39 Vodafone Group Plc Corporate Responsibility Report 2007
Performance and data summary
Year ended 31 March
2007 2006 2005
Financial
Group revenue (£m) 31,104 29,350 26,678
Adjusted Group operating profi t (before goodwill amortisation and exceptional items) (£m) 9,531 9,399 8,353
Market capitalisation as at 31 March (£bn) 71.6 72.4 90.8
Network infrastructure additions (£m) 2,404.3 2,350 3,064
Revenue distribution
Suppliers (£m) 20,433 25,914 23,799
Employees (£m) 2,050 2,106 2,100
Shareholders returns (£m) 12,636 9,257 6,076
Lenders (£m) 525 402 405
Tax Authorities (corporation taxes and social security only) (£m) 2,544 1,939 1,826
Retained for growth (£m) (6,483) (2,087) 1,503
Employment
Total number of employees
(1)
66,343 62,672 57,759
Number of employees included in the scope of this report 59,909 55,110 –
Employee turnover rates (%) 10.6 12.1 12.2
Occupational health and safety/number of lost-time accidents 156 151 163
Average training spend per employee (£) 530 550 –
Number of women in the top senior management roles 22 out of 204 32 out of 261 31 out of 238
Number of nationalities in the top senior management roles 20 18 23
Environment & network
Number of base station sites 83,561 97,899 97,787
Number of mobile phones collected (million) 1.03 1.37 1.14
Proportion of mobile phones reused (%) 55 30 37
Total CO
2
emissions (millions of tonnes) 1.23 1.31 1.27
Approximate CO
2
emissions from company vehicles (tonnes) 67,000 47,000 56,000
Proportion of network equipment waste reused and recycled (%) 97 97 96
% of people who are suspicious of mast placements (average across 15 markets) 7 – –
Number of countries who have announced agreements on network sharing 3 – –
Customers
Closing proportionate customers (m) 206.4 170.6 140.1
Vodafone Passport customers (m) 11 5.6 –
Vodafone Mobile Connect card customers (m) 1.4 0.7 –
Vodafone live! active devices 32.3 27.1 25.6
Mobile voice usage (billion minutes) 245.0 177.3 143.1
Complaints against Vodafone advertising upheld by the relevant advertising authority 30 17 –
Number of markets where Vodafone is rated 1st or 2nd most responsible telecommunications
company in its behaviour towards the environment, local communities and society 12 out of 13 – –
Social investment
Total contributions to social projects (£m) 43.2 38.1 34.6
(1) Figures used in our Annual Report. It represents the average number of employees in the fi nancial year (rather than at 31 March 2007), incorporating employees of newly acquired entities from
the day of acquisition, and the Group's share of employees in joint ventures.
Vodafone Group Plc
Registered offi ce:
Vodafone House
The Connection
Newbury
Berkshire
RG14 2FN
United Kingdom
Registered in England No.1833679
Tel: +44 (0) 1635 33251
Fax: +44 (0) 1635 45713
www.vodafone.com
Find out more
• Visit our website. Find a complete account of our CR activity at www.vodafone.com.
• Read our CR Dialogues. This series of research papers is designed to stimulate
debate on specifi c emerging issues.
• Tune in to local issues. Eleven of our operating companies publish their own
CR reports focusing on local and national issues (see below).
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Get in touch
We welcome your feedback on our CR performance and your views
on this report. Please contact us at: responsibility@vodafone.com
The potential of
communications
Vodafone Group Plc
Corporate Responsibility Report
For the year ended 31 March 2007
Vodafone Group Plc Corporate Responsibility Report 2007 37
New commitments
We have Progress We will Deadline
Launched a range of mobile money-transfer services in different markets, announced plans to introduce ultra low-cost handsets,
introduced the Vodafone Speaking Phone and committed £5 million to the development of social products.
Due by March 2008 Introduce three signifi cant products with features that reduce exclusion. March 2008
Conducted research to understand the needs of blind and visually impaired consumers. Due by March 2010 Reduce the level of preventable exclusion by at least a third. March 2010
Commissioned a global survey of expert views on how seriously Vodafone is taking its responsibilities relating to mobile phones,
masts and health.
✔ Improve stakeholder opinion on how responsibly Vodafone is acting regarding mobile phones, masts and health (from the
2006/07 baseline/survey results).
March 2008
Developed and began reporting against a series of key performance indicators to measure our implementation of the Group policy
on responsible network deployment and track stakeholder opinion.
✔ Update existing network deployment guidelines and assess local operating companies’ compliance with global policy .
Continue to track public views on our network deployment and defi ne a target to increase public acceptance.
March 2008
March 2008
Of the consumers surveyed in 12 markets, the majority rated Vodafone as the most responsible and fair telecommunications
company in six countries, second most responsible in fi ve and third in one. However, we did not survey consumers in all markets
where we operate so we are not able to objectively assess our position as leader overall.
✘40% Launch a campaign in each local operating company to address a locally relevant customer issue. March 2008
Engaged with key stakeholders about consumer privacy issues through a range of channels including a multi-stakeholder
engagement process to develop principles on freedom of expression and privacy for the ICT industry.
✔ Conduct consumer research and publish global guidelines on social networking sites and mobile advertising. March 2008
All our operating companies have either implemented or set a target to implement an internet fi lter, except some currently with
low data usage.
✘60% Launch an online privacy awareness programme in all our local operating companies to describe Vodafone’s privacy policy and what
it means for employees.
March 2008
Responses from local operating companies to a self-assessment questionnaire indicate that customers are able to report spam in
all markets in accordance with our anti-spam policy.
✔
Continued to work with other ICT companies to establish a common approach to supplier assessment. A common self-assessment
questionnaire and auditing methodology has been developed through GeSI and EICC.
✔ Implement a project with two strategic Chinese suppliers to manage CR risk within our sub-tier suppliers . March 2008
Rolled out our common supplier qualifi cation process within our Group purchasing function and in all local operating companies. ✔ Achieve 100% follow up within three months for all local and global suppliers identifi ed as high risk during qualifi cation. March 2008
Completed 17 site evaluations in the 2007 fi nancial year, bringing the total to 36 over the past three years. ✔
Established a whistle-blowing mechanism to encourage reporting of any unethical behaviour by Vodafone or its suppliers. ✔
Reported progress against our Group target to reduce network energy carbon dioxide emissions per unit of data transmitted. ✔
Achieved a 29% reduction in network energy carbon dioxide emissions per MB traffi c in the 2007 fi nancial year. Due by March 2011 Achieve a 40% reduction in network energy carbon dioxide emissions per MB traffi c. March 2011
Increased the number of phones collected for reuse and recycling by 59% from the 2005 fi nancial year. ✔ Collect a further million handsets. March 2008
Handset recycling programmes established in Albania, Egypt and Romania. ✔
Recycled 97% of network equipment waste. ✔ Send for reuse and recycling 95% of network equipment waste. March 2008
Our global system to track how many employees have completed a performance dialogue is not yet being used effectively across
the whole Group. Approximately 51% of employees recorded their completion of a performance dialogue in the system.
✘50% Ensure that 90% of employees in the business have an annual performance dialogue and development discussion with their
line manager.
March 2009
Of the approximately 18,000 employees surveyed this year, 80% are proud to work for Vodafone, equal to the high performance
norm of the ‘World’s Most Admired Companies’ survey.
✔ Ensure that 75% of operating companies deliver top quartile employee engagement scores within their local markets. March 2009
Regrettably, the number of work-related accidents resulting in lost time increased by 3.3% this year. This is in part due to improved
reporting in local operating companies. Despite last year’s report on an early achievement of the target, we have decided to
continue to track this indicator due to this year’s results. We will report on progress from the 2004/05 baseline next year using the
original target date.
Due by March 2008 Reduce work-related accidents resulting in lost time by a further 10% (from the 2004/05 baseline). March 2008
www.vodafone.com/responsibility/commitments
Vodafone Group Plc Corporate Responsibility Report 2007 38
Front cover: The mobile
phone shows a text
message sent by the
mobile payment service
M-PESA, confi rming
a money transfer.
Material issues: Our response
This is Vodafone’s seventh Corporate Responsibility (CR) Report, covering
the year ended 31 March 2007. The theme of the report is the potential of
communications. Extending access to communications is the area where
we feel Vodafone can make the biggest contribution to society.
This printed report is structured to give a response to the issues that are most
material to our business. The table below outlines the key elements of our
response to stakeholders on these important issues and shows on which page
more information can be found.
We provide more detail about a wider range of issues on our CR website at
www.vodafone.com/responsibility. A list of further information available on the
web is provided in each section of this report.
Additional information on our business and fi nancial performance, corporate
governance, regulatory issues and directors’ remuneration is provided in our
Annual Report for the year ended 31 March 2007.
Additional information in this report
Chief Executive Arun Sarin answers key questions 1
About Vodafone 2
Stakeholder engagement 4
How we manage corporate responsibility 6
Foundations 30
Views from experts on key issues 32
About this report 34
Assurance 34
Objectives and commitments 36
Performance and data summary 39
Issues Main stakeholders affected Vodafone’s response see page
Extending
access to
communications
Customers, governments,
development agencies and
communities
We continue to research the socio-economic impact of mobile and
develop products with a high social value. Our focus is on enabling
fi nancial transactions, international remittances, developing low-
cost handsets and reducing preventable exclusion.
8
Mobile phones,
masts and health
Customers, communities,
regulators, governments,
the public
Vodafone recognises there is public concern about the safety
of radio frequency fi elds from mobile phones and base stations.
We continue to make objective information widely available
and engage openly with stakeholders on this issue.
12
Responsible
network
deployment
Communities, local councils,
landlords
Our Group policy and guidelines on responsible network
deployment set consistent standards for our operating
companies. Vodafone continues to engage with local stakeholders
in the selection and management of base station sites.
14
Earning the trust
of our customers
Customers, regulators, content
providers, child protection NGOs
Access controls have been installed by all operating companies
that offer age-restricted content. Vodafone signed the European
Framework for safer mobile use by younger teenagers and children.
16
Clear pricing Customers and regulators Vodafone Passport is now available in 13 markets. The average
cost of European roaming calls has been cut by 40% and the
cost of calls can be easily checked by text or online.
17
Privacy Customers, governments,
human rights and civil liberties
groups
Vodafone is participating in a multi-stakeholder dialogue to
establish principles on freedom of expression for the industry.
Privacy offi cers have been appointed in all operating companies.
18
CR in our supply
chain
Workers in developing countries,
suppliers, NGOs
CR has been incorporated into our supplier qualifi cation process
across the Group. We are working with the industry to develop a
common approach to CR supply chain management.
20
Energy use and
climate change
Governments, communities,
environmental NGOs
Our main focus is on energy used in the network: identifying
opportunities to reduce energy use in our base stations and
working with suppliers to improve the energy effi ciency
of new network equipment.
22
Reuse and
recycling
Customers, handset
manufacturers, environmental
NGOs, governments
All our operating companies have handset recycling
programmes in place.
24
Employment Employees We launched a new employee strategy this year, covering six key
areas of people management.
26
Ethics Employees, suppliers Our ‘Speak Up’ programme encourages suppliers to report
ethical concerns via an anonymous third party hotline. We
intend to extend this programme to our employees next year.
28
Public policy
and tax
Governments Openness and transparency are the key elements of our
approach in dealing with governments on these issues.
29
Vodafone Group Plc Corporate Responsibility Report 2007 1
Chief Executive Arun Sarin answers key questions
Vodafone’s global reach touches on many aspects of corporate responsibility.
A number of stakeholders have asked us questions during the year and here
Vodafone Group CEO, Arun Sarin, responds to some of the key themes raised:
How do mobile communications drive social and economic benefi t? What
is Vodafone doing to ensure low-income groups can access your services?
Vodafone’s business focus is to provide communications services to individuals
and businesses around the world. One of the key features of our success over
the past 20 years has been the social and economic benefi t that these services
can deliver.
In the developed world, mobile is an additional form of communication for
people who already have access to several different communication services.
The reason why it has become so successful is because of the additional benefi t
of effi ciency that mobility brings. Mobile communications enables individuals
to make the most of their time socially and economically by providing access
to people and information when required.
In the developing world, instead of providing an alternative choice of
communications, we often fi nd that mobile provides people with a communication
service for the very fi rst time. Due to a lack of fi xed-line infrastructure, individuals
have been unable to access convenient and low-cost communications but mobile
is beginning to change this. People are now using mobile communications to
engage in society and the economic system. This can help them to earn a living,
improve education and maintain social cohesion by enabling ongoing
communication with family and friends. The effi ciency of mobility is bringing
them similar benefi ts to their counterparts in the developed world, but the impact
is obviously greater as they are experiencing these benefi ts for the fi rst time.
A good example of the effect of mobile communications is the impact it has
had on the lives of Indian fi sherman off the coast of northern Kerala. By having
access to communications, fi shermen are able to call ahead and choose which
port to land their catch. This has created a more effi cient market for their fi sh by
matching supply with demand and thereby eliminating wastage. The fi shermen’s
profi ts rose as they were able to sell all their stock and the price of fi sh fell for
consumers as more effi cient distribution created economies of scale. Access to
information enables markets to work more effectively.
At Vodafone, we believe that through our services we can have a positive impact
on people’s lives around the world. We therefore have several initiatives in place to
ensure that our services are increasingly accessible to all people regardless of
their social or economic circumstances.
One of the main barriers to accessing mobile communications has been the
cost of the handset. We therefore decided to take advantage of our global scale
and develop a low-cost handset with Chinese manufacturer ZTE. We have
produced several Vodafone-only branded handsets that are likely to retail from
US$25 and make access to mobile communications more affordable.
We are also going further than just handsets. We are now looking at how
to make all elements of our service even more affordable and accessible to all.
We have introduced lower prepay top-up vouchers to enable people to top up
more regularly at lower cost. We have provided low-cost communications to
hundreds of remote villages in South Africa through our South African affi liate,
Vodacom. In Kenya, Safaricom (a Vodafone joint venture) has launched M-PESA, a
mobile payment service that enables customers to transfer money within Kenya
by sending instructions via SMS text message.
The common theme throughout the development of these services is
accessibility. We are driving innovation in our products and services to ensure all
individuals can realise the full benefi ts of mobility, whether they are rich or poor,
living in a developed or developing country.
We hear about the benefi ts of communications but less about the risks.
How do you protect children and ensure individual privacy from new
services such as social networking and mobile advertising?
We believe that the positive social benefi ts of our services signifi cantly outweigh
the negative. Our shareholders, stakeholders, customers and employees expect
that we will have the necessary safeguards in place to protect users of our
services and as a responsible company – that’s exactly what we do.
Social networking allows people to access and share information with others
who have similar interests. In our view, this brings social benefi t by creating
communities with common interests and that’s why we recently signed
partnership agreements with sites such as eBay, Google, MySpace and YouTube.
These websites are hugely popular with consumers and their success
demonstrates the value that individuals place on accessing and sharing
information.
Mobile advertising services will also bring benefi ts to our customers.
Customers who ‘opt-in’ and voluntarily choose to accept advertisements will be
offered certain benefi ts for doing so such as free or discounted services. Those
customers who do not wish to accept adverts have no obligation to do so. We also
guarantee that our customers’ privacy will always be protected and their personal
information will not be released to third parties without prior consent.
I believe our role as a business is to continue bringing customers the services
they want and we are doing this through our new social networking and advertising
partnerships. We recognise that when we develop new services, we also need to
think about how they impact our customers and that is why we proactively put
measures in place to protect them from any potential negative consequences.
We aim to fi nd the right balance between protection, which means more control,
and freedom of expression, which mean less. I believe the right way to strike this
balance is to enable our customers to make informed choices.
Maintaining customer trust is critical to us and we listen to customer views
on an ongoing basis. In addition to the access controls for parents and internet
fi ltering that we already provide, we will continue to review and adapt our content
standard policies to ensure customers can protect themselves and their children
from inappropriate content and contact while benefi ting from access to
communications opportunities.
Climate change is becoming a major global issue. What is your strategy
for dealing with Vodafone’s climate impact?
Our carbon intensity is low compared with other sectors. Vodafone is
responsible for approximately one and a quarter million tonnes of carbon
dioxide per year, the equivalent of around 160,000 UK households. More than
80% of these emissions are due to our network. We are currently concentrating
on reducing the need for air conditioning in our base station sites. We also
challenged our suppliers to improve the energy effi ciency of our network
equipment and they achieved a 25% improvement over the year.
By virtue of providing a mobile communications service, I believe that
we help to reduce climate impact. Our networks can be used to manage traffi c
fl ows, provide public transport information or plan logistics more effectively.
They can even be used to switch off the lights and heating as you walk out of
your house or remotely read electricity meters.
In conclusion, I believe that we will be more successful in achieving our
corporate objectives by being a responsible business. We are a leading global
company and we therefore need to be a leading global contributor to the
objectives of individuals, businesses, society and the world around us.
We always value your feedback on how we can do better and how we can further
improve. I believe that by acting on this feedback and by continuing to provide
our services to people around the world, Vodafone will continue to play a valuable
and constructive role in addressing the defi ning challenges of our time.
Arun Sarin
Chief Executive
2 Vodafone Group Plc Corporate Responsibility Report 2007
About Vodafone
Vodafone is a world leader in providing voice and data communications
services, including voice calls, SMS text messaging, MMS picture and video
messaging, internet access and other data services. We now also offer fi xed
broadband internet services in several markets. Our 206 million proportionate*
mobile customers include private consumers and corporate customers around
the world.
The Group has a signifi cant presence in Europe, the Middle East, Africa,
Asia, Pacifi c and the USA through its local operating companies, joint ventures,
associated undertakings and investments. Emerging and developing markets
provide the greatest opportunity for us to grow our business and improve
access to communications. We are expanding our presence in these markets.
Refl ecting this, we have reorganised our business into two main units: EMAPA
(Eastern Europe, Middle East, Africa, Asia, Pacifi c and Affi liates) and Europe
(see table on page 3).
*Adjusted to refl ect the Group’s percentage ownership.
What we do What are the issues?
Key fi nancials and statistics
Network
Total base station sites: 83,561
2G base station sites: 49,163
3G base station sites: 8,409
Co-located (2G and 3G) base station
sites: 32,420
Total exchanges (MSCs): 585
Capital expenditure on network
infrastructure: £2.4 billion
•
•
•
•
•
•
Community consultation, environmental
issues and legal compliance associated with
network rollout
Mobile phones, masts and health
Energy use
Waste
Health and safety
•
•
•
•
•
Services
Total voice usage: 245 billion minutes
Vodafone Mobile Connect card:
1.4 million customers
Vodafone Passport: 11+ million customers
Vodafone live! active devices: 32+ million
Vodafone At Home customers: 3 million
Vodafone Offi ce customers: 2 million
•
•
•
•
•
•
Accessibility of products
Content standards (including age-
restricted content, chat services, etc.)
Spam
Privacy, security and freedom of expression
Driving safely
Mobile theft
Socio-economic impact of mobile
•
•
•
•
•
•
•
Brand presence and retail
Stores owned: 1,094
Stores franchised: 4,548
Customer store visits per day: 550,000
Total retail staff approx.: 35,000
Calls taken by contact centres:
1.5 million per day
•
•
•
•
•
Responsible marketing and advertising
Handset reuse and recycling
Clear and easy to understand pricing
Providing information about issues
to customers
Supply chain
•
•
•
•
•
Year ended 31 March
2007 2006
£bn £bn
Revenue 31.1 29.4
Adjusted operating profi t
9.5 9.4
Operating (loss)
(1.6) (14.1)
Free cash fl ow
6.1 6.4
Market capitalisation
(at 31 March) 71.6 72.4
Closing proportionate
customers
206.4 170.6
0
5 1015202530
Revenue (£bn)
2007
2006
24.7
24.6
–
0.6%
0
2
46810
Adjusted operating
profit (£bn)
2007
2006 6.0
5.6
–
5.1%
Contribution to Group revenue 79%
Contribution to Group
adjusted operating profi t
(4)
59%
Revenue (£bn)
0
2
46810
2007
2006 4.6
6.4
+
41.4%
0
2
46810
2007
2006 3.2
3.8
+
16.0%
Adjusted operating
profit (£bn)
Contribution to Group revenue 21%
Contribution to Group
adjusted operating profi t
(4)
39%
Vodafone Group Plc Corporate Responsibility Report 2007 3
Europe
EMAPA
Eastern Europe, Middle East, Africa, Asia, Pacifi c and Affi liates
Key events in the 2007 fi nancial year
Partner networks agreements in: Argentina, Austria, Bahrain, Belgium, Bermuda, Brazil,
Bulgaria, the Caribbean*, Chile, Colombia, Croatia, Cyprus, Denmark, Ecuador, El Salvador,
Estonia, Finland, Guatemala, Honduras, Hong Kong, Iceland, Indonesia, Kuwait, Latvia, Lithuania,
Luxembourg, Jersey, Malaysia, Mexico, Nicaragua, Paraguay, Peru, Singapore, Slovenia, Sri Lanka,
Sweden, Switzerland and Uruguay. *Caribbean islands as listed in the 2007 Annual Report.
The business
Exceeded 200 million proportionate customers across the Group
Acquisitions: Agreed to acquire control of India’s Hutchison Essar Limited,
acquired Telsim in Turkey
Sold 25% non-controlling stakes in Swisscom and Proximus
Signed strategic alliances with social networking sites YouTube and MySpace
Announced exclusive deals on mobile advertising with Yahoo! and Google
Focused on major cost reduction initiatives, including outsourcing IT
management facilities and consolidating data centres
Announced a sourcing centre in China with the aim to increase annual
sourcing volume up to €1 billion by 2010
•
•
•
•
•
•
•
The CR agenda
Announced venture with Citigroup to provide mobile-based international
remittance transfer services, based on the success of the M-PESA mobile
payment service in Kenya
Reduced by 40% the average cost of calls for our customers using
Vodafone networks in Europe outside their home country
Awarded fi rst place in the 2006 AccountAbility rating
Vodafone’s Group CR Report for the 2006 fi nancial year was named
Best Report of 2006 by the ACCA awards
Announced plans to introduce low-cost handsets in emerging markets
Received a €76 million fi ne relating to an unlawful interception incident
in Vodafone Greece
•
•
•
•
•
•
Key market data
Key market data
No. customers Registered
(‘000s) pre-paid (%)
Australia 3,367 73.6
Czech Republic 2,475 47.5
Egypt 5,299 93.8
Hungary 2,163 61.1
New Zealand 2,244 75.8
Romania 7,954 66.2
Turkey 13,900 90.1
Affi liates and investments (% ownership): South Africa (50%),
US (44.4%), Kenya (35.0%), Poland (19.6%), France ( 44.0%), Fiji (49.0%), China (3.3%)
No. customers Registered
(‘000s) pre-paid (%)
Germany 30,818 54.4
Italy 21,034 92.0
Spain 14,983 45.2
UK 17,411 60.7
Albania 955 96.6
Greece 5,051 69.2
Ireland 2,177 73.3
Malta 186 89.6
Netherlands 3,880 45.3
Portugal 4,751 79.0
Climate
change
Mobile phones,
masts and health
Adult
content
Emerging
markets
Supply
chain
Employees
Access to
communication
Customer
satisfaction
Privacy
Handset
recycling
One Vodafone/
centralisation
Bribery and
corruption
Issues
management
Health and
safety
Business
principles
CR &
strategy
Issues raised by investors
No. of times issues raised
Responsible
network
deployment
9
8
7
7
7
4
4
3
3
3
3
2
2
2
2
1
2
01234567
89
4 Vodafone Group Plc Corporate Responsibility Report 2007
Stakeholder engagement
Over the last four years we have invested signifi cant
resources in stakeholder engagement through various
approaches. We have held one-to-one meetings, focus groups,
participated in partnerships and conducted opinion surveys.
We have engaged globally at Group and through our local
operating companies.
