of Vodafone's contribution to the societies we operate in under our social contract, which is the partnership we wish to develop with governments, policy makers and civil society. [...] To ensure the Board has sufficient oversight of Vodafone's sustainable business strategy and performance, including climate-related targets, the Board established an Environment, Social, and Governance ('ESG') Committee in 2021. The Committee is chaired by Amparo Moraleda, a Non-Executive Director, and is responsible for approving the ESG strategy, including climate-related targets and KPIs, and monitoring progress. [...] On an annual basis, the proposed principal risks, watchlist risks and emerging risks are reviewed and approved by the Executive Committee ('ExCo') before being submitted to the Board's Audit and Risk Committee ('ARC') and the Board. In addition, the ARC has oversight of the material climate-related risks, as well as an overview of the level and effectiveness of key controls in place. [...] 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-led strategy and has overall accountability for climate change action within the Group. This includes providing updates to the Board on the progress towards our climate-related goals. Reporting to the Chief External and Corporate Affairs Officer is the Group Director, Sustainable Business & Foundation, who has accountability for the sustainable business strategy, including the UN Sustainable Development Goals ('SDG') agenda. The Head of Sustainable Business is responsible for developing and executing the strategy and providing updates that include any climate-related issues of relevance to Vodafone that can be communicated to the Executive Committee when required. [...] The Head of Sustainable Business manages the Sustainable Business team that includes the Environment Manager, whose responsibilities include creation, monitoring and reporting on climate change programmes and targets, such as our carbon reduction goals, Science-Based Targets commitment, and Planet agenda actions. [...] Covering the climate impacts to our business, the Group Head of Risk has led the TCFD programme that is discussed throughout this report. Climate change risk and progress on aligning the TCFD recommendations have been reported to the Executive Committee and other key stakeholders through our annual principal risk assessment process and through meetings with the sponsoring executives.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Vodafone's policy engagements are governed and coordinated by Group External Affairs. Any policy engagement regarding energy and climate change must follow our environmental policy requirements which set out our position on energy and climate change. External affairs professionals within Vodafone are provided with training to ensure they are aware of the requirements of the policy. Annually, as part of our environmental data collection process, we ask all markets to describe the engagements they have taken place in. In this way, we ensure that engagements are consistent with our overall climate change strategy.

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]Vodafone's policy engagements are governed and coordinated by Group External Affairs. Any policy engagement regarding energy and climate change must follow our environmental policy requirements which set out our position on energy and climate change. External affairs professionals within Vodafone are provided with training to ensure they are aware of the requirements of the policy. Annually, as part of our environmental data collection process, we ask all markets to describe the engagements they have taken place in. In this way, we ensure that engagements are consistent with our overall climate change strategy.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes