Second-Party Opinion Download

Sustainalytics considers KPI 1 to be very strong overall given that: (i) it measures performance on a relevant and material ESG issue for the Company, (ii) it directly measures its operational carbon performance – Scope 1 and 2, (iii) it covers the indirect emissions related to its operations (Scope 3), (iv) the calculation methodology is aligned with GHG Protocol Corporate Standard, and therefore (iv) it supports benchmarking against external emission reduction trajectories. Sustainalytics considers KPI 2 to be strong overall given that: (ii) it covers significant indirect emissions related to its operations – Scope 3 (Category 11: use of sold products), and (ii) the calculation methodology is aligned with the Carbon Trust and the Global e-Sustainability Initiative (GeSI), and (iii) it represents a positive step in quantifying a difficult to calculate but important share of Vodafone’s environmental impact.  Sustainalytics considers KPI 3 to be strong given that: (i) it measures performance on relevant and material issues for the Company, (ii) it is a direct measure of the performance of the Company, and (iii) follows a clear and consistent methodology that is similar to the one suggested by the Global Reporting Initiative for calculating management team diversity. Sustainalytics notes that while there are no applicable externally recognized benchmarks for this KPI, it is benchmarkable and enables easy comparison across various industry players. Sustainalytics considers KPI 4 to be strong given that: (i) it measures performance on relevant and material issues for the Company, (ii) it is a direct measure of the Company’s performance in improving financial inclusion, and (iii) it follows a clear, consistent and externally verifiable methodology. Sustainalytics notes that while there are no applicable externally recognized benchmarks for this KPI, impact reporting based on the number of beneficiaries served is commonly used in sustainable and impact financing. 

Overall, Sustainalytics considers the SPTs to align with Vodafone’s sustainability strategy. Sustainalytics considers Vodafone’s SPT 1 to be highly ambitious given that: (i)  it is above its historical performance, (ii) it is above or aligned with its industry peers, and (iii) it presents an absolute GHG reduction aligned with a 1.5°C scenario. Sustainalytics considers Vodafone’s SPT 2 to be ambitious given that it presents a material improvement compared to past performance and represents a significant absolute amount of avoided emissions  but  cannot be assessed for alignment with market best practice or science-based benchmarks. Sustainalytics considers SPT 3 to be ambitious given that it presents a material improvement compared to past and peer performance. Sustainalytics considers Vodafone’s SPT 4 to be ambitious given that it is above historical performance and aligned with peer performance.  

Vodafone intends for the financial characteristics of the instruments issued under this Framework to be tied to the achievement of one SPT or multiple SPTs. If the SPT(s) have not been reached by the target observation date, Vodafone will pay a financial penalty in the form of an increase in the coupon margin or the payment of a premium by an amount that will be specified in the Sustainability-Linked Finance Instruments’ documentation.  The financial penalty will be applicable if an independent auditor is not able to provide a verification assurance certificate regarding the performance level of each SPT or if the company does not publish its performance for the relevant SPT within the time specified in the bond documents.