As a result we have a good understanding of the issues we
face and are confi dent that this report addresses the main
concerns and areas of interest of our stakeholders. We are
refocusing our engagement to take a deeper look at the
most important emerging issues.
Further information:
www.vodafone.com/responsibility/dialogues
www.vodafone.com/responsibility/engagement
Issue specifi c dialogue
We have refi ned our approach to engagement to focus on specifi c emerging
issues. This allows a more in-depth conversation with the people that have a
real interest in and particular expertise on a specifi c issue. Focused dialogue
helps us identify solutions to new issues and provides our stakeholders with
the opportunity to infl uence our thinking.
We call this new approach ‘CR Dialogues’. The key features are:
We choose emerging issues on which our views are not fi xed and there is
scope for others to infl uence our decisions. These are usually issues of wider
social, environmental and corporate relevance
We aim to contribute to the debate and level of knowledge by commissioning
and publishing research work in connection with the CR Dialogues.
We narrow the scope of the subjects discussed so that we can bring together
specialists with extensive knowledge to advance the wider debate.
Vodafone and its stakeholders benefi t more from this kind of engagement.
In certain areas, by advancing the debate we may also contribute to raising
standards in the industry.
Privacy, security and freedom of expression
Previous stakeholder engagement identifi ed privacy as an emerging issue.
We therefore decided to explore this topic in more detail, as follows:
We commissioned a CR Dialogue paper that identifi ed the main privacy
issues relevant to Vodafone
A panel of fi ve external privacy experts took part in our annual corporate
responsibility conference in July 2006
We held a focus group with academics, governments, industry and NGOs to
explore privacy issues in February 2007
Along with Google, Microsoft and Yahoo!, we set up a multi-stakeholder
dialogue to draft principles on freedom of expression for the industry.
As part of the focus group, we also held constructive discussions about how
the introduction of advertising on mobile phones will impact customer privacy.
In total we engaged with around 50 opinion formers on this issue in the 2007
fi nancial year. Details of the privacy engagement programme are on page 18.
Economic empowerment through mobile
We have continued our programme of engagement with stakeholders who
can help us to offer products tailored to the needs of emerging markets and
to understand the economic and social impact of our activity.
To inform and enlighten debate on this issue we published a CR Dialogue
paper, Economic Empowerment Through Mobile, summarising three pieces
of research sponsored by Vodafone. Stakeholder meetings were held in the USA
and London (with Forum for the Future and the World Resources Institute) to
share the fi ndings of the research and obtain feedback. We are planning an
additional event in Brussels. See the research papers at www.vodafone.com/
responsibility/dialogues.
Supply chain
A consistent theme in our stakeholder engagement over the last few years has
been the signifi cance of CR issues in our supply chain. The conditions prevalent
in the electronics supply chain were further highlighted this year by reports
from a number of NGOs, including SACOM (Students and Scholars against
Corporate Misbehavior) and SOMO (Centre for Research of Multi-National
Companies), a Dutch research organisation advising NGOs and trade unions.
We are continuing to work with other information communications
technology (ICT) companies to establish a common approach to supplier
assessment through our membership of the Global e-Sustainability Initiative
(GeSI), collaborating with the Electronic Industry Code of Conduct
Implementation Group (EICC). Through this engagement we are making
progress in mobilising the ICT sector to engage consistently and effectively
with its supply chain.
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Engagement with investors
We held 12 meetings on CR issues as part of our Investor Roadshow and
participated in a multi-investor forum organised by Citigroup. In addition we
held one-to-one meetings with individual investors on age-restricted content
and privacy. These meetings allow us to understand the concerns of investors
about CR risks and help us to identify potential future issues. We also learn
what information investors want and have the opportunity to explain our
strategy for managing CR.
The chart shows the issues raised most frequently in these discussions
during the 2007 fi nancial year:
Vodafone Group Plc Corporate Responsibility Report 2007 5
Energy and climate change
Our engagement on climate change relates both to the impact of our own
operations and the wider business and political response to this issue. We are a
member of the UK Corporate Leaders Group on Climate Change, facilitated by
HRH The Prince of Wales’s Business & the Environment Programme through the
Secretariat of University of Cambridge Programme for Industry. During 2006,
this group pressed for the UK to show leadership in global action on climate
change and communicated the business case for action in key countries such
as China, India and the USA. In addition, Vodafone is a member of the EU
Corporate Leaders Group on Climate Change, established in November 2006.
We held a focus group for opinion formers to discuss our strategy for
addressing our own carbon footprint in March 2007. A key element of our
strategy is engaging with manufacturers to improve the energy effi ciency of
network equipment. See page 23 for details of our climate change engagement.
Network rollout
Our engagement on this issue is mainly at local level. Landlords were surveyed in
fi ve local operating companies in the 2007 fi nancial year. We plan to develop a
set of common questions for all operating companies to use in landlord surveys
to help us track landlord satisfaction levels across the Group. See page 14.
Mobile phones, masts and health
We commissioned Ipsos-MORI to interview 70 experts and opinion formers
around the world who have previously had contact with Vodafone and ask them
how seriously Vodafone is taking its responsibilities relating to mobile phones,
masts and health. The survey provided insights into how we are regarded and
what we should do to improve our performance. See page 12.
Content standards
Vodafone’s internal and external content standards programme was used as
the basis for dialogue with the European Commission during 2006, through its
Safer Internet Programme. The outcome was the European framework for safer
mobile use by younger teenagers and children, signed by Vodafone and other
leading EU mobile operators, to be signed up at national level.
In the 2007 fi nancial year, Vodafone announced partnerships with YouTube,
MySpace and other popular internet sites to make them available via mobile.
Following discussions, our contracts with these partners include clauses to
protect users from inappropriate content.
Stakeholder specifi c dialogue
In addition to our issue-focused dialogue, we continue to engage with specifi c
groups of stakeholders. We regularly engage customers in all our markets to
understand their views and priorities. We conduct regular employee surveys
on a range of topics, including CR issues (see page 26).
We engage with governments in all of our markets on issues relevant to our
business (see page 29). We meet with global NGOs when their campaign or
focus is relevant to our business. We respond constructively to requests for
information from our investors and meet with them to discuss our CR strategy
(see chart on page 4).
Expert panel
We have established a panel of key experts on issues of environmental, social
and economic importance to Vodafone. We have selected individual opinion
leaders with a mutual interest in debating CR issues and fi nding solutions that
Vodafone can drive forward.
The forum will meet twice a year and will operate as a network of experts
whom we can consult as issues arise. Vodafone will consult the relevant forum
members when developing or revising policies and programmes. Vodafone
senior management will also be able to discuss issues affecting our business
with them.
We envisage that topics of mutual interest will be explored in detail through
research projects under the guidance of the forum. In this way we intend not
only to inform Vodafone but also to add to the wider knowledge and experience
available to others tackling CR issues.
Industry forums we engaged
with in the 2007 fi nancial year
Business for Social Responsibility Multi-stakeholder dialogue on privacy
industry engagement programme and freedom of expression
Corporate Leaders Group Climate change
CSR Europe Various issues
Global e-Sustainability Initiative Supply chain and environment
GSM Association Spam, roaming transparency,
mobile advertising
High Level Group on Safer Mobile Use Content standards
Mobile Marketing Association Mobile advertising
Mobile Phone Partnership Initiative Handsets recycling and e-waste
World Business Council for Sustainable Development Various issues
Survey shows that CR is key to maintaining our
reputation with stakeholders.
We commissioned qualitative and quantitative research comprising
consumer focus groups and in-depth stakeholder interviews in Greece, Italy,
the Netherlands and the UK. The study surveyed more than 2,500 people
representing the general public, business, media, government, investors,
NGOs and academia.
The aim of the research was to identify the factors that infl uence Vodafone’s
reputation either positively or negatively for each stakeholder group. The
research also looked at how stakeholders form opinions about the Company.
CR-related attributes such as integrity and environmental responsibility
were closely correlated to admiration and respect for the Company among
stakeholders, for example NGOs and government, shown in the charts below.
The “integrity” reputation driver comprises attributes such as “being honest
and transparent”, “being trustworthy” and “behaving in a responsible way.”
Coeffi cients determining the correlation between each attribute and admiration
and respect for the company
0.0 0.2 0.4 0.6 0.8 1.0
Quality Service
/product
Open
communication
Market
leader
Long term
investment
Integrity
Global
presence
Fair
employer
Environmental
responsiblity
Economic
contribution
Clear
strategy
Charity/community
support
Attractive
employer
Financial
strength
I Government I NGOs
0.0 0.2 0.4 0.6 0.8 1.0
Quality Service
/product
Open
communication
Market
leader
Long term
investment
Integrity
Global
presence
Fair
employer
Environmental
responsiblity
Economic
contribution
Clear
strategy
Charity/community
support
Attractive
employer
Financial
strength
I Government I NGOs
Each of our CR Dialogues explores a key emerging CR issue in depth. The Dialogues
include several key elements:
Focus groups for experts and key opinion formers
Independent research commissioned by Vodafone
Dialogue papers outlining the fi ndings of this research and engagement,
designed to stimulate further debate on the issue.
Our latest stakeholder events focused on privacy, climate change and emerging
markets. We have published three Dialogue papers to date on:
assurance of CR reporting
stakeholder engagement
economic empowerment through mobile
These papers are available on our website at
www.vodafone.com/responsibility/dialogues.
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6 Vodafone Group Plc Corporate Responsibility Report 2007
How we manage corporate responsibility
Vodafone employs approximately 60,000 people around the
world. Our challenge is to ensure every one of our people
understands and subscribes to our corporate values so that
we achieve consistent implementation of our CR strategy
across the Company.
Our management of CR mirrors the way we manage our business.
Each of our operating companies has a CR management
structure in place (see table below). These local management
teams are connected to the Group CR function through regular
formal and informal communications and reporting. We have
additional teams at Group level to manage key issues.
Further information:
www.vodafone.com/responsibility/ourapproach
CR strategy
Business principles
Embedding CR
Policies
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Strategy
Vodafone has six strategic goals (see red box). One of these is to ‘be a responsible
business’. Our more detailed CR strategy states our objective to be one of the
world’s most trusted companies in the markets where we operate by 2010.
Our CR strategy sets clear priorities to:
maintain high ethical standards
understand and respond to stakeholders’ priorities
ensure our operating standards are consistent across the Group
deliver on our promises in three key areas: responsibility to our customers;
reuse and recycling of mobile phones; and energy and climate change
capture the potential of mobile to bring socio-economic value through
access to communications.
Accountability
The Group Executive Committee (ExCo) is responsible for CR policy and
performance and discusses CR issues. The Group CR Director, Charlotte Grezo,
reports to the Group Corporate Affairs Director, Simon Lewis, who is the
ExCo member with responsibility for CR. CR performance is reported to the
Chief Executive quarterly and a report is made annually to the Vodafone
Group Plc Board.
Internal communications and awareness
Maintaining awareness of CR among our employees requires constant
communications activity. We intend to make sure that everyone, everywhere,
receives CR messages and has access to CR information. Our key global
CR communications in the 2007 fi nancial year included:
special features in each issue of Vodafone life! – our global employee
magazine – on mobile phones, masts and health; handset recycling;
and disaster relief
a three-page internal version of the 2006 CR Report
a video on the Vodafone TV news channel highlighting the socio-economic
impact of mobile technology in emerging markets
a global handset recycling campaign
recognition from Dow Jones, AccountAbility rating and ACCA award were
used globally on Vodafone’s intranet and in Vodafone life! as an opportunity
to thank employees for their commitment to CR
we included the question, ‘Rate Vodafone on being ethical in its business
dealings’ in our two ‘Pulse’ employee surveys in the 2007 fi nancial year.
Of those surveyed, 71% rated Vodafone positively. See page 26 for details.
Operational CR management
The chief executives of local operating companies have responsibility for
CR and all have appointed CR managers. The Group CR Director and team
regularly meet the executive teams of local operating companies and, in the
2007 fi nancial year, visited the following countries: Albania, Czech Republic,
Germany, Malta, the Netherlands, Portugal, Romania and Turkey.
Twice a year we hold global CR conferences and workshops, bringing
together the CR teams of all local operating companies and Group. These
meetings are a valuable way of sharing experience and affi liates and building
a consistent programme across the business. A number of guest speakers
addressed the meetings this year including representatives from Google,
Privacy International, the United Nations Development Programme, the UK
Home Offi ce and the British Ambassador to Egypt.
The following topics were discussed at this year’s meetings:
The future of CR at Vodafone – challenges from external stakeholders
Privacy vs security
Handset recycling
Supply chain
Coordination of local CR reports
Future commitments and target-setting
Achieving change.
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•
CR implementation in Vodafone’s local operating companies
Board CR issues CR stakeholder
member reported to perception Number
responsible the Board survey(s) CR Report of people
for CR regularly undertaken published in CR team
Albania ✓ ✓ ✓ 1
Australia ✓ ✓ 2
Czech Republic ✓ ✓ 2
Egypt ✓ ✓ ✓ 3
Germany ✓ ✓ ✓ ✓ 2
Greece ✓ ✓ ✓ ✓ 3
Hungary ✓ ✓ 1
Ireland ✓ ✓ ✓ 1
Italy ✓ ✓ ✓ 6
Malta ✓ ✓ ✓ 2
Netherlands ✓ ✓ ✓ ✓ 1
New Zealand ✓ ✓ ✓ ✓ 3
Portugal ✓ ✓ ✓ ✓ 3
Romania ✓ ✓ 2
Spain ✓ ✓ ✓ ✓ 4
UK ✓ ✓ ✓ ✓ 3
Vodafone Group Plc Corporate Responsibility Report 2007 7
Measuring and reporting performance
We believe that openness and transparency are critical to our reputation at
both the global and local level. Eleven operating companies have published
a local CR report, refl ecting the issues of most signifi cance in each country
(see back cover).
Local operating companies report CR key performance indicators (KPIs)
quarterly to Group, along with their fi nancial reports. Senior executives
review the data to assess performance. The CR KPIs are both qualitative
and quantitative, and are validated by internal verifi cation procedures.
Issues management
In addition to our operational CR management, we have a combination of
teams, committees and boards to focus on issues of particular importance.
This structure is mirrored at local level. Their function is to formulate policy,
plan our strategy and coordinate implementation. These groups are formed and
adapted according to changes in the CR agenda and the need for Vodafone to
focus on a particular issue. The groups create a fl exible networked structure for
issue management with broad involvement of people from across the Group.
The tables below identify the issue teams and initiatives.
Our strategic goals
Delight our customers
Build the best Vodafone team
Leverage global scale and scope
Expand market boundaries
Be a responsible business
Provide superior shareholder returns
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CR management in Romania
Vodafone acquired Connex in Romania during the 2006 fi nancial year.
The Romanian CR team consists of three people, one of whom was
recently recruited to handle issues management and reputation. The
Vodafone Romania Foundation has one full time employee. CR
champions are being appointed in each department. Vodafone
Romania’s new mission statement is ‘to be a role model in how to do
business in Romania.’
A CR plan was presented to the Vodafone Romania executive committee
in March 2007. This established priorities refl ecting the Group CR
strategy and particular local needs in Romania.
The key areas of focus for Vodafone Romania are:
Helping people through our products and services
Environmental protection
Promoting a sense of community in Romanian society
Engaging our employees.
Current initiatives include launching a handset recycling scheme in
the 74 Vodafone-owned stores in Romania, engaging with stakeholders
on mobile phones, masts and health, explaining Vodafone’s business
principles to all employees and launching a whistle-blowing campaign
for employees and suppliers. The
Vodafone Romania Foundation
supports charity and community
programmes for the sick, the needy
and the disadvantaged (especially
children and the elderly) across
the country.
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•
We launched a Group-wide
internal communications
campaign in March 2007
to put climate change in
the spot light and promote
energy effi ciency among our
employees. Features in our
internal magazine Vodafone
life! will ask employees how
energy effi cient they are
and encourage them to get
involved in energy-saving
initiatives at their local
operating company.
Group committees and teams focusing on key CR issues
Topic Function Led by:
Content Standards
Steering Group
Protecting customers,
especially younger users, from
inappropriate content, contact
and commercialism
David Wheldon (chair), Director of
Brand and Customer Experience
Tina Southall, Director of Access
Controls and Content Standards
Privacy Steering
Group
Protecting the privacy of our
customers including data protection,
confi dentiality, unsolicited
communications and intrusive
surveillance
John Moore (chair), Director of
Customer Relationship Management
Stephen Deadman, Group
Privacy Offi cer
Health Safety and
Wellbeing
Ensure that in all our activities we
properly safeguard those who work
for us and those who may be affected
by our operations
John Daly, Group Health, Safety &
Wellbeing Manager
Social Investment
Committee
Oversee the social investment fund
to develop products and services
that benefi t society
Tina Southall, Director of Access
Controls and Content Standards
Charlotte Grezo, Director of Corporate
Responsibility
Electromagnetic
Field (EMF) Board
Engage stakeholders in an open
and transparent dialogue to address
health concerns and work to resolve
scientifi c uncertainty
Ensure the health and safety of the
general public, our employees and
business partners
Tim Harrabin (chair), Strategy and
Business Improvement Director,
EMAPA
Steve Workman, Group EMF Manager
Business ethics
working group
Developing and communicating
a framework that promotes ethical
behaviour at all levels
Terry Kramer, Group HR Director
Global cross-team initiatives focusing on key CR issues
Topic Function Led by:
Access to
Communications
Understand and make the most of
the socio-economic impacts that
mobile communications have
through access to communications
Paul Donovan, Emerging markets
Chief Executive (sponsor)
Ian Gray, CEO Vodafone Egypt (leader)
Customer Promise Provide a positive customer
experience by protecting our
customers
Paco Roman, CEO Spain (sponsor)
David Wheldon, Director of Brand
and Customer Experience (leader)
Energy Reduce energy consumption and
our impact on climate change
Steve Pusey, CTO (co-sponsor)
Simon Lewis, Director of Corporate
Affairs (co-sponsor)
Helmut Hoffmann, Director of
Networks (leader)
Handset Reuse
and Recycling
Promote collection of old phones
for reuse and recycling
Pietro Guindani, CEO Italy (sponsor)
Caterina Torcia, CR Manager, VF Italy
(leader)
Responsible
Network
Deployment
Deploy the network of masts in a
responsible way, with sensitivity to
the views of stakeholders including
landlords, neighbours, local councils
Helmut Hoffmann, Director of
Networks (sponsor and leader)
CR in our
Supply Chain
Work with suppliers to address CR
issues in the supply chain
Detlef Schultz, Global Director Supply
Chain Management (sponsor)
Peter Stangl, Head of Supplier
Performance Management (leader)
External awards and recognition for our 2006 CR Report
Best CR Report 2006 Ranked number 1 in Global Rating Ranked 7th
CR team at Vodafone Romania
The Vodafone Group
Report ranked 7th
in Tomorrow’s Value,
a benchmark by
SustainAbility, UNEP
and Standard & Poors.
8 Vodafone Group Plc Corporate Responsibility Report 2007
Extending access to communications
Material developments:
Economic empowerment research published to assess the
potential of mobile products and services to make fi nancial
transactions more accessible
Low-cost handset plans announced to boost access to
telecommunications in emerging markets
Mobile payment: M-PESA service launched in Kenya by
Safaricom and trial extended to Afghanistan
International money transfer service in collaboration with
Citigroup announced to enable people working abroad to send
money home via their mobile
Accessibility: Research conducted to assess the needs of
visually impaired customers. Partnerships to reduce the level
of preventable exclusion continued
India: Agreed to acquire a stake in a leading mobile operator
in India
Further information:
www.vodafone.com/responsibility/access
Socio-economic impact research impact
Africa: the impact of mobile phones – full report
Economic empowerment through mobile – full report
Impact of mobile in healthcare – full report
M-PESA
Cash value-added
www.vodafone.co.uk/disabilityservices
www.vodafone.es/accesible
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•
•
•
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•
Access to communications offers the single greatest opportunity for Vodafone
to make a strong contribution to society. This is our most signifi cant CR issue
and forms a core part of our CR strategy. A considerable and growing pool of
research shows that telecommunications – and mobile communications in
particular – have the potential to change people’s lives for the better by
promoting economic development. At the same time, this offers us a great
opportunity to expand our business.
There are two key elements to our strategy on this issue:
Bridging the digital divide by improving access for disadvantaged groups,
particularly in emerging markets
Reducing preventable exclusion through accessible features and services for
disabled and elderly people, and other customers who fi nd it diffi cult to use
mobile phones
Access to communications in emerging markets
Our strategic business goal to achieve strong growth in emerging markets is
closely linked to our CR objective to improve access to communications.
Emerging markets offer enormous business opportunities for Vodafone and are
increasingly signifi cant to our business. We already have established local
operating companies in Albania, Egypt and Romania, a presence in Kenya,
South Africa and other African countries through our affi liates, and a new local
operating company in Turkey. We completed the acquisition of a controlling
stake in a leading mobile operator in India in May 2007.
The number of mobile connections is increasing at a rate of 28% in the Asia
Pacifi c region according to data released by Wireless Intelligence in March 2007,
and at a rate of 43% in Africa – almost double the average growth rate of 23%
worldwide.
India is the fastest growing mobile market in the world but around 87% of
the population of over 1.1 billion are not yet reached by mobile networks. This
offers enormous potential for our business to signifi cantly improve access to
communications as well as strong future growth opportunities for Vodafone.
We have announced plans to invest signifi cant resources to improve the
network and increase coverage, particularly in rural areas of India.
The number of mobile customers in Africa – where mobiles account for at
least three quarters of all telephones – reached more than 200 million in the
2007 fi nancial year, an increase of more than 60 million customers from last
year. To explore business opportunities effectively in emerging markets, we
need to understand the needs of customers in those markets. Our research on
the socio-economic impact of mobile in Africa found that mobile technology
stimulates economic growth and social development. This impact is most
signifi cant in developing economies where there is little or no existing
infrastructure.
We are encouraging economic growth by tailoring our services to developing
market conditions. Low-cost handsets – new and refurbished – make mobile
phones more affordable and pre-pay (top-up) helps to overcome credit
barriers. The money transfer services we are piloting, together with our affi liate
Safaricom, will facilitate economic development especially in rural areas with
scarce banking services. Many people cannot afford a mobile phone but have
access to mobile services by sharing with family or friends, or through
community phone shops where you can pay per call.
Accessibility
The other key element of our strategy on access to communications is to reduce
preventable exclusion. Accessibility is usually associated with disability, but
diffi culty using devices such as mobile phones is more widespread. Our research
suggests that at least 9% of the EU adult population is excluded from using
mobile phones. Vodafone views this as both a social and commercial challenge.
We offer specialised products and services to increase access to
communications for people who are blind, visually impaired, deaf or hard of
hearing. For example, text-to-speech software enables blind people to read text
messages and push-to-talk technology enables deaf people to communicate in
real time on their mobile phones.
Many people who do not have a serious disability still have diffi culty using
the full functionality of a mobile phone, handling a handset, pressing keys to
operate and reading the screen. This diffi culty is growing as phones become
smaller and more complex, and leads to frustration.
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Vodafone Group Plc Corporate Responsibility Report 2007 9
Inclusive handset design and simpler operating menus make mobile phones
easier to use.
We also offer a range of other products and services that use mobile technology
to bring social benefi ts in some markets. For example, our social alarms enable
greater independence for the elderly or infi rm by connecting them to professional,
medical or security help at the touch of a button. Our personal medical phones
have built-in equipment to monitor medical conditions such as diabetes. Vodafone
is continuing to explore further potential social benefi ts of mobile.
