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Project Details


Vodafone Sustainable and Sustainability Linked Finance Framework Second-Party Opinion (2021)


Vodafone Group PLC

Project Type

Sustainability Linked Bond or Note

Industry Group

Telecommunication Services

Use of Proceeds

Socio-economic advancement; Employment generation; Access to essential services; Renewable energy; Green buildings; Energy efficiency;



Evaluation Date

Sep 2021

Evaluation Summary

Sustainalytics is of the opinion that the Vodafone Sustainable and Sustainability-Linked Finance Framework is credible, impactful and aligns with the four core components of the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, Social Bond Principles 2021, Green Loan Principles 2021 and Social Loan Principles 2021 (the “Use of Proceeds Principles”). The eligible categories for the use of proceeds – Energy Efficiency, On-site Renewable Energy, Green Buildings, Circular Economy, Access to Essential Services, Socio-economic Advancement and Empowerment, and  Employment Generation – are aligned with those recognized by the Use of Proceeds Principles and will lead to positive environmental and social impacts.  

Selection of Key Performance Indicators (KPIs)

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. 

Calibration of Sustainability Performance Targets (SPTs)

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.  

Bond Characteristics

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. 


Vodafone commits to report on an annual basis on its performance on the KPIs on its website, which is aligned with the SLBP and SLLP. Vodafone intends to disclose the information: (i) annually, through its integrated annual report and/or ESG addendum with an assurance statement from a statutory auditor, (ii) following the target observation date, through a verification assurance certificate published on the Vodafone website confirming that the performance of the KPI meets the relevant SPT, and (iii) periodically through its website any information on the level of ambition of the SPTs.


Vodafone commits to having an external verifier provide limited assurance verification on KPI performance at the SPT deadline, which is aligned with the SLBP and SLLP on verification.