We said
We would improve access to communications as a core part of our
CR strategy
We would continue to research the socio-economic impact of mobile
telecommunications
We would reduce the level of preventable exclusion by at least a third by 2010
We would introduce three signifi cant products with features that reduce
exclusion by March 2008
We have
Published research on economic empowerment through mobile
In November 2006, we published a paper in the Vodafone CR Dialogues series
on the potential of mobile to facilitate fi nancial transactions. The paper profi les
three independent studies. The fi rst is a case study on mobile banking in South
Africa by the Consultative Group to Assist the Poor. Forum for the Future
explores the socio-economic benefi ts of airtime transfer service in Egypt in
the second study. The third report from the World Resource Institute outlines
the variety of ways mobile phones are being used to offer fi nancial services.
(See box, left, for a summary of the fi ndings).
Around 100 stakeholders representing academia, industry, investors
and NGOs attended an event in January 2007 to launch the paper. All three
independent studies were presented by the authors, provoking lively discussion
among the participants. A key focus of the debate was the role of the private
sector in providing services to those at the ‘base of the pyramid’ – the
approximately four billion people globally who earn less than US$1,500
a year and are underserved by formal business.
Launched a mobile payment service in Kenya
The M-PESA mobile payment service was launched in February 2007 by our
affi liate in Kenya, Safaricom, following a successful trial of around 500 people
last year. M-PESA enables customers to move money within Kenya by sending
instructions via SMS text message to a central server. Customers can deposit
and withdraw cash at local M-PESA agents, including retail outlets such as
airtime dealers, petrol stations, and supermarkets. They can transfer money
to other mobile users via SMS and also buy prepaid airtime credit.
The service is aimed at mobile customers who do not have a bank account,
often because they do not have suffi cient income to justify the high cost of
banking in Kenya or because they live in areas where access to fi nancial services
is limited. Of the 80% of Kenyan adults without bank accounts, many are self-
employed business people who need the ability to transfer money. People with
bank accounts can also use the service to send money to their families living
elsewhere in the country who do not have bank accounts, avoiding more
expensive and insecure local money transfer services. Over 50,000 customers
registered for the service in Kenya in its fi rst two months. It is now being piloted
in Afghanistan.
Partnered with Citigroup to create an international money transfer service
Money sent home by migrants working abroad (foreign workers) is an
increasingly signifi cant source of income in many developing countries.
Indeed it represents as much as a third of national GDP in some cases.
Recipients often depend on this income to survive. In 2006, the World Bank
estimates migrants sent home over £100 billion to developing countries, more
than double the amount in 2001. This is greater than all foreign aid put together
or the fl ow of foreign direct investment into developing countries (see box
on international remittances, page 11).
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Economic empowerment through
mobile: research summary
Mobile phones now offer access to a range of fi nancial services
including electronic banking, airtime transfer, and mobile money
transfers. Our CR dialogue on economic empowerment brings together
three research studies on the potential benefi ts of these services.
Research by the Consultative Group to Assist the Poor on the
perception of mobile phone banking in South Africa found that
low-income customers value mobile banking because it is more
affordable than traditional banking, easy to use and secure. However,
awareness of mobile banking is low and many low-income South
Africans believe they do not need banking services, cannot afford
them or are ineligible to have them.
Forum for the Future’s research on our airtime transfer service in Egypt
suggests that this service makes mobile services more accessible to
low-income customers by enabling them to purchase airtime in small
increments from dealers or informal resellers. This also provides
commercial opportunities for airtime resellers, encouraging micro-
entrepreneurs. In addition, airtime transfers bring considerable social
benefi ts enabling families to keep in touch more easily.
A report by the World Resources Institute outlines the variety of ways
mobile phones are being used to offer fi nancial services, creating new
ways of doing business. The report concludes that improved access
to fi nancial services is essential to create economic development for
low-income consumers in emerging markets.
Our CR Dialogue profi ling these
research studies is available at:
www.vodafone.com/responsibility/dialogues
The mobile payment service M-PESA enables customers to move money within Kenya
by sending instructions via SMS text message. Launched in February 2007, over 50,000
customers have registered for the service in its fi rst two months.
0 20 40 60 80 100
You try to avoid
technology as
much as possible
26
24
96
87
94
37
93
47
88
56
32
57
I Users I Non-users (cellphone)
If you could, you would
make more use
of technology
Cellphone/mobile
banking will make banking
more affordable to use
With cellphone banking,
your money will be as
secure as with other banks
Cellphone banking
can be trusted if
backed by a bank
Cellphone banking can
be trusted if backed
by a cellphone company
Evidence from South Africa: Perceptions of mobile phone banking
among users and non-users (%)
10 Vodafone Group Plc Corporate Responsibility Report 2007
Extending access to communications
continued
Transferring funds internationally can be complicated and expensive,
particularly in relation to the small amounts sent in each transaction. It can
also be diffi cult for recipients to collect the money if they do not have a bank
account or access to fi nancial services.
We are working with Citigroup to tackle this issue by setting up an
international transfer service enabling people to send money abroad and
collect remittances via their mobile phones. The service is being trialled in
Kenya – building on the successful M-PESA product – with a view to expanding
it to markets in Asia and Eastern Europe. Customers in the UK participating
in the pilot will be able to send money via their mobile phone or a dedicated
website to a mobile phone in Kenya. The recipient will receive notifi cation of the
transaction by SMS text message and can withdraw the money sent at a local
mobile retail outlet. Citigroup will provide the fi nancial services needed for the
international transactions.
Announced plans to introduce a low-cost handset in emerging markets
Vodafone has signed a handset procurement agreement with Chinese
manufacturer ZTE Corporation to produce a range of ultra low-cost handsets
that will be Vodafone-only branded. The low-cost handsets are designed
particularly for sale in emerging markets to increase access to communications,
particularly in rural areas where mobile penetration is often at its lowest.
The fi rst of the new range of low-cost handsets – the Vodafone 125 and
Vodafone 225 models – were launched in May 2007. The handsets are designed
to be attractive and durable, and include popular functions such as text
messaging. They are likely to retail at US$25-$45 depending on the model
and the local market. This will enable many more people in emerging markets
to afford access to mobile technology and the benefi ts it brings.
Launched airtime transfer services in four countries
Airtime transfer services have been launched in Albania, Egypt, Kenya and
South Africa. The system allows pre-pay customers to transfer airtime value
from their phone to that of another customer. This enables small amounts of
call-time to be distributed between individuals, and helps small businesses to
have control over their phone usage. In the 2007 fi nancial year, we extended
this model to link airtime balance to a cash card with the launch of Vodafone
Cash in Egypt (see box).
Promoted development of products with high social value through
our £5 million social investment fund
Vodafone launched a new social investment fund in February 2006. We have
committed £5 million to encourage the development of socially benefi cial
products. Support from the fund allows innovative social products to be
developed which may not otherwise be seen as attractive commercial ventures.
The fund focuses on products designed to bring improvements in three key
areas: health, inclusive design and emerging markets. Initiatives supported by
the fund this year included the development of international money transfer
services (opposite), mobile-enabled social alarms (far right) and a new inclusive
user interface for handsets that address the needs of older customers (far right).
We are investigating the option of enabling external organisations to apply
for social investment fund grants with support from one of our local operating
companies with a view to providing a market for the product once developed.
Vodafone Cash launched in Egypt
Vodafone Egypt teamed up with HSBC to launch a new
prepaid bank card tied to air-time balance in Egypt in
the 2007 fi nancial year. The Vodafone Cash service is
designed to give customers with no bank account an
easy way to deposit, transfer and withdraw cash.
Customers can deposit up to 1,000 Egyptian pounds
(around €130) onto their card at any Vodafone Cash
service outlet. They simply pay in cash then swipe
their card to top up the balance. Cash withdrawals
can be made at any Vodafone Cash outlet or HSBC
ATM machine.
The card is linked to the customer’s mobile phone
number. Once they have registered to use the
service, customers can call a dedicated number from
their mobile to transfer money to another Vodafone
Cash customer, pay their monthly phone bills or top
up their prepay balance. Customers are notifi ed of all
transactions by SMS text alerts.
Vodafone low
cost handsets
The Vodafone 125 and Vodafone 225 are
part of Vodafone’s ongoing commitment
to expand access to mobile in emerging
markets, where mobile technology and
networks are often the only available or
affordable telecommunications service.
The handsets are likely to retail at around
US$25-$45 depending on the specifi c
model and the local market conditions.
Vodafone Group Plc Corporate Responsibility Report 2007 11
Surveyed blind and visually impaired consumers on their
accessibility needs
The Vodafone Speaking Phone converts text messages and screen content
to speech. We commissioned consumer research in Spain and the UK in June
2006 to better understand whether this service is meeting the needs of blind
and visually impaired customers and how it could be improved. Mobiles play
a signifi cant role in the everyday lives of those surveyed, not just for
communication but as a means of being independent, providing security and
reassurance when lost and helping to feel part of mainstream social culture.
The research found that a range of services is required to meet the needs
of customers with different levels of visual impairment. The text-to-speech
function is particularly useful for blind customers. People who are less visually
impaired prefer other features such as a larger font size, a more inclusive user
interface or a keypad designed to be easier to use.
The people interviewed preferred these features to be made available in
standard handsets rather than one designed specifi cally for them. Blind and
visually impaired customers also want to be able to use the full functionality
of mobile phones available to other users, especially functions that may be
of particular use to them such as voice-activated location services. Vodafone
is continuing to review opportunities to develop new features to improve the
experience of customers who are blind and visually impaired.
We will
Continue to research the impacts of our products and services
in society and the economy.
Reduce the level of preventable exclusion by at least a third by 2010
Introduce three signifi cant products with features that reduce
exclusion by March 2008.
•
•
•
Tele-assistance service for elderly and
dependent people launched in Spain
People suffering from Alzheimer’s disease or similar conditions
can become easily disoriented. They are often dependent on
constant care and assistance from their families.
Vodafone Spain’s ‘Always with you’ mobile tele-assistance
service is designed to increase their independence, improving
quality of life for them and their families.
The handset is specially designed for people who do not
regularly use mobile phones such as the elderly. It is very
easy to use, with just two buttons – green and red:
The green button calls a pre-programmed contact
number of a friend or family member. If there is no
response from the fi rst number contacted, the call
automatically passes to the next on the list until it
is answered.
The red button connects the user with a mobile
tele-assistance service for immediate help.
The service was developed in close co-operation
with the Spanish Association for Alzheimer’s disease.
It overcomes some of the limitations of existing static tele-
assistance services by offering immediate 24-hour access to
assistance both in the home and outside it through a mobile
device. The device is equipped with a location-based service to
enable families to fi nd their relative if they become disoriented.
It can also be set up to alert families if the user
leaves a designated safety zone.
Vodafone Spain is also working with the
Spanish Red Cross to provide immediate
access via mobile phones to tele-assistance
centre for the elderly or those with special
healthcare needs.
•
•
Boosting developing economies through
international remittances
The World Bank produced a report in March 2006 on the General Principles for International
Remittance Services. The report emphasises the signifi cance of international remittances in
boosting developing economies and the need to make remittance services more accessible.
It states:
“The fl ow of funds from migrant workers back to their families in their home country is an
important source of income in many developing economies. The recipients often depend on
remittances to cover day-to-day living expenses, to provide a cushion against emergencies or,
in some cases, as funds for making small investments.
“For some individual recipient countries, remittances can be as high as a third of GDP. Remittances
also now account for about a third of total global external fi nance; moreover, the fl ow of
remittances seems to be signifi cantly more stable than that of other forms of external fi nance.
“However, remittances can be expensive relative to the often low incomes of migrant
workers and to the rather small amounts sent (typically no more than a few hundred
dollars or its equivalent at a time). Also, it may not be easy for migrants to access remittance
services if they do not speak the local language or do not have the necessary documentation,
while the relatively undeveloped fi nancial infrastructure in some countries may make it
diffi cult for recipients to collect the remittances. In some cases, the services are unreliable,
particularly concerning the time taken for the funds to be transferred.”
Researching the causes of
preventable exclusion
Vodafone commissioned Cambridge University and technology
company Sagentia to conduct a study into preventable
exclusion. The fi rst phase of the research was to identify and
quantify the sources of exclusion. This found that 9% of the
EU adult population have diffi culties using a mobile phone,
particularly if they are elderly or disabled. The study highlighted
several signifi cant sources of exclusion including intimidating
aesthetics of handsets, small screen and button size, and
diffi culties navigating complicated menu systems.
The next challenge was to investigate ways to
reduce this exclusion. A new user interface called
Unity has been developed to make it easier to
navigate menus. In addition, guidelines have been
developed on the look and feel of a handset for more
inclusive product design. These are intended to ensure
new mobile phones are attractive without intimidating
novice users. Several prototype handsets have been produced
(see picture) and research continues on how to bring these
principles into commercial handset design.
05
10
15
20
25
30
I don’t think they could do more
/they do a good job
/things are fine as they are
Make the info more widely
/frequently available to
the general public
Better/less complex
scientific information
More communication
with the public
More/up to date/
information
Use the media/advertise/
TV programmes
Clearer information
re emissions
More information on the
website/online
Thinking about this (all this) information, how could this
have been improved to demonstrate Vodafone
is being responsible?* (Unprompted) (%)
Better communication
with the public
27
20
10
8
8
8
6
6
6
*Top mentions. Mentions below 6% not shown. Base: All who have received info: 48
Source: Ipsos MORI
0
20 40 60 80 100
Vodafone
Other
operators
How seriously do you believe... is taking its responsibilities
in relation to mobile phones, masts and health? (%)
11
15
3
6
1139
36
1944
16
I Very seriously I Fairly seriously I Not very seriously
I Not at all seriously I Don’t know
Base: All global key stakeholders nominated by Vodafone: 70
Source: Ipsos MORI
12 Vodafone Group Plc Corporate Responsibility Report 2007
Mobile phones, masts and health
Material developments:
Current advice, updated in May 2006, from the World Health
Organisation (WHO) in their factsheet on base stations and
wireless technologies states ‘there is no convincing scientifi c
evidence that weak RF signals from base stations and wireless
networks cause adverse health effects’
A number of expert reviews have been published since the last
report, none of which have concluded signifi cant change in the
scientifi c position on mobile phones, mast and health
Our Group Policy on the Health and Safety of Radio Frequency
(RF) fi elds for base stations and handsets was enhanced and
implemented across all operating companies
Further information:
www.vodafone.com/mpmh
WHO electromagnetic fi elds: www.who.int/peh-emf/en/
International Agency for Research
on Cancer (IARC): www.iarc.fr/
•
•
•
•
•
Vodafone recognises that there is public concern about the safety of RF
fi elds from mobile phones and base stations. We are committed to showing
leadership by making objective information widely available and engaging
openly in dialogue with our stakeholders.
We contribute to funding independent scientifi c research into priority areas
identifi ed by the World Health Organisation (WHO). This is done at arms length via
national research programmes and funding organisations such as the Research
Association for Radio Applications in Germany (FGF) and the GSM Association.
In 2006 the WHO identifi ed the main gaps in scientifi c knowledge as:
Long-term exposure
Issues relating to exposure of children
Dosimetry (the calculation of absorbed RF doses)
Current advice by the WHO and from the latest expert reviews does not
suggest any adverse health effects from exposure to low level RF fi elds from
mobile handsets or base stations. However, the WHO continues to promote
further research to determine whether there are any health consequences from
the higher RF exposures from mobile phones. Vodafone is committed to inform
the public of any signifi cant new developments.
The handsets sold by all our local operating companies, and the base stations
they operate, comply with the International Commission on Non-Ionizing
Radiation Protection (ICNIRP) international standard for limiting RF exposure
to people. They also comply with more stringent local requirements where
they exist.
In this section of the report we provide an update on the research into RF
and the anticipated timetable for publication of major ongoing studies. We
also outline Vodafone’s activities.
We said
We would set targets, track and report stakeholder opinion on how
responsibly Vodafone is acting regarding mobile phones, masts and health
by March 2007
We have
Surveyed stakeholder opinion on how responsibly Vodafone is acting
We commissioned Ipsos MORI to interview 70 experts and opinion formers
around the world who have previously had contact with Vodafone and ask them
how seriously Vodafone is taking its responsibilities relating to mobile phones,
masts and health.
The majority (75%) feel that Vodafone takes the issue of mobile phones,
masts and health seriously compared with 60% for other operators.
The survey also provides insights into how we can improve our communication.
Overall, 27% feel we do a good job demonstrating that we are responsible
(see chart, left). However, on masts, 29% feel Vodafone could provide more
and clearer information and promote informed debate. On handsets, 27% feel
Vodafone could be more responsible by providing better and clearer
information about responsible use, including use of hands-free kits. These insights
will help shape our communications with our customers and the general public
over the coming year.
Continued our programme of engagement with a wide range
of stakeholders
Our long-term programme of dialogue with opinion formers and the public
aims to understand their perspective in order to help reduce levels of concern
and to demonstrate that Vodafone is acting responsibly. We have continued to
communicate with a wide range of stakeholder groups including customers, the
general public, national politicians and opinion leaders, investors and analysts,
doctors and health agencies, and employees. Engagement is undertaken by
employees in Group functions and by local operating companies which shape
their engagement to refl ect local concerns. The programme will continue
during the coming year.
Implemented our Group Policy on the Health and Safety of RF Fields
Operating companies have been working to implement the policy for two and a
half years. The policy deals with potential risks to health and safety that may arise
from employees or the public being exposed to RF fi elds. All phases of the
•
•
•
•
Vodafone Group Plc Corporate Responsibility Report 2007 13
lifecycle of radio base station and terminal (handset) equipment – from
procurement through to operation and maintenance – are covered in the policy.
In compliance with the policy, over 80,000 base station sites now have clear
signage with effective access controls for restricted areas.
An audit of the policy commenced in March 2007 and will be completed by
the summer. We will report on progress against any identifi ed audit actions in
next year’s report.
Shared good practice across the Group
We have strengthened our approach to ensuring that examples of good
practice, especially in communicating with the public on RF and health, are
quickly and effi ciently spread across the Group. We now share good practice in
several ways including face-to-face meetings, telephone and video conference
calls, and online and face-to-face workshops for larger groups.
These have focused on areas such as the implementation of the Health
and Safety of RF fi elds Policy to ensure a common understanding of the policy
and on how to provide information on base station sites to potential landlords.
This approach is supported by a dedicated area on our intranet making
examples of good practice available to all operating companies.
Led the industry in measuring RF exposure from equipment worn
next to the body
The specifi c absorption rate (SAR) is used to measure a person’s exposure to an
RF fi eld. Vodafone requires manufacturers of the mobiles it sells to test for SAR
compliance when used against the ear and against or near to the body using the
US Federal Communications Commission test procedure. We are working with
the International Electrotechnical Commission Standards Organisation to
develop and gain agreement to a new global protocol for testing phones and
other mobile devices worn close to the body.
Continued to defend four legal actions in the USA
Vodafone, along with various other carriers and mobile phone manufacturers,
is a defendant in four actions in the USA alleging personal injury, including brain
cancer, from mobile phone use. These personal injury claims have not been
substantiated and we are vigorously defending against them.
For further information, see our Annual Report at www.vodafone.com.
We will
Achieve a higher approval rating among external opinion leaders for
the responsibility of Vodafone’s actions regarding mobile phones,
masts and health (compared with the survey results from the 2007
fi nancial year).
Set a quantitative target following our second survey in the 2008
fi nancial year.
•
•
Signifi cant reviews and research published in the 2007
fi nancial year
The fl ow of reports from individual studies and research programmes continued in the 2007 fi nancial
year. Vodafone places emphasis on independent expert assessments that consider the entirety of
scientifi c knowledge rather than individual studies. Here, we report the key science reviews
published in the last year. The WHO website provides an extensive listing of science in this area.
WHO factsheet on base stations and wireless technologies
The latest factsheet from the WHO International EMF project was published in May 2006.
The factsheet includes a review of health concerns, protection standards and public perception
of risk. The conclusion states:
“Considering the very low exposure levels and research results collected to date, there is
no convincing scientifi c evidence that the weak RF signals from base stations and wireless
networks cause adverse health effects.”
Further information:
www.who.int/mediacentre/factsheets/fs304/en/index.html
European Commission Scientifi c Committee on Emerging and Newly Identifi ed Health
Risks (SCENIHR)
SCENIHR published its updated opinion on ‘Possible effects of Electromagnetic Fields’ in March
2007, following a period of public consultation. The opinion of the expert panel is:
“In conclusion, no health effect has been consistently demonstrated at exposure levels
below the ICNIRP-limits established in 1998. However, the data base for this evaluation is
limited especially for long-term low-level exposure.”
Further information:
http://ec.europa.eu/health/ph_risk/committees/04_scenihr/scenihr_
cons_03_en.htm
The Health Council of the Netherlands (HCN)
The HCN focused their fourth annual update of EMF and health, published in February 2007,
on UMTS (3G) and Digital Enhanced Cordless Telecommunications (DECT) technologies.
The HCN concludes:
“The research in Switzerland, which set out to repeat the TNO study using an improved
design, did not confi rm the TNO fi ndings. As the Swiss study built on the experience
gathered by the TNO researchers, its design was better and more comprehensive and
consequently its results have more weight than those of the TNO study.”
Further information:
www.healthcouncil.nl & www.tno.nl/
The Swedish Radiation Protection Authority
The Independent Expert Group of the Swedish Radiation Protection Authority (SSI) published
its fourth annual review of EMF and Health in March 2007. To review the health effects of RF in
relation to their previous annual reviews, the Expert Group examined the evidence from recent
laboratory studies, RF mechanistic studies, epidemiological studies and other emerging issues.
Although the SSI Independent Expert Group do not make a general overall conclusion on RF,
EMF and health, their position has not changed since the last annual report in that they believe
the current weight of evidence is against the existence of non-thermal effects from RF EMF.
Further information:
www.ssi.se/english/lank_symbol_Eng.html
The Irish Independent Expert Group
This report published in March 2007 gives the conclusions and recommendations of an
independent Expert Group appointed by the Irish Government. The Expert Group reviewed the
scientifi c evidence for adverse health effects in the RF range 300 Hz to 300 GHz. The group also
undertook consultation with central and local government, concerned citizens and industry.
The report makes a number of scientifi c conclusions and recommendations. In relation to adverse
health effects from mobile phones and bases stations, the Irish Expert Group concludes:
“So far no adverse short or long-term health effects have been found from exposure
to the RF signals produced by mobile phones and base station transmitters. RF signals
have not been found to cause cancer. However research is underway to investigate
whether there are likely to be any subtle, non cancer effects on children
and adolescents. The results of this research will need to be considered in due course.”
Further information:
www.dcmnr.gov.ie/NR/rdonlyres/9E29937F-1A27-4A16-A8C3-
F403A623300C/0/ElectromagneticReport.pdf
Publications from the INTERPHONE study
INTERPHONE is a multinational study, coordinated by the International Agency for Research
on Cancer (IARC). The study is designed to look for associations between mobile phone use and
various head and neck tumours, by comparing personal recall of past mobile phone use in people
with and without tumours. Results from several of the collaborating INTERPHONE research teams
were published during the 2007 fi nancial year. In a joint publication between the Danish and
Swedish teams, published in July 2006, the researchers concluded that their results do not provide
support for an association between mobile phone use and tumours of the parotid (salivary) gland.
The Japanese research team published their results on acoustic neuroma in August 2006
concluding there is no increased risk in mobile phone users. In January 2007, the combined
glioma (brain tumour) data from Denmark, Finland, Norway, Sweden and the UK was published,
concluding there is no consistent evidence for an association between mobile phone use
and glioma. INTERPHONE researchers consistently point out that the risks associated with
developing head and neck tumours after 10 years or more use are currently unknown since
INTERPHONE was not designed to examined long-term risks.
Further information:
www.iarc.fr/ENG/Units/RCA4.php
Forthcoming signifi cant reviews and research
The schedule for publication of forthcoming major reviews (below) depends on completion
of the research and cannot be defi nitely predicted. The WHO report will await the fi ndings of
the IARC report.
INTERPHONE currently aims to submit the combined analyses from all the national
teams by the second half of 2007.
The International Agency for Research on Cancer (IARC) will conduct a review of the
science leading to a formal classifi cation of the cancer potential of RF fi elds. IARC routinely
conduct reviews of materials in common use to provide scientifi c advice.
The WHO RF health risk assessment will review the scientifi c evidence on all health outcomes
arising from human exposure to RF fi elds. The IARC classifi cation will be a key input.
Health and safety information on
RF is posted on our base station sites
for employees working in network
deployment and maintenance.
14 Vodafone Group Plc Corporate Responsibility Report 2007
Responsible network deployment
Material developments:
Responsible network deployment: Data collected and
reported for the fi rst time against key performance indicators
to track implementation of our Group policy and guidelines
on responsible network deployment
Network sharing agreements announced in two more
operating companies
Working with contractors to ensure they implement
our Group policy and guidelines, particularly as deployment
and management of our network is increasingly being
outsourced or shared
Undertaking community consultation in our selection and
management of base station sites is vital to promote public
trust in our network deployment
Local legislation: Reviewed our compliance with local
planning legislation
Further information:
www.vodafone.com/responsibility/networkrollout
Balancing community and technical considerations
Local industry codes of practice
How mobile phones work
How base stations work
Visual impact
•
•
•
•
•
•
•
•
•
•
Our mobile services depend on a network of base stations to transmit and
receive calls and data. Vodafone continually invests in network deployment
to improve coverage and capacity to support new services such as video calls,
broadband access to internet or mobile TV. We are continually reviewing our
processes to manage the acquisition, operation and maintenance of these assets.
We recognise that our network deployment has sometimes raised concerns from
communities, usually about the visual impact of base stations or health issues
from radio frequency (RF) fi elds. Community expectations are one of the many
considerations we have to balance when choosing base station sites, including
technical requirements, quality of service and licence obligations.
Globally, most base station site developments are not opposed. When
people raise objections, our policy is to listen to and accommodate their views
wherever possible. The way we engage with communities can greatly infl uence
their reactions to our network deployment. We believe that providing clear
information early in the process is the best way to offer reassurance and obtain
consent. We recognise that the nature of community concerns varies in
different markets. Our Group policy and guidelines on responsible network
deployment encourage our operating companies to take into account local
cultures in their approach to network deployment.
We said
We would have developed, and be reporting against, a method to measure
and track key stakeholder opinion relating to how responsibly Vodafone is
deploying its network by March 2007
We have
Developed a method to measure and track key stakeholder opinion on
how responsibly Vodafone is deploying its network
We measure implementation of our Group policy and guidelines through a set
of key performance indicators (KPIs) that also track stakeholder opinion. These
include the percentage of contracts not renewed by property owners; the number
of local authority objections to applications; the average time to obtain consent
after an application has been put forward; and surveys of landlords and the general
public. We have begun to report against these KPIs in all local operating companies
this year, meeting our target.
We collected data on these KPIs for the fi rst time this year and will continue to
do so in future years to enable us to analyse trends and assess the impact of our
initiatives. During the 2007 fi nancial year, an average of only 0.75% of contracts
due to be renegotiated were not renewed by property owners across the Group,
with a maximum of 2.65% not renewed in an individual operating company. The
average time to obtain licensing after an application was put forward for approval
was 207 days, varying from a minimum of 20 to a maximum of 491 days in
individual markets. We continue to work with governments and local authorities
to emphasise that long decision periods not only have an impact on the pace at
which our business can grow, but that they also hinder our ability to meet agreed
licence obligations to provide coverage in certain areas enabling services such
as emergency calls.
A survey of landlords was carried out in fi ve operating companies in the 2007
fi nancial year (see case study on Spain, right). We plan to develop a set of common
questions for all local operating companies to use in landlord surveys to help us
track landlord satisfaction levels across the Group. We commissioned a perception
survey of the general public on issues related to responsible network deployment,
and mobile phones, masts and health in the 2006 fi nancial year. Similar surveys will
be carried out every two to three years in future.
Made building public trust in our network deployment activities a key priority
Public reaction to placing of a mast in local neighbourhoods was identifi ed as a
key performance indicator from the MORI survey we commissioned in the 2006
fi nancial year. An average of 7% of those surveyed in 15 markets said they were
suspicious about the deployment of our network, with this proportion ranging
from 1% to 17% in individual operating companies. We will continue to track
public trust in our network deployment and defi ne a target to increase public
acceptance by March 2008.
Clear communication and consultation helps to increase public acceptance.
We want people to feel confi dent that we have safeguards in place to ensure
our networks are deployed responsibly. These include our global policies and
training requirements for employees and subcontractors involved in network
deployment. Further information is provided by our operating companies either
in leafl ets in our retail stores or on our local websites.
•
Local operating company Local industry code signed up to
Australia Australian Construction Industry Forum Code “Deployment
of Mobile Phone Network Infrastructure”.
Germany 1. Agreement on Exchanging Information and Involving Local
Communities
2. Self-commitment to measures for improving safety,
environmental and health protection, information and confi dence.
Netherlands Dutch Mobile Operators Code of Conduct (2000)
Dutch Antenna Covenant (Operators, central and local
Governments) (2003)
New Zealand New Zealand Urban Design Protocol
Portugal Memorandum of Understanding with other operators regarding
Masts and Health EMF Policy
Spain Best Practices Code for the Deployment of Mobile Telephony
Infrastructures
UK Code of Best Practice on Mobile Phone Network Development
Local codes of conduct
In some countries where we operate we have signed up to recognised codes of
conduct on responsible network deployment in partnership with other service
providers, local authorities, governments and consumer associations.
Vodafone Group Plc Corporate Responsibility Report 2007 15
Provided training on responsible network deployment
During the 2007 fi nancial year, we continued to provide training on our Group
policy and guidelines for employees working in network deployment or dealing
with customers and the general public. We provide handbooks for contractors
to explain our standards and we aim to certify every individual working on our
networks as a subcontractor before they start working with Vodafone. This is
particularly important as our network deployment is increasingly outsourced.
Next year, we plan to introduce a system to track training of employees and
contractors in all local operating companies.
Built 4,453 new base station sites
New base station sites installed in the 2007 fi nancial year bring our total
number of base station sites worldwide to 83,561, an increase of 6% from last
year. The roll-out of new network infrastructure is focused mainly in emerging
markets, where we are expanding our business. Our experience in mature
markets enables us to use proven best practices in the deployment of new
networks. Similarly, the innovative techniques trialled in emerging markets
can also be used in the optimisation of networks in mature markets.
Established agreements with other mobile operators to share networks
By cooperating with other mobile operators to share sites, we can reduce the
total number of base station sites required. This cuts costs, enables faster
network deployment and reduces the environmental footprint of the network
without loss of quality or coverage. We have announced sharing agreements in
Spain and the UK, in addition to the existing joint venture in Australia.
Vodafone Spain signed an agreement with Orange in November 2006 to
share 1,000 3G base station sites by October 2007, with a view to expand this
number to 5,000 over the next four years. Shared sites in small towns (with
populations of less than 25,000) will improve network coverage for both
companies by approximately 25% and reduce the number of base station sites
needed in the respective area by 40%. Vodafone announced a similar proposal
in February 2007 to share base station sites with Orange in the UK. The proposal
outline plans to combine the 3G network infrastructure of the two companies
over a number of years. In September 2006, Vodafone began negotiations with
T-Mobile to share and develop network infrastructure in the Czech Republic.
Reviewed our compliance with local planning legislation
We always seek to comply with existing planning legislation in all the countries
where we operate. However, individual local municipalities in some countries have
put in place their own planning regulations that confl ict with national legislation.
This presents a challenge for Vodafone and we have successfully appealed to
courts in a number of cases to confi rm that national legislation should override
local regulations. However, confl icting local and national laws make it very
diffi cult for Vodafone to comply with both. Certain local planning offi ces continue
to refuse to issue licences despite orders to do so from higher courts.
In Greece, new legislation was issued in March 2006 with retrospective effect,
resulting in over 400 fully compliant sites no longer being compliant. Vodafone
Greece is now taking steps to relicence those base station sites but has, in the
meantime, received notices of planning violations and fi nes. We will continue to
consult local, regional and national authorities, consumer and local community
associations, and industry to agree an acceptable solution for all parties.
Vodafone was found in breach of planning regulations relating to 423 base
station sites and received fi nes for environmental offences of £16,492 across
three markets in the 2007 fi nancial year. One prosecution under environmental
law was reported in the UK, resulting in a fi ne of £5,000 for a breach of the Water
Resources Act.
We will
Update existing network deployment guidelines and assess local
operating companies' compliance with global policy by March 2008.
Continue to track public views on our network deployment and defi ne
a target to increase public acceptance by March 2008.
Introduce a system to track training of all employees and contractors
working in network deployment across the Group.
Develop a set of common questions for all local operating companies
to use in landlord surveys to track landlord satisfaction levels across
the Group.
•
•
•
•
Outsourcing network management in the Netherlands
Vodafone Netherlands outsourced the operation and maintenance of much of its mobile network
in April 2006. Vodafone continues to own the network and manage core elements but has
contracted Ericsson to manage the rest. Ericsson is one of Vodafone’s biggest suppliers. It must –
like all suppliers – sign up to our Code of Ethical Purchasing as part of its initial qualifi cation and
continual assessment (see page 20). This Code covers the environment, and health and safety,
among other issues.
Ericsson is also obliged to implement Vodafone’s Group policies, including those covering
responsible network deployment, health and safety and RF fi elds, as part of its contract as a network
outsourcing partner. Implementation of these policies is monitored quarterly through self-
assessment. In addition, we audited compliance with our Health and Safety Policy in March 2007.
In September 2006, Ericsson and Vodafone piloted a joint initiative to better address community
concerns about network roll-out. The initiative focused on transparent and open communication.
As a result, 80% of local councils that were previously reluctant to support the construction of base
station sites have gone on to grant permissions for masts to be built in their areas.
Responding to landlords in Spain
Results from our survey of landlords in Spain indicate that the top three reasons for
dissatisfaction in their dealings with Vodafone are the level of fees offered, confusing
contracts and revisions to contracts. More than a third of our base station sites landlords
surveyed in Spain said they had diffi culty or did not know how to contact Vodafone. In
response to this feedback, Vodafone Spain set up a dedicated call centre to manage any
issues raised by base station landlords. The call centre is run by fi ve full-time Vodafone
employees and receives around 1,000 calls a month. Most calls relate to everyday
maintenance issues and payment queries.
How does a network work?
Our network is made up of a series of base
stations, each covering a specifi c area called
a cell. A base station consists of
antennas that provide the link
between handsets and the
network, a supporting mast
and a cabinet to house
network equipment.
Masts constructed to
blend in with existing
chimney on a building.
Area of coverage
for a base station
Base station
Mobile phone
Exchange
To other
networks
16 Vodafone Group Plc Corporate Responsibility Report 2007
Earning the trust of our customers
Material developments:
Content standards: Access controls available from all operating
companies that offer 18-rated content. Internet fi lters offered by
fi ve operating companies.
Clear pricing: Vodafone Passport is now available in 13 operating
companies and the average cost of European roaming calls has
been cut by 40%.
Responsible marketing: New policy introduced to reduce the
small print in our marketing material.
Privacy: Extensive stakeholder engagement on privacy issues,
privacy offi cers appointed in all operating companies.
Mobile advertising: Group guidelines drafted on protecting
customer privacy and upholding content standards in mobile
advertising.
Compliance: Vodafone Greece was fi ned €76 million for breach
of telecommunications privacy legislation and is appealing
the ruling.
Further information:
www.vodafone.com/responsibility/customers
Spam
Premium rate services
Location services
Mobile theft
Driving safety
Text bullying
•
•
•
•
•
•
•
•
•
•
•
•
Vodafone’s reputation depends on earning the trust of its customers. Their
loyalty is vital to the long-term success of our business. This section covers a
range of issues that we believe play an important part in maintaining customer
trust. These include the clarity of our pricing, the responsibility of our marketing
material, the way we handle customer privacy and our measures to protect
customers from inappropriate content, contact and commercialism.
We recognise our responsibility to communicate clearly and fairly with
customers and potential customers at all times. Vodafone is introducing mobile
advertising in several operating companies in the coming year. This raises a
number of issues relating to customer trust including clear communication
on how to opt in to receive targeted advertising, compliance with advertising
standards and appropriate use of personal information.
Customer privacy has been highlighted by stakeholders as an important
issue. Preventing misuse of personal data is vital to maintain customer trust.
Vodafone aims to safeguard customer privacy where this is compatible with the
requirements of governments for us to assist law enforcement authorities in
tackling serious crime and terrorism.
Our goal is to ensure customers are satisfi ed with our service and in control
of how they use it. Customers can access an ever-expanding range of features
and services on their mobile phones including picture messaging, downloadable
games, music, pictures and video clips, internet access and mobile television.
Our access controls enable parents to prevent their children from accessing
age-restricted content. We also have policies to combat spam and misleading
subscription services.
We said
We would implement access control solutions which prevent inappropriate
access to age-restricted content and services by March 2007
We would develop and make available a global mobile internet fi ltering
solution to all markets by March 2007
We would assess compliance with our anti-spam policy and review our
customers’ ability to report spam in all operating companies by March 2007
We would reduce the cost of European voice roaming by at least 40% by
April 2007
We would be a recognised leader in responsible marketing by March 2007
We would engage with key stakeholders about customer privacy issues by
March 2007 and seek their views on the appropriate balance between
safeguarding privacy and assisting law enforcement authorities to tackle
serious crime and terrorism
We have
Continued to implement access controls and internet fi ltering
across the Group
Our access controls prevent children accessing 18-rated content on the
Vodafone live! portal by either requiring users to verify their age as 18 or over,
or by enabling parents to select a profi le for their child that will remove 18-rated
content. These are available from all our local operating companies that offer
age-restricted content, meeting our target. Our other operating companies do
not offer age-restricted content.
Our internet fi lter enables parents to prevent their children accessing
inappropriate age-restricted content on the internet via their mobile phones.
We introduced the internet fi lter in four operating companies in the 2007
fi nancial year, making it available in a total of fi ve markets. Two operating
companies did not meet their target to implement the fi lter by March 2007
but plan to do so by August 2007. Our new operating companies in the Czech
Republic and Romania have set targets to implement a fi lter by March 2008.
Four operating companies were originally exempted due to low usage of data
services, although one of these, Vodafone Hungary, has decided to implement
a fi lter by March 2008.
Local operating companies that have not implemented the fi lter will remove
access to the internet completely on request by customers. We are currently
reviewing alternative options available in these markets, including any new or
alternative technical solutions, as well as education and awareness campaigns,
before mandating a revised date for the implementation of the fi lter.
•
•
•
•
•
•
Implementation of our content standards by operating companies
Operating
company
Access
controls
Internet
fi lter
Anti-spam
reporting
Signed up to local
industry codes
Albania
18
▼KB
N/A
Australia
18
Aug 2007
✔
Mobile Content and Premium
Rate Services
Czech Republic
18
March 2008 N/A Premium SMS Services Code,
2006
Egypt
18
▼KB ✔
Germany
✔
i
✔
Protection of minors from
adult content 2005
Greece
18
i
✔
Code for mobile value-added
services and for the
protection of minor users
Hungary
18
March 2008
✔
Ireland
18
✔✔
Responsible use of mobiles,
2006
Italy
✔✔✔
Child Protection and
Premium Rate Services, 2005
Malta
18
▼KB
N/A
Netherlands
✔
i
✔
Mobile Content 2005
New Zealand
18
Aug 2007
✔
Mobile Content 2006
Portugal
18
✔✔
Romania
18
March 2008 N/A
Spain
✔✔✔
Premium Rate Services
UK
✔✔✔
Premium rate services,
location Base Services and
Mobile Content and Short
Codes, 2004 and 2005
Key:
18
No 18-rated content on Vodafone live!
▼KB Currently low usage of data services
i
Access to internet removed on request
N/A Not included in the self-assessment exercise
Vodafone Ireland introduces new
internet fi ltering system
Vodafone Ireland is strengthening its internet fi lter with the
help of the Internet Watch Foundation (IWF). The IWF compiles
an internationally recognised list of reported websites that
contain illegal images of children. Vodafone’s
internet fi lter will use the IWF’s global list of
illegal websites to block child pornography
images. The main objective is to stop
the ‘innocent’ or ‘curious’ accidentally
accessing illegal material. This system
has already been very successful in the
UK and we plan to introduce it to more
markets in the future.
R
Vodafone Group Plc Corporate Responsibility Report 2007 17
Vodafone Italy launches
children’s phone
More than half of children aged between eight and
13 in Italy already own a mobile phone. Vodafone
Italy has launched a new mobile phone designed
specifi cally for children enabling parents to keep in
touch and protect their children by controlling how
they use their mobile.
The Vodafone Primofonino enables children to
contact their parents by pushing a single button.
Incoming and outgoing calls and text messages are
restricted to numbers already saved in the phone’s
contact list. The phone has no browsing capabilities,
preventing children accessing the internet via
their mobile.
Vodafone Italy consulted a range of stakeholders,
including consumer and parents’ associations,
in the development of the
phone. A guide to
responsible use – written
in consultation with
Italian parents’
association, MOIGE –
is included with the
phone.
Vodafone global head of content
standards named internet hero
The Internet Service Providers Association (ISPA) – the
UK’s leading internet trade association – has named
Vodafone’s Global Head of Content Standards, Annie
Mullins (pictured), an ‘Internet Hero’. Every year ISPA
names individuals or organisations that have helped or
hindered the industry as Internet ‘Heros’ or ‘Villains’. Annie
won the Hero award for her work with the UK Government
Home Offi ce Task Force for Child
Protection on the Internet. She was
also nominated for the Internet Watch
Foundation award in recognition of her
efforts to protect younger users from
inappropriate online content through
Vodafone’s content standards
programme and work with the EU.
Assessed compliance with our policies on anti-spam and location services
We asked our operating companies to complete a self-assessment
questionnaire at the end of the 2006 fi nancial year. Responses from all
operating companies participating in the self-assessment indicate that
customers are able to report spam in all markets in accordance with our
anti-spam policy.
Location services identify the location of a mobile phone to provide local
information to the user on request. It is our policy to ensure customers cannot be
tracked without their prior consent, and all operating companies are committed
to implementing the policy before entering into agreements with companies that
offer location services. Three operating companies offer passive location services
to business customers to track fl eet vehicles. In these cases, it is the responsibility
of the business customer to gain consent from their employees.
Signed the European Framework for Safer Mobile use by Younger
Teenagers and Children
We joined other leading European mobile operators in February 2007 to sign an
agreement on how to protect young people using mobile phones. Signatories
to the framework are committed to develop national self-regulatory codes on
child safety and mobile phones within a year. These should include access
control mechanisms, customer awareness and education, classifi cation of
commercial content to identify adult material, and measures to combat illegal
child content. Our implementation of the code will build on our existing content
standards programme. Implementation of the code will be monitored by the
European Commission.
Vodafone supported the 2007 safer internet day run by InSafe, an
organisation funded by the European Commission to raise awareness of internet
safety issues. Children from more than 200 schools in 25 countries around the
world took part in a competition to create internet safety awareness material.
Vodafone sponsored prizes for entries on the themes of e-privacy and
netiquette. We are keen to continue our support of InSafe.
Reviewed our policies on content standards in view of changes
in the business
In the 2007 fi nancial year, Vodafone announced partnerships with YouTube,
MySpace and other popular internet sites to make them available via mobile.
Social networking sites are increasingly popular with teenagers, raising
concerns among some stakeholders about the potential risks of making
personal information publicly available. In addition, we now offer home
broadband internet services in fi ve local operating companies.
Vodafone is in the early stages of introducing these new services. We are
reviewing existing policies on content standards to ensure we continue to
enable parents to protect their children from inappropriate content and
contact. We are developing Group guidelines on home broadband services and
social networking websites. Our contracts with YouTube, MySpace and other
similar sites include clauses that will allow Vodafone to work with them to
protect users from inappropriate content.
Reduced by 40% the average cost of roaming calls in every European
operating company
Over 30 million of our customers use their mobile phones when they travel
abroad every year. Market research shows they expect the service to be ‘like
home’ with fair, clear pricing when using their mobiles abroad. The EU has also
focused on this issue. Vodafone pioneered efforts to improve the transparency
of roaming prices and reduce roaming costs with the launch of Vodafone
Passport in 11 markets in 2005. This service allows customers to take their
home tariff abroad paying just a small connection fee per call. We introduced
Vodafone Passport in a further two European operating companies in the 2007
fi nancial year, making it available in a total of 13 markets. Vodafone Passport is
now used by over 11 million customers, cutting the cost of their calls per
minute by more than half compared with prices in June 2005.
In May 2006, we publicly committed to reduce the average cost of calls for
our customers using Vodafone networks in Europe outside their home country
by 40% by April 2007. The average cost of roaming calls fell from €0.79 to less
than €0.48 per minute, delivering this commitment. Vodafone is also working
with other mobile operators to introduce reciprocal arrangements to ensure
that wholesale roaming charges are no more than €0.45 per minute for calls.
We have signed such agreements with 32 operators, covering 94% of in-bound
traffi c and 87% of out-bound traffi c across the EU.
18 Vodafone Group Plc Corporate Responsibility Report 2007
Earning the trust of our customers
continued
In addition to increasing the transparency of roaming call costs, Vodafone
announced a new fl at-rate tariff in March 2007 that will signifi cantly reduce the
cost of data roaming. From July 2007, customers in Europe will be able to use
internet and e-mail services from a mobile-enabled laptop for a fl at-rate fee
of €12 a day when roaming abroad.
To further improve transparency, we introduced a free pricing information
service for customers travelling across Europe in the 2007 fi nancial year.
Customers can text Vodafone from home or abroad to receive a free message
detailing the cost of making and receiving calls. Vodafone also participates
in a web-based initiative launched by the GSM Association in July 2006 to
increase transparency of roaming costs in Europe. Consumers can now visit
the GSM website to compare roaming costs from around 75 operators at
www.roaming.gsmeurope.org.
Engaged with key stakeholders about customer privacy issues
Our customers entrust us with their personal information and the
confi dentiality of their private communications. The way we handle this
information is a vital part of our responsibility to customers and how we earn
their trust. However, faced with increasing demands for surveillance in the fi ght
against serious crime and terrorism, we are sometimes called upon to assist law
enforcement authorities in the interests of protecting public safety or security.
We have therefore established a dialogue with key stakeholders to seek their
views on the appropriate balance between safeguarding privacy and assisting
law enforcement authorities to tackle serious crime and terrorism. This
included several face-to-face meetings and other engagement activities
throughout the year. We also commissioned a paper on this issue to inform
stakeholders and stimulate the dialogue.
A panel of fi ve privacy experts – representing privacy NGOs, public law
enforcement authorities and a global internet company – took part in our
annual corporate responsibility conference in July 2006 to raise awareness of
privacy issues among our local operating company corporate responsibility
managers.
In February 2007, we held a focus group with seven external experts to
explore privacy issues, particularly as they apply to a mobile communications
business (see box, top right). The fi ndings will feed into a new paper in the
Vodafone CR dialogues series.
Participated in a multi-stakeholder process to develop principles on
freedom of expression and privacy for the ICT industry
Internet companies came under scrutiny in 2006 over several cases with
implications for customer privacy and freedom of expression. In some cases,
customer data had been disclosed to and used by governments to infringe their
citizens’ rights to privacy and freedom of expression. In other cases, certain
internet searches and blogs were blocked. This issue is not yet seen as a major
problem for mobile operators but we see it as a potential issue.
We are participating in a multi-stakeholder engagement process, together
with Google, Microsoft, TeliaSonera and Yahoo!, to draft principles on freedom
of expression and privacy for the ICT industry. The dialogue is being facilitated
by Business for Social Responsibility and the Center for Democracy and
Technology with the participation of more than 20 other organisations,
including human rights NGOs, civil liberties groups, investors, academics and
technology organisations. Through an in-depth dialogue at a series of meetings
throughout the year, the group is drafting a set of principles to be fi nalised later
in 2007.
Continued to develop a Group-wide policy on law enforcement assistance
The responsibility of telecommunications operators to provide assistance to
law enforcement authorities has an impact on the privacy and freedom of
expression of their customers. Vodafone is developing a Group-wide policy on
law enforcement assistance to ensure we strike the right balance between
these confl icting obligations. Our participation in the process to draft industry
guidelines on freedom of expression and privacy will feed into the development
of our Group-wide policy on law enforcement assistance to be completed next
year. Vodafone has also recruited a new dedicated advisor to the Group Fraud,
Risk and Security function to help coordinate law enforcement activities and
ensure compliance with our Group policy.
Cutting out asterisks and small print
in Romania and the Czech Republic
Market research suggests that extensive small print and
asterisks mean many consumers do not understand the benefi ts
of promotions offered by mobile operators. Our global strategy
is to reduce small print and asterisks in our advertising. Vodafone
Romania put this into practice with
a fun ‘no asterisk’ advertising
campaign (see poster below).
Details of promotions were laid out
clearly, simply and prominently in
all advertising material, eliminating
the need for small print. In the
Czech Republic, a ‘no small print’
campaign was launched entitled
“No fl ea text. No hidden hooks.”
(see poster, right).
Customer privacy: exploring the issues
The wide range of questions raised at our privacy focus group in February 2007
highlights the breadth of issues this topic touches upon. Participants included
seven privacy experts representing academia, industry, investors, NGOs,
government and law enforcement authorities.
One of the key issues explored related to fi nding an appropriate balance between
safeguarding customer privacy and assisting law enforcement authorities. Most
participants agreed that it is not the responsibility of mobile operators to question
requests for customer data from governments and law enforcement agencies.
The main concern is about inappropriate commercial use of data, or theft of data
by criminals rather than governmental access.
However, government requests for data may be more of a concern for companies
operating in an undemocratic regime with a poor record on human rights.
Participants felt it would be unrealistic to expect companies to decide whether to
comply with government requests on a case-by-case basis. The key CR decision is
whether to enter a country – once a company is operating in a country it must
abide by its laws.
The potential implications of targeted mobile advertising for customer privacy
were also discussed. Participants generally agreed that it is legitimate to offer
customers the choice to opt in to targeted advertising in return for cost benefi ts.
The issue is how to obtain consent clearly and fairly. Some participants raised
concerns about the type of advertising customers might receive and wanted
reassurance that advertising standards would be upheld.
0 20406080100
You can opt
in or out of
the advertising
You can decide
how much advertising
you receive
You only receive
advertising about things
you are interested in
The advertising is
controlled and sent
by your network
You only receive advertising
about things you can do
on or use with your phone
You only receive
advertising relating to
well-known brands
80
77
47
42
16
13
Consumer survey responses
%
Source: Vodafone’s consumer research
Vodafone Group Plc Corporate Responsibility Report 2007 19
Appointed privacy offi cers at all local operating companies
Our Group Privacy Policy – introduced in November 2005 – requires each local
operating company to appoint a privacy offi cer with day-to-day responsibility for
compliance. Privacy offi cers have now been appointed at all operating companies.
Been found in breach of privacy legislation in Greece
Vodafone Greece was made aware in March 2005 that software capable of
interception had been installed in the network without Vodafone’s knowledge.
The foreign software was removed immediately and the Greek Government and
judicial authorities were promptly informed. As a result of investigations by the
administrative authority for secrecy of communications, Vodafone Greece was
fi ned €76 million for breach of legislation in force. Vodafone has paid this fi ne
but is seeking to have the decision annulled.
Drafted guidelines on mobile advertising
We intend to introduce mobile advertising in several markets in the 2008
fi nancial year. The approach and details will vary across different operating
companies. Advertising may take various forms including banner advertisements
placed on the Vodafone live! portal or inserted into download content.
We have drafted guidelines for our local operating companies to ensure
customer privacy is protected, advertising is responsible and advertising
standards are upheld. The guidelines build on our established Group Privacy
Policy and Content Standards policies. They aim to ensure our customers are
protected from inappropriate content, contact and commercialism. The
guidelines emphasise that customers’ privacy will be protected and their personal
information will not be used for advertising purposes without prior consent.
We held a workshop in March 2007 for legal, privacy and advertising
managers from local operating companies that included a discussion of
potential CR issues emerging from mobile advertising. These issues were
also explored at our external privacy focus group in February 2007. The main
concerns expressed by participants related to obtaining customer consent
to use customer data for targeted advertising and ensuring mobile advertising
is responsible (see box, right).
Been rated among the leaders in the industry in responsible marketing
Three years ago we set ourselves the objective of being a recognised leader
in responsible marketing by March 2007. In 2006 we asked more than 400
consumers in 12 markets where we operate which telecommunications
companies do more than others to be responsible and fair in the way they
do business. The majority of consumers surveyed placed Vodafone fi rst in six
countries, second in fi ve and third in one. Although this does not confi rm that
we have met our target to be a recognised leader, we work continually to drive
the industry to adopt higher standards in responsible marketing.
Complaints upheld by advertising regulatory bodies are monitored by all our
local operating companies. In the 2007 fi nancial year, Vodafone’s advertising
caused 30 complaints to be upheld by authorities. The most common cause for
complaint about our advertising in the 2007 fi nancial year was again insuffi ciently
clear communication of pricing and services. Advertising complaints resulted in
total fi nes of approximately £250,000 in the 2007 fi nancial year.
Reduced the small print and asterisks in our advertising
Insuffi ciently clear pricing and extensive small print can affect the level of
trust our customers place in Vodafone and the service packages we offer.
Our aim is to progressively reduce the amount of small print in our advertising,
which has taken place in a number of local operating companies. We launched
‘no small print’ advertising approaches in the Czech Republic and Romania this
year, cutting out the small print completely (see box, left). In Germany, we
reduced the amount of small print by around 40%.
We will
Launch a campaign in each local operating company to address
a locally relevant customer issue by March 2008.
Conduct consumer research and publish global guidelines on social
networking sites and mobile advertising by March 2008.
Launch an on-line privacy awareness programme in all our local
operating companies to describe Vodafone’s privacy policy and
what it means for employees by March 2008.
•
•
•
Consumer perceptions of mobile advertising
We have conducted a range of research projects and trials exploring the
customer impact of targeted advertising. The fi ndings indicate customers are
open to the concept of mobile advertising provided that the advertising is not
intrusive, their privacy is protected, the adverts are relevant and that they get
something in return, such as subsidised or free services.
CR information by text from
Vodafone Greece
Vodafone Greece has set up a dedicated four-digit
number (1004) to enable customers to enquire
about CR issues quickly and easily from their mobile
phone. Customers can ask a CR question free of
charge via SMS text message and receive a text
reply. Additional printed information may also be
sent if appropriate. More than 200 text questions
have been received since the number was launched
in October 2006, mainly asking for information
about handset recycling or about mobile phones,
masts and health.
Screen shots of Vodafone live!
web pages featuring mobile
advertising in Germany.
Supplier assessment
and qualification
process
Six pillars of
Supplier Performance
Management
Potential Suppliers
Approved
Vodafone
Supplier
Registration
Self assessment
Qualification
Corporate
Responsibility
Financial
Stability
Technology
Portfolio
Commercial Delivery
Capability
Quality
Management
20 Vodafone Group Plc Corporate Responsibility Report 2007
CR in our supply chain
Material developments:
Supplier qualifi cation: CR has been incorporated into our
consistent Group-wide process for qualifying new suppliers to
Vodafone.
Industry approach: A common approach to CR supply chain
management is being developed across the industry through
GeSI and EICC initiatives.
NGO reports published this year highlighted cases of poor
conditions in the electronics industry supply chain.
‘Speak up’ programme launched to provide suppliers and
Vodafone employees working in our supply chain with a means
to report ethical concerns.
Supply chain organisation: Merged local operating company
and Group supply chain management teams into a global supply
chain organisation.
Further information:
www.vodafone.com/responsibility/supplychain
Code of Ethical Purchasing
Self assessment questionnaire and risk assessment tool
Details of training for supply chain managers
Summary of industry supply chain activities
Vodafone supply chain CR timeline
•
•
•
•
•
•
•
•
•
•
We believe that a consistent message from all buyers of ICT equipment is
needed to persuade suppliers that acceptable labour and environmental
standards are essential to do business with major companies. This applies
across Vodafone where we have introduced an aligned approach to engaging
with suppliers in all our local operating companies. It also applies across
the ICT industry where we are working to establish a common approach
through industry forums.
We do not manufacture anything ourselves, but we spend more than
£20 billion on purchasing products and services. We source equipment for
our networks, and the handsets we sell, from third-party manufacturers who
themselves source components and assembled products from other suppliers.
The electronics supply chain has many interwoven tiers. We also source
services from companies around the world.
Our Code of Ethical Purchasing (CEP) sets out our expectations of all
suppliers. For new suppliers, this is implemented by our new supplier
qualifi cation system that ensures our CR expectations are made clear from
the fi rst point of contact a supplier has with Vodafone. Existing suppliers are
already aware of these expectations.
Our strategy is to engage directly with our fi rst-tier suppliers, emphasising
their need to engage with their own suppliers in a similar way. Since we do
not have a contractual relationship with sub-tier suppliers, we believe that
engagement with these companies should be through our fi rst-tier suppliers.
We are working to extend our infl uence further into our supply chain as follows:
We are encouraging our strategic suppliers to have their own supplier
engagement programmes and have conducted a number of site assessments
of sub-tier suppliers alongside our direct suppliers.
We are working with major companies representing a number of different
tiers within the ICT supply chain, to develop a common approach to supplier
assessments.
During the 2008 fi nancial year, we will establish partnership projects with
two key Chinese suppliers to work together to engage with our sub-tier
suppliers.
We understand concerns relating to standards in the ICT industry supply
chain. Several NGO reports were published during the year highlighting
instances of unacceptable labour, health and safety and environmental practice
in the electronics supply chain (see box, top right). We discussed the potential
implications of these reports with the relevant fi rst-tier suppliers. In any cases
involving companies in our supply chain we seek further information to
understand and resolve specifi c issues.
As the industry gains experience of supply-chain engagement, we have
learned that audits alone are often not suffi cient. Suppliers can too easily make
temporary improvements without the necessary management system changes
needed to embed the improved practices. This results in the same problems
recurring later. To achieve sustainable improvements, we are helping supplier
companies build their capability and commitment. We are addressing this
through our own programme and joint industry activities.
We said
We would implement the supplier qualifi cation process by March 2007.
We would complete a second stage of 10 site evaluations of global suppliers
by March 2007.
We would put in place a whistle-blowing mechanism for suppliers to support
the implementation of the Code of Ethical Purchasing by March 2007.
We would continue to work with other major ICT companies to develop a
common approach to supplier assessments by March 2007.
We have
Implemented our supplier qualifi cation process in all local
operating companies
When a new company applies to supply Vodafone the company must provide
information that we need to complete a risk assessment. If Vodafone is
interested in progressing the supplier to the next stage, the results of the risk
assessment determine whether the supplier is required to complete a self
assessment and, in some cases, a site qualifi cation assessment. Only after these
have been satisfactorily completed can the company qualify as a Vodafone
supplier (see diagram, left).
•
•
•
•
•
•
•
Vodafone’s supplier qualifi cation process
Vodafone Group Plc Corporate Responsibility Report 2007 21
During the 2007 fi nancial year, a common supplier qualifi cation process was
rolled out to our Group purchasing function and across all our operating
companies.
Promoted continuous improvement with many of our largest suppliers
through our supplier scorecard
In the 2007 fi nancial year, 290 suppliers, including all strategic global suppliers,
were assessed using a performance scorecard. CR criteria account for 10%
of the total score. The scorecard evaluates the supplier’s CR management
systems, public CR reporting and approach to managing CR in its own supply
chain. Vodafone’s supply chain teams review the scores and request supporting
evidence from the supplier’s account manager, usually at half-yearly intervals.
Undertaken 17 site evaluations
This exceeds our commitment to complete 10 on-site CR evaluations and
completes our original three-year commitment of conducting 25 site
evaluations of global suppliers – a total of 36 have been completed. Over half
of this year’s assessments were completed as part of our supplier qualifi cation
process. We conducted over 65% of these evaluations in Asia, following risk-
assessments. The evaluations included four handset and network equipment
recycling suppliers, three infrastructure suppliers, three software providers,
six handset suppliers (including two sub-tier suppliers in conjunction with the
fi rst-tier suppliers responsible) and one battery supplier. We made a total of
58 recommendations for improvement (see box, left).
One potential supplier candidate failed to reach the criteria required to
supply Vodafone for a number of reasons, including multiple non-conformances
with our CEP. The site audit was suspended within two hours and the team’s
efforts refocused on briefi ng the supplier management team on Vodafone’s
CEP and quality requirements. The supplier will not be approved until sustained
improvements are made and verifi ed.
Established a whistle-blowing mechanism to encourage reporting
of any unethical behaviour by Vodafone or its suppliers
We launched our ‘Speak Up’ programme to provide suppliers and Vodafone
employees working in our supply chain with a means of reporting any
ethical concerns.
The programme provides two alternative routes for raising issues: either by
contacting Vodafone’s Group Fraud Risk & Security Department directly or via
a third-party confi dential telephone hotline service. The line is available 24/7.
All calls are taken by an independent organisation with staff trained to handle
calls of this nature. Vodafone is committed to completing a timely investigation,
follow-up and resolution of all issues reported. Less than 10 incidents have
been reported to date, all of which have been investigated and resolved.
Continued working with other ICT companies to establish a common
approach to supplier assessment
Through our membership of the Global e-Sustainability Initiative (GeSI) we
are working to establish a common approach to supplier assessment and
engagement. GeSI is collaborating with the Electronic Industry Code of
Conduct Implementation Group (EICC) bringing a total of over 30 major ICT
companies into the initiative. The objective is the development and deployment
of a consistent set of tools and processes for improving supply chain CR
performance across the ICT sector (see box for details on progress this year).
We will
Implement a project with two strategic Chinese suppliers to manage
CR risk within our sub-tier suppliers by March 2008.
Enhance our CR programme and capability within the China region
through our recently established China based supply chain offi ces
by March 2008.
Achieve 100% follow up within three months for all local and global
suppliers identifi ed as high risk during qualifi cation by March 2008.
Maintain levels of training for supply chain managers to ensure that
more than 90% have received CR training.
Incorporate the ICT industry common tools and approach within
Vodafone’s programme by March 2008.
•
•
•
•
•
NGO reports
Several NGO reports published during the year highlighted
instances of unacceptable labour, health and safety, and
environmental practice in the electronics supply chain.
Two signifi cant reports were those by an NGO based in Hong
Kong, SACOM (Students and Scholars against Corporate
Misbehaviour), and Dutch research organisation SOMO
(the Centre for Research of Multi-National Companies).
These highlighted issues such as low wages, involuntary
overtime, lack of unions and the unsafe use of chemicals in
several countries including China, India, Thailand and the
Philippines.
Software Development in India
In addition to our work with manufacturing and recycling suppliers,
we commissioned a CR review with a strategic corporate software
development supplier that has signifi cant operations based in Pune,
India. The review assessed the supplier’s capabilities against Vodafone’s
CEP, local legal requirements, SA8000 and corporate policies.
In partnership with the supplier,
areas for improvement were
identifi ed and, supported by an
independent third party auditor,
improvement recommendations
were defi ned. To increase their
performance and further support
Vodafone’s CEP, the supplier chose
to enhance their management
systems by pursuing ISO14001
and OHSAS18001 compliance
and certifi cations.
Vodafone’s Supplier Performance
Management team has regular
contact with the supplier and is
able to track its development.
This approach has increased the
partnership between the two
companies while ensuring the
supplier’s commitment to
Vodafone’s CEP.
Recommendations for
improvement (RFIs) identifi ed
in site evaluations
Performance Policy
issue only issue
Category No of RFIs identifi ed identifi ed
Child labour 0 – –
Forced labour 2 – ✓
Health & safety 39 ✓ ✓
Freedom of association 1 – ✓
Discrimination 1 – ✓
Disciplinary practices 4 ✓ ✓
Working hours 2 ✓ –
Payment 0 – –
Individual conduct 0 – –
Environment 4 ✓ ✓
Implementation 5 ✓ –
Working with industry –
GeSI and EICC
To date, the work of the joint GeSI and EICC initiative
has developed and piloted:
• A risk assessment tool and methodology
• A supplier self-assessment questionnaire
• A common auditing approach/methodology.
These and other tools will be available through an
on-line system being launched to facilitate the
effi cient fl ow of information between companies.
The two industry groups have also established a
learning and capability-building work group which
is developing training materials for key audiences
and is participating in a multi-stakeholder capability-
building initiative in China. The initiative is being
managed by the Foreign Investment Advisory Service
(FIAS) (a joint initiative of the World Bank and IFC)
with project partners GeSI, EICC, Business for Social
Responsibility, the Municipal Government of
Shenzhen, Shenzhen Electronics Industry Association
and the Chinese National Government. The aim is to
create a capability-building strategy for the ICT sector
in China that addresses the main obstacles to
improving CR performance.
European Leaders in
Procurement Awards 2007
Vodafone received the 2007 European Leaders in
Procurement Award for Corporate Responsibility in
recognition of our emphasis on CR within our global
supplier performance management programme. The
European Leaders in Procurement are a network of
senior procurement professionals seeking to innovate
and share best practice throughout Europe. The award
for CR recognises outstanding procurement initiative
covering social and environmental issues; including
ethical sourcing, green procurement and supplier diversity. The award
covers Vodafone’s work on supply chain management during 2006,
including stakeholder engagement, the implementation of our CEP at
Group level and in our local operating companies, and our participation
in industry initiatives such as the GeSI.
0
200
400
600
800
1000
1200
1400
Total CO
2
emissions
(ktonnes CO
2
)
2003/04
2004/05
2005/06
n Network n Offices n Retail n Transport
n
Japan (discontinued operation)
2006/07
03/04 09/1008/0904/05 07/0806/07
700
750
800
850
900
950
1000
1050
1100
1150
1200
0.015
0.020
0.025
0.030
0.035
0.040
0.045
CO
2
emissions from network: past and predicted
Our forecast of the CO
2
emissions from base stations
CO
2
emissions (ktonnes) CO
2
emissions kg/Traffic (MB)
22 Vodafone Group Plc Corporate Responsibility Report 2007
Energy use and climate change
Material developments:
Network carbon dioxide emissions per unit of data
transmitted decreased by 29%.
Total network carbon dioxide emissions decreased
by 12% this year.
Energy targets set by 10 operating companies to help
us meet our Group target.
Global Energy Management Team established to oversee
the implementation of our key energy-saving initiatives.
Worked with suppliers to improve energy effi ciency of new
network equipment by 25%.
Renewable energy use increased by 28%.
Energy audits completed by eight local operating companies
to identify areas for improvement.
Further information:
www.vodafone.com/responsibility/energy
www.vodafone.com/responsibility/environment
Earth Calling: a review of Vodafone’s environmental impacts
by Forum for the Future
Transport
Videoconferencing
Water
•
•
•
•
•
•
•
•
•
•
•
Climate change is widely recognised as the greatest global sustainability
challenge. Its implications are far-reaching for the environment, for people,
and for the global economy – of which Vodafone is a part. Limiting our
contribution to climate change is a priority. Energy use associated with the
operation of our network accounts for more than 80% of the carbon dioxide
emissions from our total energy use. Therefore our main focus is reducing
emissions from our network.
We said
We would reduce network carbon dioxide emissions per unit of
data transmitted by 40% by 2011 (from 2005/06 baseline).
We would work with our suppliers to increase energy effi ciency
of new network equipment by 25% by March 2008 (from 2005/06 baseline).
We have
Reduced our network carbon dioxide emissions per unit of data
transmitted by 29%
Overall, our energy use in the 2007 fi nancial year resulted in a total of 1.23
million tonnes of carbon dioxide emissions, 0.99 million of which were from
energy used in our networks. Total network carbon dioxide emissions have
decreased by 12% this year while the overall data transmission has increased
by 25%. This means we have reduced our network carbon dioxide emissions
per unit of data transmitted by 29%.
Our total energy use was 2,690 GWh, a 0.07% decrease from the previous
year. However, by removing the impact of sales and acquisitions of local
operating companies, our energy use has actually increased by 6%. Energy
plans being implemented by our local operating companies to improve
effi ciency and reduce emissions will help us meet our Group target of a 40%
reduction by 2011.
Begun to implement our energy strategy
Our new Global Energy Management Team is responsible for ensuring our
strategy and targets on energy and climate change are implemented. The
team has developed a set of guidelines to share best practice and help local
operating companies reduce energy use. The main focus is on identifying ways
to improve the energy effi ciency of our network and buildings, and increase use
of renewable energy. Initiatives across the Group include:
Replacing energy-intensive air conditioning units at base station sites with
more energy effi cient systems, such as free cooling (see far right).
Deactivating unused rectifi ers – devices that convert alternating to direct
current at base station sites. This reduced energy use by 110W per site (1-5%
of the total energy consumption at each site) in trials by Vodafone Germany.
Producing an energy-effi ciency toolkit to help local operating companies
assess and improve the energy management of their operations.
Piloting ways to reduce diesel use at trial sites in Egypt and Albania.
Categorising sites to optimise energy usage – for example not all base station
sites require battery backup and active cooling.
Remote monitoring and measurement of energy.
Established energy effi ciency targets in 10 local operating companies
Targets must be approved by local operating company chief executives and
are reviewed by the global energy management team against our Group target.
Eight local operating companies completed energy audits of their operations in
the 2007 fi nancial year and four plan to do so next year.
An energy audit in Hungary, for example, showed Vodafone Hungary is making
good progress against its energy effi ciency targets. Energy use at 40 different
sites was monitored over the year to identify ways to reduce energy use. Around
4,000 unnecessary transceivers were identifi ed – of which 1,300 have already
been removed and the remaining 2,700 have been locked. Steps have been
taken to ensure energy effi ciency is a priority for the technology team.
Worked with suppliers to achieve a 25% increase in energy effi ciency of
new network equipment
The average energy effi ciency of new network equipment across our range of
suppliers has improved by 25.3% from last year, meeting our target a year early.
•
•
•
•
•
•
•
•
0
500 1000 1500 2000 2500 3000
Total network energy used by source
(GWh)
2003/04
2004/05
2005/06
(1)
n Energy from grid n Green energy from grid n Diesel and petrol
n On-site renewables n Other
(1) Figures updated after further analysis of data obtained during the last
financial year
2006/07
Vodafone Group Plc Corporate Responsibility Report 2007 23
The new equipment – power amplifi ers and remote radioheads – has been
implemented at 655 sites in the 2007 fi nancial year and will be used in the
deployment of more base station sites across the Group (see box for details).
Our revised target for March 2008 is to work with suppliers to achieve a 33%
reduction from the 2006 fi nancial year baseline.
Adopted higher standards for air-conditioning equipment
Air-conditioning of base station sites accounts for around a quarter of our
network energy use, offering the biggest potential energy savings in our
established 2G networks. In the 2007 fi nancial year, we introduced a policy to
implement free-cooling as the default option for all new cooling equipment. This
system uses fresh air to cool network equipment, reducing the need for energy-
intensive air-conditioning. Our Group guidelines recommend installing free
cooling boxes that will save around 16,000kWh a year per site. These have been
installed at more than 200 base station sites in Germany, Greece, Ireland and
Spain. In hot countries where active cooling is needed during the day, our
guidelines recommend installing different equipment that enables free cooling
to be used at night. When existing cooling equipment reaches the end of its life,
it will be replaced by more effi cient equipment.
Increased the use of renewable energy by 28%
Renewable energy made up 17% of our total network energy use in the 2007
fi nancial year, up from 12% in 2006. The majority of energy used by our network
is electricity from national grids. We purchase renewable energy from the grid
where practical. Four local operating companies purchased renewable energy
during the 2007 fi nancial year.
We are also implementing on-site renewable energy systems to replace
diesel generators at remote base station sites where grid electricity is not
available. These include solar panels, wind turbines and fuel cells. Different
types of renewable energy are being trialled at different sites across the Group
and best practice is shared through an online database. We are developing a set
of guidelines to help operating companies choose the renewable option best
suited to each site by evaluating a range of criteria such as the size and energy
use of the site, local weather patterns and the availability of grid electricity.
Participated in industry partnerships
Vodafone is a member of the Global e-Sustainability Initiative (GeSI) Climate
Change Working Group. This working group aims to improve the measurement
and reporting of carbon dioxide emissions for GeSI companies. It also explores
opportunities for GeSI companies to help reduce emissions through their
products and services, for example by replacing business travel through
video- and tele-conferences.
Vodafone is also part of both the UK and EU Corporate Leaders Groups on
Climate Change, working in partnership with governments to support
international efforts to reduce greenhouse gas emissions (see page 5).
Consulted with experts on climate change
We organised a workshop in March 2007 for nine experts on climate change –
representing government, NGOs, industry and investors – as part of our series of
Vodafone CR Dialogues (see page 4). Participants welcomed Vodafone’s Group
target to reduce network carbon dioxide emissions per unit of data transmitted
by 40% but suggested that an absolute target would be more effective. They
think Vodafone’s strategy to reduce its own emissions is on the right track but
the Company should also focus on helping its customers reduce their own
emissions. Participants believe that Vodafone is in a position to make a
signifi cant contribution to a low-carbon economy and could demonstrate real
leadership on this. We will use this feedback to inform our strategy on energy
and climate change.
We will
Reduce network carbon dioxide emissions per unit of data transmitted
by 40% by 2011 (from 2005/06 baseline).
Work with our suppliers to further increase energy effi ciency of new
network equipment by a third by March 2008 (from 2005/06 baseline).
•
•
Reducing energy use through new technology
Our work with suppliers to reduce our energy use by improving the energy
effi ciency of network equipment focuses on two key areas – power amplifi ers
and remote radio heads.
Power amplifi ers are the most energy-consuming component
of a 3G base station. In 2004, the average energy effi ciency
of power amplifi er units across our suppliers was around 9%.
This fi gure has been improving gradually, up to 17% in 2006.
Remote radio heads – a system that relocates power amplifi er
units next to the antenna – can reduce energy use by an
average of 40% by preventing energy loss in feeder cables.
In Spain, existing equipment consumes around 925W to
produce a power output at the antenna of around 20W. This has
been replaced with new equipment that uses just over half the
energy (480W) to generate double the power output (40W).
This means an average of 3.9 MWh a year will be saved with
each unit replaced (see chart).
0
3
6
9
12
15
18
Efficiency gains from remote radio heads & improved power amplifiers
in 3G equipment in Spain (% improvement)
2004
2005
2006
0
3
6
9
12
15
18
Efficiency gains from remote radio heads & improved power amplifiers
in 3G equipment in Spain (% improvement)
2004
2005
2006
“Energy management requires urgent
action and there’s a lot of enthusiasm
across the business. The climate change
impact and cost benefi ts make it a top
priority on our agenda. This year we have
implemented initiatives both to reduce
the energy consumption of our current
network equipment and to improve the
effi ciency of new equipment. We have achieved our target
of making our new network equipment 25% more effi cient
and now we are aiming to increase the effi ciency up to 33%.”
Helmut Hoffmann
Global Networks Director and
Head of Global Energy Management Team
Improving energy effi ciency at
Vodafone UK offi ces
Vodafone UK has reduced its energy use by 3% in offi ces in the 2007 fi nancial
year. It was the fi rst local operating company to set a target to reduce total
energy use of current network infrastructure, offi ces and stores by 12.5 % by
March 2009 (from the 2006 fi nancial year baseline).
An energy assessment of its operations in the 2007 fi nancial year showed
that offi ces and call centres make up 15% of its total energy use. A number of
relatively simple measures were identifi ed that could signifi cantly improve
energy effi ciency. For example, switching off air conditioning systems and
lighting when offi ce and call centre buildings are not occupied could reduce
energy use in those buildings by as much as 10%. Replacing old lighting
controls and air handling units with more modern equipment can also improve
energy effi ciency.
0
200 400 600 800 1000 1200 1400
n Current local operating companies
n
Japan (discontinued operation)
Number of mobile phones collected
(thousands)
756 534
645 496
799 567
2
003/04
2
004/05
2
005/06
1030
2
006/07
0
50 100 150 200 250 300
Processing of handsets, batteries and accessories
(tonnes)
226 50
217 70 0.2
176 66 2
72 98 3
2
003/04
2
004/05
2
005/06
n Recycled
n Reused n Disposed of
2
006/07
0
20 40 60 80 100
Network equipment waste sent for reuse and recycling
(%)
2003/04
2004/05
2005/06
n Recycled n Reused n Disposed of
2006/07
24 Vodafone Group Plc Corporate Responsibility Report 2007
Reuse and recycling
Material developments:
Handset recycling programmes are in place in all 16 operating
companies to collect used mobile phones for reuse or recycling.
Total handsets collected increased by 28% in the 2007
fi nancial year.
Network waste: 97% of our network waste was recycled in the
2007 fi nancial year.
EU legislation on electrical and electronic equipment (WEEE
and RoHS) came into force in 2006.
Emerging Responsibilities: Vodafone commissioned Forum for
the Future to research how to manage the environmental impact
of end-of-life phones in developing countries.
Further information:
www.vodafone.com/responsibility/recycling
E-waste research by Forum for the Future – full report
Ozone-depleting substances
Paper use
•
•
•
•
•
•
•
•
Mobile technology is rapidly developing. This means handsets and network
equipment quickly become obsolete. Consumers in high-income countries
typically replace their mobile phones every 18 months. New phones with the
latest features often replace old phones that are still in working order. We
encourage consumers to return unwanted phones for reuse or recycling.
Used phones and network equipment that are still in good condition can
be refurbished and sold at reduced cost for reuse in lower-income countries.
This makes use of equipment that could otherwise become waste and increases
access to mobile communications by making modern technology more
affordable. When used network equipment or a returned handset cannot be
refurbished, it is broken down into component parts for recycling. Potentially
hazardous waste from this equipment, particularly from lead acid batteries in
base station sites, is recycled. Components containing hazardous materials
that cannot yet be recycled, such as beryllium oxide, are stored safely by our
recycling partners while ways to recycle them are investigated.
Vodafone is in a good position to collect used handsets through our
relationship with customers and network of retail outlets, although many other
organisations also collect them. All our operating companies have handset
recycling programmes in place. The success of these programmes is dependent
on consumers handing in their used mobile phones. Only a small proportion
is currently returned directly to us, around 3% of total sales. Our research
suggests that many people are either reluctant to part with their old phones
or do so through a variety of other channels such as donating them to charity
collection schemes or selling them over the internet.
We said
We would increase the number of phones collected for reuse and recycling
by 50% by March 2007 (from the 2004/05 baseline).
We would support development of programmes in at least three developing
countries to repair, reuse and recycle mobile phones by March 2007.
We would send for reuse and recycling 95% of network equipment waste
during the 2007 fi nancial year.
We would have return schemes in all our operating companies by
March 2007.
We have
Achieved our target of increasing by 50% the number of phones collected
for reuse and recycling from the 2004/05 baseline
We collected 1.03 million handsets for reuse and recycling in the 2007 fi nancial
year, an increase of 59% from 2005. This exceeded our challenging target of
a 50% increase from the 2004/05 baseline (excluding the fi gures from our
operating company in Japan, which was sold).
Promoted handset return among our customers
Our local operating companies have launched a number of high-profi le
campaigns to promote handset recycling this year in an effort to meet the
Group target. They used a range of methods to encourage customers to return
handsets including raising awareness of recycling programmes, introducing
incentives to return phones and making collection of handsets easier through
prepaid envelopes to send by post and prominent collection points in stores.
For example, Vodafone Portugal distributed environmental awareness
leafl ets in stores, published material on its website and included information
about handset recycling on customer bills. As part of the campaign, Vodafone
Portugal promoted handset recycling at 12 shopping centres around the
country in February 2007 in partnership with environmental organisation
Quercus. The campaign takes a fun approach through entertaining displays
and a specially designed ‘EcoJogo’ game to raise awareness.
Both Vodafone UK and Vodafone Germany offer a donation to charity for
every handset collected as an incentive for customers to return their mobile
phones. Vodafone UK partnered with the National Autistic Society for the third
year, donating all proceeds from handset recycling. Vodafone Germany raised
over €350,000 for charities and collected over 100,000 handsets for recycling
in the 2007 fi nancial year.
Introduced a new recycling programme in Romania
The programme – the fi rst of its kind in Romania – was launched in March 2007
with collection points and campaign materials available at all Vodafone stores
•
•
•
•
Vodafone Group Plc Corporate Responsibility Report 2007 25
in Romania. Anyone with a used mobile phone or accessories, whether a
Vodafone customer or not, is encouraged to deposit it for recycling at one of
our collection points. Collected phones will be sent to Fonebak to be tested
and then either refurbished for reuse or dismantled for recycling. Vodafone
employees in Romania collected around 1,000 handsets in a week as part of
an internal campaign to encourage handset recycling.
Supported recycling programmes in three emerging markets
Emerging and developing countries often lack the skills and infrastructure
to handle handset waste responsibly. We have established handset recycling
programmes in Albania, Egypt and Romania, meeting our target to support
recycling programmes in three emerging and developing countries.
Forum for the Future has completed its research project – commissioned by
Vodafone – to identify ways to increase capacity for recycling used mobile phones
in developing countries (see box). We will take on board the recommendations
of this study and we will pilot a recycling scheme in Kenya.
Continued to encourage handset recycling among corporate customers
In the 2007 fi nancial year, we collected over 14,000 phones from corporate
customers in eight countries – Australia, Germany, the Netherlands, New Zealand,
Portugal, Romania, Spain and the UK. We provide return bins and freepost
envelopes for corporate customers and encourage them to raise awareness
among their own employees about the benefi ts of recycling handsets.
Audited our recycling suppliers
In the 2007 fi nancial year, we conducted detailed environmental audits of three
of the companies that recycle our used network equipment and the handsets
we collect from customers. These audits focused specifi cally on the suppliers’
environmental credentials in addition to site evaluations as part of our general
supply-chain management (see pages 20 and 21 for more details). Five
operating companies also assessed their local recycling suppliers.
Developed industry guidelines on handset recycling through the Mobile
Phone Partnership Initiative (MPPI)
Vodafone participates in the MPPI, part of the UN Basel Convention, which brings
together mobile phone companies, waste and recycling experts, and NGOs.
Guidelines have been developed on the following key areas: collection and
refurbishment of used mobile phones, material recovery and recycling of
end-of-life mobile phones, and the transboundary movement of collected
phones. The guidelines have now been fi nalised and are available at:
www.basel.int/industry/mppi.html.
Ensured we are in compliance with new European legislation in all
operating companies where it applies
New European legislation on electronic waste came into force in several
countries during the 2007 fi nancial year. We do not manufacture mobile phones
or network equipment but we encourage suppliers to design handsets that are
easier to recycle and made from environmentally preferable materials. This
year, we have worked with our suppliers to ensure substances prohibited by
the Restriction of the Use of Certain Hazardous Substances in Electrical and
Electronic Equipment (RoHS) Directive are phased out. The Waste Electronic
and Electrical Equipment (WEEE) Directive requires companies to take back
and recycle used electronic and electrical equipment.
Reused or recycled 97% of network equipment waste
We produced 9,959 tonnes of network equipment waste in the 2007 fi nancial
year. Of this, 9,675 tonnes (97%) were sent for reuse or recycling, exceeding our
target of 95%. This included 1,739 tonnes of non-hazardous waste (such as radio
equipment, metal and cables) and 8,220 tonnes of hazardous waste (mostly
lead acid batteries). The overall increase in hazardous waste this year is due
to Vodafone Albania fi nding an environmentally sound solution for recycling
its hazardous waste, which it had previously been storing. All our operating
companies have systems in place for recycling network equipment.
We will
Collect a further million handsets by March 2008.
Pilot a recycling scheme in Kenya, as part of our commitment to
increase capacity for recycling in emerging economies.
Send for reuse and recycling 95% of network equipment waste during
the year to March 2008.
•
•
•
‘Waste has many
forms’ was the theme
used by Vodafone
Romania in their
campaign to raise
recycling awareness
among its customers.
Online campaign in
the UK to raise
business customers’
awareness of handset
recycling.
Managing environmental impacts of end-of-life
mobiles in developing countries
Access to mobile communications in developing countries can bring signifi cant
socio-economic benefi ts. But the rapid growth of the mobile market means that
for the fi rst time these countries will have a signifi cant quantity of old handsets
to dispose of. In 2006, Vodafone commissioned Forum for the Future to carry out
an extensive study to examine how to manage the end-of-life cycle of mobile
phones in developing countries. In contrast to most developed countries, there
are often no recycling facilities to deal with this electronic waste.
The study – based on research in Kenya, Nigeria, Tanzania and South Africa –
revealed that there is little awareness of the problems of electronic waste
in Africa. Developing effective recycling and disposal facilities for mobiles in
Africa could bring huge environmental and social benefi ts as well as sustainable
job opportunities.
In Kenya, the study found there is a major informal repair market and this, not
consumers, is the main source of phone waste. In developing countries generally
people will repair and re-use their mobiles, rather than throwing such valuable
items away. The repair businesses are a major source of electronic waste as some
components cannot be reused. To be effective, any recycling scheme must be
designed to obtain the waste from small recycling businesses rather than
directly from consumers (as is typical in developed countries).
Example of
communications
material from
Vodafone’s Portugal
recycling campaign.
E
mployees by region
000
000
000
Spain
3,953
Germany
15,339
It al y
9,029
Rest of Europe
8,771
EMA PA
11,500
UK
11,317
26 Vodafone Group Plc Corporate Responsibility Report 2007
Employees
Material developments:
New people strategy launched covering six key areas of people
management.
Development: 51% of our employees had an annual performance
dialogue in the 2007 fi nancial year.
Restructuring as a result of changes in the business led to 2,186
employees (3.6% of the workforce) being made redundant this
year.
Employee survey showed 80% of employees surveyed are proud
to work for Vodafone.
Diversity: The proportion of women in top management (bands
A to D) decreased by 1% and in senior management (bands A to E)
increased by 3%.
Health and safety: The number of work-related lost-time
accidents regrettably increased by 3.3% this year.
Further information:
www.vodafone.com/responsibility/employees
www.vodafone.com/responsibility/healthandsafety
Equal Opportunities Policy
Health and Safety Policy
Business Principles
•
•
•
•
•
•
•
•
•
Vodafone Group employs approximately 60,000 people around the world.
Our goal is to recruit and retain the most talented and motivated people in
order to build the best Vodafone team. We aim to do this by providing an
inclusive working environment, promoting wellbeing, treating people with
respect, encouraging employee involvement, and offering attractive
incentives and opportunities.
We introduced a new global people strategy in the 2007 fi nancial year.
This aims to increase employee involvement by setting out a clear statement
of our commitments to employees and our expectations of them. The strategy
focuses on six key areas: organisation and change; resourcing; communication
and involvement; learning and development; reward and recognition; and
health, safety and wellbeing.
This strategy, together with our Group employment policies, sets out a global
framework for employee engagement. Our employee policies are consistent
with the UN Universal Declaration of Human Rights and the International
Labour Organization’s Core Conventions. How operating companies implement
these policies and strategy is managed locally to a great extent. This allows
individual operating companies to adapt to local cultural differences and legal
requirements. Many operating companies also have their own human resources
management systems, established prior to joining the Group as acquisitions.
We said
We would ensure that every employee in the business has an annual
performance dialogue and development discussion with their line manager
by March 2007.
We would continue to deliver a Pride in Vodafone score (in the employee
survey) that will at least equal the high performance norm of the ‘World’s
Most Admired Companies’ survey by March 2007.
We would reduce work-related accidents resulting in lost time by 10% by
March 2008 (from the 2005/06 baseline).
We have
Enabled 51% of our employees to complete a performance dialogue
We introduced our global performance dialogue process in the 2006 fi nancial
year to enable our people to review their performance annually and set clear
goals and development plans for the year ahead. All our employees are required
to complete an annual performance dialogue, but our global system for
tracking this is not yet being used effectively across the Group, where many
local operating companies had existing local systems in place. Approximately
51% of our employees used this system to record their performance dialogue in
the 2007 fi nancial year. We plan to ensure all our operating companies
systematically record this information next year.
We provided approximately 287,000 training days – equivalent to fi ve days
training per employee – in the 2007 fi nancial year. We spent approximately
£29 million on training (based on data covering 91% of our employees). We offer
a range of global training and development programmes to help our employees
achieve their full potential. Our emphasis is on web-based training courses with
online ‘academies’ providing training on specifi c aspects of the business. This
year we launched a new academy on customer management.
In the 2007 fi nancial year, we created a new set of programmes to emphasise
the role of local operating companies in tailoring leadership development to
individual needs. This builds on and replaces our existing Global Leadership
Programme for high potential middle managers.
Continued to engage with employees
In the 2007 fi nancial year, we conducted two ‘Pulse’ surveys covering around
30% of employees to provide feedback on our progress. A total of approximately
18,000 employees in 15 operating companies took part. The combined results
of the two surveys found that 80% are proud to work for Vodafone, an increase
from 78% in the 2005 full employee survey. This is equal to the high
performance norm of the ‘World’s Most Admired Companies’ survey, meeting
our target. Of those surveyed, 71% rated Vodafone positively for being ethical
in its business dealings, down from 75% in 2005. Other feedback from the Pulse
surveys showed that both wellbeing and rewards remain areas for improvement,
with related questions receiving positive responses from 41% and 44% of
employees respectively (see table).
•
•
•
Key data
2006/07 2005/06
Total number of employees 59,909 55,110
Part-time employees 8,186 8,266
Employee changes
Number of voluntary leavers 6,367 4,364
Number of involuntary leavers 2,186 2,297
Number of newly hired employees 9,470 7,292
Average turnover rate (%) 10.6 12.1
Employee survey
Question 2006 2005 Full
(% employees responding positively) Pulse survey employee survey*
I am proud to work for Vodafone 80 78
I am rewarded fairly for the work that I do 44 42
Rate your Operating Company/Group Function
on taking a genuine interest in the well-being
of its employees
41 42
Rate Vodafone on being ethical in its business dealings 71 75
* The results of the 2005 survey have been restated to exclude operating companies in
Japan and Sweden that have since been sold. The 2006 survey results exclude Arcor,
and include Romania and Czech Republic.
This year, all data in the employees section includes Arcor, our fi xed line business
in Germany, with the exception of data relating to employee surveys, diversity and
performance dialogues.
0
5
10 15
(1) Bands A-D. Figures vary each year (approximately top 200-250)
Women in top senior management roles
(1)
(%)
13
12
11
2004/05
2005/06
2006/07
0
5
10 15
20
Women in senior management roles
(2)
(%)
2004/05
2005/06
2006/07
10
17
20
(2) Bands A-E. Figures vary each year (approximately top 1,100-1,300)
Note: Diversity data excludes Arcor
0
200 400 600
0
1
2
3
4
5
67
Average training spend per employees (£)
550
530
2005/06
2006/07
Average training days per employee
5
5
2005/06
2006/07
0 50 100 150 200
0
1
2
3
4
5
6
7
Work-related lost-time accidents
190
3.2
163
2.8
151*
2.4
156
2.6
2003/04
2004/05
2005/06
(1)
2006/07
(2)
n
n
n Total number of work-related lost-time accidents
n Work-related accidents rate (per 1,000 employees)
(1) From 05/06 data includes Arcor. The 05/06 data has been re-stated accordingly
(2) From 06/07 data includes new LOCs Romania and Czech Republic and excludes
discountinued operations
Vodafone Group Plc Corporate Responsibility Report 2007 27
From next year, we plan to conduct a full employee survey and an interim
Pulse survey covering around 20% of our employees annually. We have set a
target to improve employee engagement, measured against an engagement
index based on six questions from the employee survey.
We also consulted with employees in a range of other ways at team, local
operating company and Group level. A series of Talkabout sessions across the
Group enabled employees to discuss issues that are important to them with
senior members of the Group, including Chief Executive Arun Sarin. The
Vodafone European Employee Consultative Council also met four times
in the 2007 fi nancial year (see box).
All Vodafone employees have the right to join trade unions and other outside
representative organisations. Our local operating companies take responsibility
for negotiating with recognised unions as necessary and where national
legislation permits.
Continued to track diversity across the Group
We believe that diversity in our workforce is an asset to our business, refl ecting
the wide range of nationalities and cultures represented by our customers
around the world. Twenty nationalities are represented in our top management
(bands A-D, approximately the top 204 employees), an increase from 18 last
year. We encourage our managers to gain experience of working in different
countries through our global rotation programme (see quotes, left). Almost
half our senior managers have international experience.
The percentage of women in top senior management roles decreased from
12% last year to 11% in the fi nancial year 2007. However, the percentage of
women at all senior management levels increased to 20% this year from 17% in
the 2006 fi nancial year (see chart). The overall percentage of women in senior
and middle management levels (bands A-F, approximately 4,300 employees)
was 25%, a 4% increase from last year. We have developed a strategy to improve
diversity, focused on how to increase the number of women in management.
A survey of female employees in May 2007 will be used to inform this strategy.
Consulted with employees on the rewards and benefi ts we offer
Vodafone must provide competitive and fair rates of pay and benefi ts to attract
and reward the best employees. Competitive rates vary in each local market
where we operate.
We assess the compensation packages we offer by asking our employees
directly for their views. In the Pulse surveys conducted in the 2007 fi nancial year,
44% of employees responded positively to the question ‘I am rewarded fairly for
the work that I do’. This is a 2% increase from the 2005 full employee survey. We
are responding to this feedback by gradually introducing measures to reward
performance across the Group. In Ireland, for example, the percentage of positive
responses to this survey question improved from 32% in May to 49% in October
following consultation with employees to develop a new rewards system focused
on rewarding performance among other incentives.
Vodafone encourages employee share ownership through our AllShares
programme. In the 2007 fi nancial year, we gave 340 shares each to all eligible
employees across the Group. Employees now have interests in over 820 million
shares. Vodafone won a Global Equity Organisation award for best share plan
communications in 2006 for the second year running. We provide a number of
pension plans through defi ned benefi t and defi ned contribution arrangements.
Further information is available in our Annual Report for the year ended
31 March 2007, available at www.vodafone.com.
Helped our employees deal with business restructuring
In the 2007 fi nancial year there were 2,186 involuntary leavers and 6,367
voluntary leavers across the Group. The average Group turnover rate was 10.6%.
Changes in the business resulted in signifi cant reorganisation within Group
functions and in several operating companies in the 2007 fi nancial year.
We are in the process of outsourcing IT application, development and
maintenance across the Group. The fi rst phase of this outsourcing affected
approximately 1,600 employees and contractors in the Czech Republic, Spain
and the UK (of whom around 58% were employees and 42% were contractors).
Following extensive consultation with employees, unions and the Vodafone
European Employee Consultative Council, all these employees transferred in
February 2007 to the partners that will be doing the work. Approximately 5,000
further employees and contractors will be affected in a similar way as IT
outsourcing continues in the 2008 fi nancial year, but this is not expected to
result in any compulsory redundancies for Vodafone employees.
“I went to the UK to work with the global Supply Chain
team to audit potential new global suppliers. This
gave me a chance to work in a new area from a global
perspective and with other local operating companies.”
Carlos Marin went from Spain to the UK
Diversity in senior management
Training
Vodafone European Employee Consultative Council
Employee representatives from local operating companies within the European Union have
an opportunity to raise any concerns with the executive management team at the Vodafone
European Employee Consultative Council (EECC). The main issues discussed at the EECC in the
2007 fi nancial year were the new regional organisation of the Company (now divided between
Europe and EMAPA), Vodafone’s strategic objectives and restructuring. Employees were
particularly concerned about the outsourcing of IT maintenance and development and the
consequences for affected employees. We responded to these concerns by emphasising that
such changes in our business are necessary to remain a successful company. Two additional
meetings were arranged to increase consultation on this issue. We committed to secure new
jobs for employees affected by outsourcing through contractual agreements with the company
that takes over the work where possible (see right and page 28).
“My placement in Germany allowed me to experience
a completely different business culture. Learning how
to deal with cross-cultural differences really made
me grow as a person. I picked up some great tips and
improved my business knowledge.”
Ana Domingos went from Portugal to Germany
“The Finance Academy has proved
to be an excellent initiative that has
not only helped develop important
functional skills and capabilities,
but has also helped create a much
greater sense of community across
the global Finance team.”
Margherita Della Valle CFO Europe
Global rotation programme
Health and safety
000
000
000
Other
5
Handset/chargecard
theft
11
Theft of other hardware
2
Calling abuse
3
Internal
f
raud by type
(above €5,000)
Internal fraud by type
(under €5,000)
000
000
000
Manipul ation of
customer account
133
Procurement fraud
1
Payrol l fraud
1
Other internal fraud
24
Theft of monies/ass ets
201
Technical fraud
3
Contractor fraud
34
Theft or manipulation
of data
23
Financial fraud
4
28 Vodafone Group Plc Corporate Responsibility Report 2007
Employees continued Ethics
Vodafone’s success is underpinned by our commitment to sound business
conduct and the way we interact with our key stakeholders (shareholders,
employees, customers, business partners and suppliers, government and
regulators, communities and society, and the environment).
Our Business Principles defi ne how we intend to conduct our business and
our relationships with stakeholders. They require employees to act with
honesty, integrity and fairness. The principles cover ethical issues, including:
bribery and corruption, confl icts of interest, data protection, environment,
health and safety, human rights, political contributions and lobbying, and
transparency. The full text of the Business Principles is available at
www.vodafone.com/responsibility/businessprinciples.
Our Business Principles set a policy of zero tolerance on bribery and
corruption and require all employees to comply with all applicable anti-
corruption laws and regulations. One case of alleged corruption was reported
in the 2007 fi nancial year and is currently under criminal investigation.
The Business Principles are included in induction material, training
and team briefi ngs. Employees can report any potential violations of the
principles to their line manager or local human resources manager in the
fi rst instance. Alternatively, they can raise concerns anonymously to our Group
Audit Director or our Group Human Resources Director, via our global intranet.
During the year we drafted a Duty to Report policy, to be rolled out next year,
to ensure all employees are aware of their obligation to report any suspected
incidents of dishonesty, fi nancial malpractice, illegal activity or breach of
Vodafone’s Business Principles or policies. Our ‘Speak Up’ programme –
introduced this year – encourages suppliers to report incidents via an anonymous
third-party reporting hotline (see page 21). We will extend the Speak Up
programme to all our employees in the next fi nancial year, building on our
existing whistle-blowing mechanism, as part of the Duty of Report policy.
A total of 445 reported cases of breaches of ethics, internal fraud or other
internal dishonesty resulted in disciplinary action or dismissal of employees
or contractors in the 2007 fi nancial year. Of these 445 cases, 424 related to
incidents of fraud below the value of €5,000. The remaining 21 disciplinary
cases related to 15 incidents of fraud exceeding €5,000. The majority of
these incidents related to theft of handsets, SIM cards and other equipment.
We plan to introduce a security awareness training programme for all
employees in the 2008 fi nancial year and we have appointed a Group
Security Awareness Advisor to oversee this programme. An important part of
this new role will be to promote the programme internally to all employees,
specifi cally raising their awareness of ethical issues via an e-learning tool,
based on a new ‘security portal’ within the Vodafone global intranet.
Further information:
www.vodafone.com/responsibility/ethics
Vodafone Germany announced a restructuring programme in March 2006
with 450 of its 1,060 full-time employees in network deployment units made
redundant. Through continual open dialogue with employees and works
councils, Vodafone Germany set up initiatives to help affected employees fi nd a
new job within the business resulting in 212 of those affected being redeployed.
A further 185 accepted voluntary redundancy with outplacement support,
44 took early retirement and the remaining nine were made redundant.
Approximately 100 people were redeployed as a result of reorganisation
within central Group functions in the 2007 fi nancial year and a further 350
people were made redundant. All those affected were offered independent
counselling and outplacement support.
Suffered a regrettable 3.3% increase in work-related lost-time accidents
The number of work-related accidents resulting in lost time increased to 156 in
the 2007 fi nancial year, compared with 151 the previous year. This is in part due
to improved reporting processes in our existing operating companies and
greater emphasis on incident reporting in our newer local operating companies.
There were no fatalities in the 2007 fi nancial year. This is the fi rst time in
six years, since the implementation of Vodafone’s global reporting process,
that we have achieved this important goal. This has been possible thanks to our
global focus on managing contractors as a result of fatal incidents associated
with network deployment activities in previous years.
We have launched an online auditing system for Health, Safety and Wellbeing
Management across the Group. The tool is linked to our Group policies and
standards and is consistent with the occupational health and safety standard
OHSAS 18001.
We also introduced a system this year to ensure signifi cant health and safety
incidents are reported quickly throughout the Group. The new system requires
every signifi cant event, such as a fatality or serious accident, to be reported
within 24 hours to local operating company executives and the Group health
and safety team. A full investigation is undertaken into the causes of the
incident and key fi ndings are circulated across the Group to help prevent a
similar incident elsewhere. In the 2007 fi nancial year, eight signifi cant incidents
were reported using this system. This system will be integrated with our online
reporting system in the 2008 fi nancial year.
In addition to work-related lost-time accidents, we are beginning to track data
on absence due to sickness and stress as a key performance indicator for our
wellbeing initiatives, which we will begin reporting next year. Of the employees
surveyed in 2006, 41% feel their operating company or Group function takes a
genuine interest in their wellbeing, down from 42% in the 2005 full survey. We are
continuing to develop a wellbeing framework as part of our global people strategy.
We will
Ensure that 75% of our operating companies deliver top quartile
employee engagement scores within their local markets by March 2009.
Ensure that 90% of employees in the business have an annual
performance dialogue and development discussion with their line
manager by March 2009.
Reduce work-related accidents resulting in lost time by 10% by
March 2009 (from the 2006 fi nancial year baseline).
•
•
•
Vodafone Group Plc Corporate Responsibility Report 2007 29
Public policy and tax
Public policy
Vodafone engages with regulators and governments on a number of issues
relevant to our industry as well as issues of broad public interest. Public policy
engagement takes place within local operating companies and at Group level.
The public policy agenda differs in detail between countries, depending on the
local context.
The main areas relevant to our industry on which Vodafone engaged with
regulators and governments in the 2007 fi nancial year are international
roaming, call termination, spectrum, universal service, privacy and data
security. Many of our written submissions are made public by the government
organisation to which they are submitted. Our public policy activities are
consistent with the views set out in this report. Vodafone believes in
transparency in government relations and is willing to provide copies of any
formal submissions in the public domain to regulators and governments on
request to [email protected].
We work with key industry trade associations on public policy issues.
Vodafone is a member of the GSMA/GSME, the International
Telecommunication Union and the World Economic Forum.
Vodafone also seeks to support governments in their objectives on a number
of issues relevant to broader public interest. These include jobs, innovation and
prosperity, public service delivery and effectiveness, national and public security.
We are extending our engagement to focus on a wider range of issues, such as
climate change and the environment, content standards, global poverty and
social exclusion. This year, we have begun to develop a programme to increase
engagement activity in all local markets to increase our public participation.
Our Public Policy Principles state that Vodafone does not make political
donations and, in line with this policy, none were made in this fi nancial year.
Our Annual Report for the year ending 31 March 2007
is available at:
www.vodafone.com
Corporate governance
Regulatory compliance
Tax
Public policy
•
•
•
•
Vodafone’s Public Policy Principles
The Principles cover political donations, the nature and
disclosure of policy positions, funding of corporate events
to which public offi cials are invited, employee confl icts of
interest, adherence to principles by external advisors and
membership of trade associations.
Vodafone does not make political donations or support
particular party political interests, and does not participate
in public policy activities in which it has no legitimate
business interest.
The Company seeks to inform policymakers, including
government offi cials, legislators and regulators, about the
nature of its business, the mobile industry and the business
environment generally. Vodafone develops policy positions
which explain clearly what outcomes Vodafone seeks from
the public policy process and the rationale.
Extracts from Vodafone’s Tax Code of Conduct
To maximise shareholder value in relation to the taxation consequences of all aspects of the
Group’s business activity:
• within the overall Group strategy;
• in compliance with relevant laws, disclosure requirements and regulations; and
• while protecting Vodafone’s reputation and brand.
“Due consideration will be given to the Group’s reputation, brand and corporate and social
responsibilities when considering tax initiatives, as well as the applicable legal and
fi duciary duties of directors and employees of the Group and will form part of the overall
decision making and risk assessment process.”
“Compliance with all relevant legal disclosure and approval requirements will be adopted
and all information will be clearly presented to the tax authorities or other relevant bodies,
as appropriate. Openness, honesty and transparency will be paramount in all dealings with
the tax authorities and other relevant bodies.”
The full text of the Code is available at
www.vodafone.com/responsibility/policies
Tax
Vodafone paid £2.5 billion in taxes across the countries in which it operates
in the 2007 fi nancial year. We believe it is important to state clearly and
precisely our views on tax in the context of corporate responsibility.
We operate within a clearly defi ned Group Tax Code of Conduct. This sets out
the principles, responsibilities, conduct and approach to working relationships
of all tax professionals working in (and with) Vodafone.
We believe our obligation is to pay the amount of tax legally due and to observe
all applicable rules and regulations in all of the territories in which we operate.
At the same time, we have an obligation to maximise shareholder value and to
manage fi nancial and reputational risk. This includes minimising and controlling
our tax costs. We accept that some may not share this view and believe that
transparency regarding our position is the best policy.
Vodafone’s Group Tax Code of Conduct requires its employees and advisors
to act with integrity and maintain the highest ethical standards in all of its tax
activities. Vodafone does not condone tax evasion (using illegal means to
reduce taxes payable) in any circumstances.
We are committed to transparent and accessible communication to enable
others to understand our tax strategy and the economic impact of taxation on
our business. Vodafone was highly commended by the 2006 Building Public
Trust Awards for its tax reporting in its Group Annual Report for the year ended
31 March 2006.
We aim to build open and honest relationships in our day-to-day interaction
with tax authorities. In the UK, for example, Vodafone is participating in an
initiative launched by Her Majesty’s Revenue & Customs to build relationships
with big companies both at an operational and strategic level. Nonetheless we
recognise that there may be some areas that are not free from doubt or where
differing legal interpretations may be possible. Consequently, situations arise
from time to time where tax authorities may not share our views and may
question our interpretations. Details of ongoing matters can be found in our
Annual Report. These include:
Tax cases referred to the European Court of Justice (ECJ):
This year, Vodafone has been involved in two cases referred to the ECJ. The
ECJ’s advocate general gave his opinion on the fi rst case that supplies of
3G licences did not constitute a taxable supply for VAT purposes. The second
case concerns whether the UK taxation of the profi ts of certain EU (but non-UK)
companies is contrary to fundamental EU freedoms. The ECJ gave its opinion in
a similar case in late 2006, but the Vodafone case is still in progress.
German write-down: Discussions with German tax authorities continue
regarding the valuation and scale of any write-down in respect of the
acquisition costs of Mannesmann in 2000.
Vodafone engages in dialogue with tax authorities on current or future tax
law and for example put forward a business view of potential reforms to interest
deductibility for UK Corporation tax at a workshop held at the Oxford University
Centre for Business Taxation in December 2006. Vodafone has committed
donations to fund the Centre which is dedicated to academic research into the
structure of business taxation and its economic impacts.
Through our tax policy, Vodafone aims to build value for the benefi t of
shareholders and for all our customers and employees and to build mutual
trust and respect with government departments and other stakeholders.
•
•
Total contributions to social projects by region
(£m)
000
000
000
Global
25
Northern Europe
13
Southern
Europe, Middle
East and Asia
35
Asia Pacific
5
UK and Ireland
22
Vodafone Foundations – Area of focus
(%)
000
000
000
Arts and culture
4
Other
10
Education
38
Emergency relief
2
Social welfare
33
Environment
6
Health
6
Economic development
1
30 Vodafone Group Plc Corporate Responsibility Report 2007
Foundations
Developments this year:
Local foundation launched in the Czech Republic, bringing
the total number to 19.
Social investment £43.2 million donated in the 2007
fi nancial year.
Disaster relief partnerships formed with Oxfam and
Télécoms Sans Frontières.
New Vodafone Group Foundation strategy launched around
music and sport.
Further information:
www.vodafonefoundation.com
Mission statement of the Vodafone Group Foundation
Projects supported by the Vodafone Group and local foundations
How to apply for a grant
•
•
•
•
•
•
•
Vodafone is committed to improving quality of life in communities around the
world, particularly in the countries where we operate. We also look for ways our
technology can assist emergency response to disasters.
We channel our charitable donations through the Vodafone Group Foundation
and our network of local foundations. Additional support isprovided with product
and cash donations, technical assistance and employee volunteering.
Our network of 19 local foundations, led by the Vodafone Group Foundation,
enables us to target our support through local initiatives that can make a real
difference. Over 100 managers from our operating companies are trustees of
their local foundations, enabling strong engagement with local communities.
Each foundation is governed to the highest standards, with a professional
grant distribution process and full fi nancial accountability. It is important
to measure the outcome of our grants to ensure they have the greatest
possible impact.
We said
We would launch our new Foundations strategy.
We would further develop best practice in grant making across
the Vodafone Foundations.
We would initiate new partnerships addressing issues of major
international concern.
We have
Launched our new Group Foundation strategy
The trustees have developed a second global theme for the Vodafone Group
Foundation to run alongside the existing commitment on disaster relief and
preparedness. The second global theme will commit funds to projects which
use sport and music as a means to generate healthy and positive living in young
people through education, health and welfare.
Continued to establish local foundations
The launch of a foundation in the Czech Republic in the 2007 fi nancial year
reinforces our commitment to community investment in all countries where
Vodafone has operating companies. This brings the total number of local
foundations to 19 with directly funded projects in a further three countries.
We plan to launch further foundations in the 2008 fi nancial year in Albania,
Greece and Turkey.
Further developed best practice in grant making across the
Vodafone Foundations
In the 2007 fi nancial year, the Vodafone Group Foundation developed and
implemented a new reporting system for the local foundations. The system
requires each local foundation to report to the Group Foundation on fi nancial
matters and provide a progress report on which projects they are funding. This
quarterly reporting process has assisted the trustees of the Vodafone Group
Foundation in their governance of charitable funds.
Donated £43.2 million in money, time and materials across the world
During the 2007 fi nancial year, the Vodafone Group Foundation made
community investments totalling £26.9 million. Around 67% of this went on
grants to our local foundations. The remainder contributed to transnational
projects and global disaster relief. With the support of the Vodafone Group
Foundation and local operating companies, our local foundations distributed
£23.8
million to social, environmental, health and educational programmes in
their respective countries. Vodafone donations of products and services and
employee volunteering in company time totalled an estimated £0.5 million.
•
•
•
Vodafone Group Plc Corporate Responsibility Report 2007 31
Initiated new partnerships to boost worldwide disaster relief efforts
Providing immediate telecommunications assistance is vital in disaster situations
to enable the delivery of food, water, shelter and medical help where it is most
needed. In the 2007 fi nancial year, the Vodafone Group Foundation worked in
partnership with the United Nations Foundation (see box, top left) to make the
latest telecommunications technology available to emergency response
missions worldwide. The Vodafone Group Foundation funded fi ve new rapid
response teams run by Télécoms Sans Frontières, a humanitarian organisation
that deploys rapid response telecommunications teams to disaster areas. The
new teams were deployed in Indonesia, Southern Lebanon and Suriname.
The Vodafone Group Foundation is a member of the Oxfam 365 Alliance,
a new fund that aims to raise £7.9 million a year by establishing long-term
collaboration with corporations. This strategic partnership will help to ensure
resources are available to Oxfam’s aid workers to respond to disasters
immediately, without delays while funds are raised. The Alliance will also
contribute to continued relief efforts in affected areas when media attention
has faded and donations have dried up (see below).
We will
Continue to focus on disaster relief and preparedness as a
fl agship programme of the Vodafone Group Foundation.
Launch a second global fl agship programme by March 2008.
Continue to add new foundations to our established family
of foundations.
•
•
•
“Our partnership with the Vodafone
Group Foundation is the United
Nations Foundation’s largest and
most innovative. It has produced real
results in emergency response
communications and health data
systems – and we look forward to
even more success in making a
difference around the world together.”
Ted Turner
Chairman of the Board,
UN Foundation
Vodafone Italy Foundation
brings creative energy to
juvenile prison
The Vodafone Italy Foundation has
launched a project to give young people at
the Beccaria Juvenile Prison in Milan an
opportunity to show their creative fl air.
Working in collaboration with the
SuoniSonori Association, a group that
provides educational support at the prison,
the Foundation is organising a course in cinema skills. Young people at the prison will
receive training to make their own short fi lm with the help of a well-known Italian fi lm
director. The fi lm will be distributed at a number of fi lm festivals and will be used as
educational material in schools.
Vodafone Italy employees are getting involved in the project by contributing to the
soundtrack for the fi lm. Nine employees were chosen from the 28 who volunteered,
based on their singing and musical talent. Once complete, the group will present their
work at a concert to be held at the prison.
Safaricom
Foundation funds
computers for schools in Kenya
The Safaricom Foundation – an associate of the network of local Vodafone
foundations – donated over eight million Kenyan shillings (almost €90,000)
towards computers for schools in Kenya. The initiative started in 2005 in
partnership with the charity Computer for Schools Kenya. It has already
provided 20 computers each to 30 public secondary schools, providing
access to information technology for over 10,000 students in the North
Eastern, Coast and Rift Valley provinces of Kenya. The funding includes
training in computer skills for teachers. Additional funding will provide
computers for a further 50 schools next year.
Connecting parents
with their babies in
the Netherlands
Premature or ill new-born babies often need to remain in hospital for several weeks after
birth, making it diffi cult for parents to stay with them as much as they would like. The
Vodafone Netherlands Foundation is supporting an initiative by the Catharina Hospital
in Eindhoven to enable parents to see live images of their newborn baby in hospital via
their mobile phone. The service was previously only available from a computer via a
website. The Baby Mobile, launched in January 2007, allows parents to see their baby
from wherever they are.
Supporting Oxfam 365 disaster relief
“This is the fi rst time Oxfam has ever had such a substantial and strategic involvement with a
corporate donor that will help save lives in the world’s worst humanitarian crises. The support
of the Vodafone Group Foundation has been vital to Oxfam’s immediate disaster relief response
and your funds have been used to support our emergency programmes in Angola, Chad,
Philippines and Southern Africa.
Our response needs to be immediate in order to save lives and Vodafone’s long-term commitment
to the 365 Alliance allows us to think and work more strategically. We can improve the timeliness
and predictability of emergency aid, ensuring that more people get the help they need
immediately after a disaster occurs.
We are delighted to have this opportunity to build a relationship with Vodafone over the next
three years, and will be doing all we can to provide excellent communications for your employees
throughout the partnership.”
Barbara Stocking
Director, Oxfam GB
Our Foundations: fi ve years on
The Vodafone Group Foundation celebrated its fi fth birthday in 2007. Since its inception,
Vodafone Group has donated over £100 million to the Vodafone Group Foundation for social
projects around the world.
UK
Spain
US
Group
Czech Republic
Romania
Bharti (India)
2006
Ireland
Fiji
Malta
Netherlands
Egypt
Hungary
Safaricom
(Kenya)
Vodacom
(South Africa)
Germany
Italy
Portugal
Australia
New Zealand
32 Vodafone Group Plc Corporate Responsibility Report 2007
Mobile phones, masts and health
Egypt has become one of the fastest growing markets for mobile services, with rapidly
increasing penetration rates. As mobile services are launched, there has been great
interest concerning the safety of mobile base stations among people living nearby.
Mobile operators are cooperating with the Egyptian Government on this matter,
working with the Ministry of Communications and Information Technology
(represented by the National Telecommunications Institute, and National
Telecommunications Regulatory Authority), the Ministry of Environmental
Affairs and the Ministry of Health.
Following extensive academic and practical research, a national code on responsible
network deployment has been developed in Egypt taking local customs and concerns
into consideration. All mobile operators are committed to follow these guidelines in
the installation of their networks.
Vodafone Egypt does a lot to ensure networks in Egypt conform with health and safety
guidelines, including running seminars to raise public awareness, identifying scientifi c
facts on measuring the radiated power of base stations and ensuring regulatory
guidelines are met. These activities have improved public awareness and one can
notice a decrease in public concern over the last two years.
In future, I would like Vodafone Egypt to
continue and extend its efforts in the
following areas: increasing public awareness,
holding meetings with particular stakeholder
groups and improving cooperation with
governments and NGOs.
Prof. Dr Bahnasy Nossier,
Head of the Network Planning Department
National Telecommunications Institute,
Cairo, Egypt
Supply chain
As fi nal stop sellers of mobile phones to
consumers, mobile network operators such as
Vodafone have a direct responsibility to
improve standards throughout the entire
production chain of the handsets they sell.
The greatest risk of poor labour and
environmental conditions lies at the sub-tier
suppliers that make the parts that go into
mobile phone handsets. Currently, however, companies’ efforts
to improve working and environmental conditions even at their direct
suppliers, much less at the sub-tiers, are insuffi cient. Too often, companies
trust suppliers to monitor themselves for compliance with legal and
sustainability requirements. SOMO’s 2006 research into the mobile phone
manufacturing industry revealed numerous violations of national laws and
international standards for human and workers’ rights in factories where
mobile phones are produced.
Vodafone got a leg up on its competition by developing the Code of Ethical
Purchasing (CEP), which it uses in selecting suppliers. However, although
the CEP mentions issues such as forced labour, safety and health, freedom
of association, and working hours, the code is vague about what is
considered acceptable behaviour from its suppliers with regard to these
issues. In the end, suppliers’ corporate responsibility is given relatively little
weight in Vodafone’s strategic evaluation of suppliers. Furthermore,
Vodafone continues to rely heavily on its direct suppliers to see that its
standards are observed by sub-tier suppliers, but, as SOMO’s research
reveals, this practice is insuffi cient to ensure that standards are met.
Vodafone has begun to show interest in auditing its sub-tier suppliers, and
this should continue and be expanded. However, there is still ample room
for improvement in the monitoring of direct suppliers,
let alone sub-tiers. Vodafone’s auditing and monitoring methods could be
improved by increasing transparency and engaging credible local NGOs
and workers’ organisations to verify monitoring results. Also essential to
improving conditions is the development of an effective complaint
mechanism and remediation process through which grievances from
workers and local communities can be addressed.
Joseph Wilde
Researcher, SOMO (Centre for Research on Multinational Corporations)
Privacy and freedom of expression
Privacy has become an increasingly important issue especially in the context of internet
companies in China for example. The two main human rights issues for companies like Vodafone
are freedom of expression – the act of seeking or imparting information – and user privacy,
whether it be a phone conversation, a text message or an internet site, especially when engaging
in political speech and acts that should be protected by human rights law.
Vodafone is still grappling with how to tackle freedom of expression and privacy issues and is in
the process of developing standards to engage on privacy. The company needs to develop strong,
robust standards and implement them to ensure users are protected. It is important to show that
these policies have teeth once they are in place. This means Vodafone and other companies may
have to stand up to governments to protect free expression and user privacy. Communications
companies are the vehicles for information so it is their responsibility to protect it. Vodafone and
other companies have a real opportunity to set some important standards at this point and it is
crucial that they do so.
Arvind Ganesan,
Director of the Business and Human Rights Program, Human Rights Watch
Views from experts on key issues
We continually challenge ourselves to set higher standards of transparency as
well as improving our performance. As part of our efforts to improve transparency,
we include in our CR Report unedited comments from recognised stakeholders
on our performance in key areas.
This year, we invited seven recognised stakeholders and experts to comment
on some of the biggest challenges Vodafone faces: mobile phones, masts and
health; climate change; privacy; supply chain; access to communications;
content standards; and e-waste.
The stakeholders and experts were chosen according to their area of expertise,
the reputation of their organisation, their independence and the ability to
provide constructive criticism. Each was asked to provide their views on the
status of the issue, Vodafone’s current approach and expectations for the future.
Here we include their unedited comments.
Vodafone Group Plc Corporate Responsibility Report 2007 33
Recycling and e-waste
The chief e-waste streams for Vodafone are network waste and handsets. These are quite different but the key issue for both is the extraction, processing and
disposal of environmentally valuable and volatile materials. Adopting a cradle-to-cradle design and management approach, for example, would help lessen
their impact.
Vodafone recycles around 97% of its network waste and reuses network equipment where possible. Although there may be scope to reduce the use of
environmentally volatile materials and increase the longevity of equipment, in general, Vodafone is doing well on this issue.
However, the rapid obsolescence of handsets is a real issue, particularly in developed countries. Vodafone has handset collection and recycling schemes in
all of its operating companies but the numbers of phones returned are minimal compared with the numbers sold. The company needs to do more to increase
the proportion of handsets returned by customers and Forum for the Future would like to see Vodafone exploring different ways of doing this. For example,
the return of old handsets could form part of contract conditions for an upgrade.
Critically, Vodafone should also address the rapid turnover of mobile phones in developed countries, and encourage
customers to use their phones and accessories for longer. Although phones have a technical lifespan of ten years,
average turnover in the developed world is only 18 months.
Old, unwanted (but working) handsets from developed countries can bring great benefi ts and more affordable
access when reused in developing countries. However, these countries are often ill-equipped to deal with
environmental issues caused when phones become waste at the end of their useful life. Rapid growing mobile
penetration in developing countries and the continuing movement of old handsets from the US and Europe to
Africa and Asia means operators need to urgently address this issue. The work Vodafone and Forum for the Future
are doing aims to tackle this and I’m looking forward to seeing a practical and sustainable solution developed
after the pilot project this year.
Tom Berry
Principal Sustainability Advisor, Forum for the Future
Access to communications
In a fast-moving global economy and in unprecedented technological revolution
the word integration becomes the key concern. How can the poor and the
impoverished become a part of this increasingly interlinked globe? How can we
ensure their accessibility? And more importantly how can this integration be done
in a manner that brings both human and economic development to the poor?
Being a lead agent and contributor in shaping this new era, private sector is
called upon to focus on utilising its capabilities in extending vital goods and
services to the base of the pyramid. The ability of the private sector to come
up with innovations that would help the poor in improving their livelihood at
an affordable price while still making profi t becomes a central equation to
attempts of inclusion targeted towards the base of the pyramid.
Being a pioneer company in realising its social commitments, Vodafone has
accumulated a lot of experience in terms
of developing innovative ideas to ensure
accessibility to both the elderly and
the less privileged. However, still
Vodafone needs to utilize this
experience and target it towards the
base of the pyramid. To
this end, Vodafone needs to utilise
their partnerships on ground with
development institutions and civil
society to better understand the poor
while investing more in R&D to come
up with innovative ideas targeting
this sector.
Mohamed El-Kalla
Project manager, United Nations
Development Programme
Content standards
Technological convergence has opened a vast universe of communication and self-expression through the mobile phone. Raising safety awareness
is a vital issue for all population sectors, calling for up-to-the-minute information and innovative tools to empower and protect. Young people, avid
users of advanced technologies, especially need expert support to navigate these new opportunities safely. Parents and teachers are often unaware
that dangers exist and at a loss when technology-related crises arise. The Insafe network, coordinated by European Schoolnet, strives to raise
awareness, and provide reliable information and open dialogue between generations. Mobile phone providers are vital links in this information chain.
Vodafone has proven a leader in the market and a standard-setter for industry. The quality educational materials it has
produced are important informational resources for a wide variety of target audiences. It has developed a strong reputation
as a trusted source of advice and information, and is playing a key role by contributing to the knowledge-building of
awareness raisers.
As mobile internet is fast becoming an affordable reality with mobile phones offering direct links to services such as social
networking sites, Vodafone should be working with social partners to see that the right safeguards are in place and ensure
a consistent approach throughout Europe. It should be providing greater encouragement to teachers to exploit
the untapped potential of mobile phones in e-learning. Surveys conducted by Insafe show that there is a need for mobile
providers to increase their presence in the fi eld, partnering educational establishments and awareness raisers in
information seminars and workshops addressing youngsters, parent and teachers. Nevertheless it is important that
Vodafone continues its work with safety specialists to develop a range of off-line educational resources for parents,
kids and teachers.
Janice Richardson
Insafe project manager, European Schoolnet
Climate change
In terms of the ICT industry’s approach to tackling climate change, we now see a
shift from a reactive to a proactive approach. Because many ICT companies have
been progressive in addressing their own emissions, they can now look at the
potential of their services to help others reduce theirs. The use of ICT is much
more signifi cant in terms of both positive and negative impacts on climate change.
Looking at the information in this report, Vodafone still seems to be focusing
exclusively on the energy used by its own operations. The Group target to reduce
CO
2
emissions seems reasonable but how does this relate to the use of Vodafone
services? Vodafone needs to shift focus away from reducing its own footprint to
look at how it can help customers use its services to cut their emissions. It should
set targets for strategic ICT applications within its portfolio that can contribute to
reducing CO
2
emissions by its users.
In this, Vodafone will be one actor among
many and needs to create alliances with
others to achieve real gains. Its current
work with industry groups makes a good
start but still tends to be quite reactive.
I want to see a clear strategy of how
Vodafone plans to make money from its
services that tackle climate change. It
needs to get away from seeing climate
change only as a risk and capture the
opportunity to make a positive
contribution to tackling the issue.
Dennis Pamlin
Global Policy Advisor, WWF
34 Vodafone Group Plc Corporate Responsibility Report 2007
About this report Assurance
This is Vodafone’s seventh annual Group CR Report and covers the year ended
31 March 2007. This printed report is primarily aimed at stakeholders with a
particular interest or professional involvement in CR. It is a summary focusing
on the issues we judge to be most material.
Our CR reporting information is also available through various channels
to cater for the needs of different stakeholders. This includes our website
(www.vodafone.com/responsibility), our 11 CR reports from local operating
companies and our CR Dialogues that focus on emerging issues (see
back cover).
Alignment with AA1000
Our approach to CR reporting is aligned with the principles of the AA1000
Assurance Standard: completeness, materiality and responsiveness.
A full explanation on how we comply with these principles is available
at www.vodafone.com/responsibility/AA1000.
Completeness: The way we identify our stakeholders and understand their
views and concerns is outlined on pages 4 and 5. Our CR Dialogue paper on
Stakeholder Engagement describes in detail how we engage with different groups
of stakeholders at Group and local level on CR in general, and on specifi c issues.
Materiality: The issues we consider most material to our business –
identifi ed through extensive stakeholder engagement over the last fi ve years –
are listed on the inside front cover of this report. We have selected the most
material aspects of each issue to include in this printed report. Further
information available on our website is listed in each section.
Responsiveness: Our response to stakeholder feedback on key CR issues is
summarised on the inside front cover of this report. Vodafone’s performance
against commitments is outlined on pages 36-38 along with our targets for the
future. We have also responded to recommendations from the assurers relating
to last year’s CR Report.
Compliance with GRI guidelines
We have benchmarked our CR reporting against the updated Global Reporting
Initiative sustainability reporting guidelines (GRI: G3). We assess our application of
the GRI reporting framework to be at level B+. An index of conformance with the
G3 guidelines is provided on our website: www.vodafone.com/responsibility/gri.
Scope and data
The data in this report cover the following 16 markets: Albania, Australia, Czech
Republic, Egypt, Germany, Greece, Hungary, Ireland, Italy, Malta, the Netherlands,
New Zealand, Portugal, Romania, Spain and the UK. Within this report we refer to
our businesses in all these countries as ‘local operating companies’.
During the 2007 fi nancial year, the Group acquired an operating company in
Turkey and agreed to acquire control of Hutchison Essar in India. We will include
data from Turkey in our next report. This year, we include data from Arcor, our
landline business in Germany, for the fi rst time. The sale of Vodafone Japan at
the start of the 2007 fi nancial year had a material impact in our environmental
indicators for this fi nancial year. This is highlighted in the data in the total
C0
2
emissions and number of mobile phones collected graphs (on pages
22 and 24).
The Group’s associated undertakings (‘affi liates’), franchised retail operations
and partner networks are not included in the scope of this report, although we
work closely with them on CR issues.
Group guidelines on data collection and reporting defi ne the key CR
performance indicators and require all local operating companies to document
sources of data, check data accuracy and have data signed off by a senior
executive. Data are checked and consolidated at Group level.
All references to ‘Vodafone’, ‘Vodafone Group’, ‘the Group’, ‘the Company’ and
‘we’ within this report refer to Vodafone Group Plc and its operating companies.
Vodafone, the Vodafone logos, Vodafone life!, Vodafone live!, Vodafone
Passport, Vodafone Mobile Connect, Vodafone Offi ce, and Vodafone At Home
are trade marks of the Vodafone Group. Other product and company names
mentioned herein may be the trade marks of their respective owners.
What we looked at: scope of our work
Vodafone Group Plc (‘Vodafone’) has engaged us to give assurance on:
1. Managing and reporting Corporate Responsibility (‘CR’) performance –
their description on pages 6, 7 and 34 of their approach to managing and
reporting corporate responsibility using the principles of completeness,
materiality and responsiveness set out in the AccountAbility 1000
Assurance Standard (AA1000 AS);
2. Reporting CR practices and performance in accordance with the
Global Reporting Initiative 2006 Sustainability Reporting Guidelines
(‘the GRI guidelines’) – their self-declaration on page 34 that they have
applied the GRI guidelines at level B+; and
3. Progress against targets – their reported progress against their 2006
commitments on pages 36, 37 and 38
We were asked to carry out work to obtain all the information and explanations
that we considered necessary to provide suffi cient evidence for us to give
reasonable assurance over the subject matters 1 and 2 set out above and
limited assurance over the subject matter 3 set out above.
What we found: our assurance opinion
In our opinion, in all material respects:
1. Vodafone’s description on pages 6, 7 and 34 of their alignment to the
AA1000AS principles
i. Completeness – the way that stakeholders are identifi ed and their views
and concerns are understood;
ii. Materiality – the list of issues which Vodafone considers to be most
material to its business; and
iii. Responsiveness – the response to stakeholder feedback on key CR issues
is fairly stated
2. Vodafone’s self-declaration on page 34 that they have applied the GRI
guidelines at level B+ is fairly stated; and
3. Nothing has come to our attention that causes us to believe that the
reported progress against Vodafone’s 2006 commitments on pages 36, 37
and 38 is not fairly stated.
Our further comments
Improvements made since 2006
• Vodafone has made the following key improvements in managing and
reporting its corporate responsibility performance since last year:
– Introduced “the CR Dialogues” as a way of further engaging with
stakeholders with focus on specifi c issues
– Implemented an enhanced Health & Safety of RF fi elds policy
– Started collecting data to monitor compliance with Group policy and
guidelines on responsible network deployment
– Launched the “Speak Up” programme to provide suppliers and Vodafone
employees working in the supply chain with a means to report ethical
concerns
– Established a partnership with Citigroup to create an international money
transfer service, based on the M-PESA platform
Independent assurance report by Deloitte & Touche
LLP to Vodafone Group Plc on the Group Corporate
Responsibility Report for the 2007 fi nancial year
Vodafone Group Plc Corporate Responsibility Report 2007 35
– reviewing the development process for the CR report, including the
selection of material issues, key performance indicators and the experts
invited to provide comments in pages 32 and 33;
– checking that the GRI content index (available at www.vodafone.com/
responsibility/gri), for each of the standard disclosures required by the GRI
guidance required at level B+, contains the relevant indicator or an
explanation is given as to why it is not relevant to Vodafone; and
– reviewing the content of the report against the fi ndings of our work and
made recommendations for improvement where necessary.
Our work did not include specifi c testing of the accuracy of each of the reported
indicators. Instead we have reperformed a sample of management’s own
testing which they carried out to support their self-declaration that they
have complied with the GRI guidelines at level B+.
Responsibilities of Directors and independent assurance provider
Vodafone’s responsibilities
• The Directors are responsible for determining Vodafone’s CR objectives,
for establishing appropriate performance management systems, for the
preparation of the Group CR report and the information and statements
contained within it.
Deloitte’s responsibilities, independence and team competencies
• Our responsibility is to independently express opinions on the three subject
matters specifi ed by Vodafone set out above.
• We complied with Deloitte’s independence policies, which address and in
certain areas exceed the requirements of the International Federation of
Accountants Code of Ethics for Professional Accountants. We have confi rmed
to Vodafone that we have maintained our independence and objectivity
throughout the year, and in particular that there were no events or prohibited
services provided which could impair our independence and objectivity. Our
report is made solely to Vodafone Group Plc in accordance with our letter of
engagement for the purpose of the directors’ governance and stewardship.
Our work has been undertaken so that we might state to Vodafone those
matters we are required to state to them in this report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than Vodafone Group Plc for our work, for this
report, or for the conclusions we have formed.
Deloitte & Touche LLP
London, United Kingdom
8 June 2006
Areas to consider for further improvements
• Our key recommendations to Vodafone for future improvement in managing
and reporting CR are related to the following areas:
– In an environment of increased sharing of networks with other operators,
guidelines should be developed to set out how the various related data
streams (e.g. energy, waste) are measured and reported.
– Compliance with Group guidelines are core to the achievement of
certain CR goals; consideration should be given to undertaking more
compliance audits.
– A more formal means should be sought of periodically confi rming that the
behaviour of employees is in adherence to the Business Principles.
– The Group Supply Chain Management team have done an excellent job of
rolling out the Code of Ethical Purchasing to the top global suppliers; more
work is now required with local suppliers.
– There needs to be closer alignment and interaction between CR and
Marketing teams at LOC level to further assist in earning the trust
of customers.
Our comments and recommendations for further improvements are a result of
observations during our work and do not affect the opinions we have formed above.
What we did: assurance process and standards
• Our work was carried out by a multi-disciplinary team of CR assurance
specialists in accordance with the International Standard on Assurance
Engagements 3000 (ISAE 3000) and AA1000 AS.
• For AA1000 AS and the GRI guidelines we were asked to perform reasonable
assurance procedures. We planned and performed this part of our work to
obtain all the information and explanations we considered necessary to
provide suffi cient evidence that Vodafone’s description of their approach to
AA 1000 AS and their self-declaration of compliance with the GRI guidelines
were fairly stated.
• For reported progress against targets we were asked to perform limited
assurance procedures. The scope of this part of our work was more limited and
did not include sample testing of source data or operating effectiveness of
processes and internal controls and accordingly provides a lower level of
assurance.
• Our key procedures included:
– interviewing more than 25 managers at Vodafone’s head offi ce, including
the CR team and those with operational responsibility for the issues which
the report covers;
– visiting four local operating companies (Czech Republic, Germany, Italy, and
Romania) and gathering information about a further 12 companies using
interviews and questionnaires;
– reading and analysing public information relating to Vodafone and industry
CR practices and performance during the year;
– analysing and testing on a sample basis the company’s processes relating to:
• Stakeholder identifi cation, engagement and responsiveness;
• Management commitment and the governance structures used for
managing CR;
• Implementation of CR-related policies, codes of conduct, internal audit
and other monitoring activities;
• Collation, aggregation, validation and reporting of CR performance data
including relevant GRI guidelines and
• Reporting progress made against 2006 commitments.
36 Vodafone Group Plc Corporate Responsibility Report 2007
Objectives and commitments
Issue We said
Access to
communications
page 8
We would introduce three signifi cant products with features that reduce exclusion by March 2008.
We would reduce the level of preventable exclusion by at least a third by 2010.
Mobile phones,
masts and health
page 12
We would set targets, track and report stakeholder opinion on how responsible Vodafone is acting regarding mobile phones, masts and
health by March 2007.
Network deployment
page 14
We would have developed, and be reporting against, a method to measure and track key stakeholder opinion relating to how
responsible Vodafone is deploying its network by March 2007.
Earning the trust
of customers
page 16
We would be a recognised leader in responsible marketing by March 2007.
We would engage with key stakeholders on customer privacy issues and seek their views on the appropriate balance between
safeguarding privacy and assisting law enforcement authorities to tackle serious crime and terrorism by March 2007.
We would develop and make available a global mobile internet fi ltering solution to all markets by March 2007.
We would assess compliance with our anti-spam policy and review our customers’ ability to report spam in all operating companies by
March 2007.
Supply chain
page 20
We would work with other major ICT companies to develop a common approach to supplier assessments by March 2007.
We would implement the supplier qualifi cation process (Code of Ethical Purchasing is fully embedded in the process) by March 2007.
We would complete a second stage of 10 site evaluations of global suppliers by March 2007.
We would put in place a whistle-blowing mechanism for suppliers to support the implementation of the Code of Ethical Purchasing
by March 2007.
Energy use and
climate change page
22
We would develop and report against Group-wide quantitative targets for network energy effi ciency and related carbon dioxide
emissions by March 2007.
We would achieve a 40% reduction in network energy carbon dioxide emissions per MB traffi c by March 2011.
Reuse and Recycling
page 24
We would increase the number of phones collected for reuse and recycling by 50% by March 2007.
We would support development of programmes in at least three developing countries to repair, reuse and recycle mobile phones by
March 2007.
We would send for reuse and recycling 95% of network equipment waste during the year from April 2006 to March 2007.
Employees
page 26
We would ensure that every employee in the business has an annual performance dialogue and development discussion with their line
manager by March 2007.
We would continue to deliver a Pride in Vodafone score (in the employee survey) that will at least equal the high-performance norm of
the ‘World’s Most Admired Companies’ survey by March 2007.
We would reduce work-related accidents resulting in lost time by a further 10% (from the 2004/05 baseline) by March 2008.
Vodafone Group Plc Corporate Responsibility Report 2007 37
New commitments
We have Progress We will Deadline
Launched a range of mobile money-transfer services in different markets, announced plans to introduce ultra low-cost handsets,
introduced the Vodafone Speaking Phone and committed £5 million to the development of social products.
Due by March 2008 Introduce three signifi cant products with features that reduce exclusion. March 2008
Conducted research to understand the needs of blind and visually impaired consumers. Due by March 2010 Reduce the level of preventable exclusion by at least a third. March 2010
Commissioned a global survey of expert views on how seriously Vodafone is taking its responsibilities relating to mobile phones,
masts and health.
✔ Improve stakeholder opinion on how responsibly Vodafone is acting regarding mobile phones, masts and health (from the
2006/07 baseline/survey results).
March 2008
Developed and began reporting against a series of key performance indicators to measure our implementation of the Group policy
on responsible network deployment and track stakeholder opinion.
✔ Update existing network deployment guidelines and assess local operating companies’ compliance with global policy .
Continue to track public views on our network deployment and defi ne a target to increase public acceptance.
March 2008
March 2008
Of the consumers surveyed in 12 markets, the majority rated Vodafone as the most responsible and fair telecommunications
company in six countries, second most responsible in fi ve and third in one. However, we did not survey consumers in all markets
where we operate so we are not able to objectively assess our position as leader overall.
✘40% Launch a campaign in each local operating company to address a locally relevant customer issue. March 2008
Engaged with key stakeholders about consumer privacy issues through a range of channels including a multi-stakeholder
engagement process to develop principles on freedom of expression and privacy for the ICT industry.
✔ Conduct consumer research and publish global guidelines on social networking sites and mobile advertising. March 2008
All our operating companies have either implemented or set a target to implement an internet fi lter, except some currently with
low data usage.
✘60% Launch an online privacy awareness programme in all our local operating companies to describe Vodafone’s privacy policy and what
it means for employees.
March 2008
Responses from local operating companies to a self-assessment questionnaire indicate that customers are able to report spam in
all markets in accordance with our anti-spam policy.
✔
Continued to work with other ICT companies to establish a common approach to supplier assessment. A common self-assessment
questionnaire and auditing methodology has been developed through GeSI and EICC.
✔ Implement a project with two strategic Chinese suppliers to manage CR risk within our sub-tier suppliers . March 2008
Rolled out our common supplier qualifi cation process within our Group purchasing function and in all local operating companies. ✔ Achieve 100% follow up within three months for all local and global suppliers identifi ed as high risk during qualifi cation. March 2008
Completed 17 site evaluations in the 2007 fi nancial year, bringing the total to 36 over the past three years. ✔
Established a whistle-blowing mechanism to encourage reporting of any unethical behaviour by Vodafone or its suppliers. ✔
Reported progress against our Group target to reduce network energy carbon dioxide emissions per unit of data transmitted. ✔
Achieved a 29% reduction in network energy carbon dioxide emissions per MB traffi c in the 2007 fi nancial year. Due by March 2011 Achieve a 40% reduction in network energy carbon dioxide emissions per MB traffi c. March 2011
Increased the number of phones collected for reuse and recycling by 59% from the 2005 fi nancial year. ✔ Collect a further million handsets. March 2008
Handset recycling programmes established in Albania, Egypt and Romania. ✔
Recycled 97% of network equipment waste. ✔ Send for reuse and recycling 95% of network equipment waste. March 2008
Our global system to track how many employees have completed a performance dialogue is not yet being used effectively across
the whole Group. Approximately 51% of employees recorded their completion of a performance dialogue in the system.
✘50% Ensure that 90% of employees in the business have an annual performance dialogue and development discussion with their
line manager.
March 2009
Of the approximately 18,000 employees surveyed this year, 80% are proud to work for Vodafone, equal to the high performance
norm of the ‘World’s Most Admired Companies’ survey.
✔ Ensure that 75% of operating companies deliver top quartile employee engagement scores within their local markets. March 2009
Regrettably, the number of work-related accidents resulting in lost time increased by 3.3% this year. This is in part due to improved
reporting in local operating companies. Despite last year’s report on an early achievement of the target, we have decided to
continue to track this indicator due to this year’s results. We will report on progress from the 2004/05 baseline next year using the
original target date.
Due by March 2008 Reduce work-related accidents resulting in lost time by a further 10% (from the 2004/05 baseline). March 2008
www.vodafone.com/responsibility/commitments
Vodafone Group Plc Corporate Responsibility Report 2007 38
Front cover: The mobile
phone shows a text
message sent by the
mobile payment service
M-PESA, confi rming
a money transfer.
Material issues: Our response
This is Vodafone’s seventh Corporate Responsibility (CR) Report, covering
the year ended 31 March 2007. The theme of the report is the potential of
communications. Extending access to communications is the area where
we feel Vodafone can make the biggest contribution to society.
This printed report is structured to give a response to the issues that are most
material to our business. The table below outlines the key elements of our
response to stakeholders on these important issues and shows on which page
more information can be found.
We provide more detail about a wider range of issues on our CR website at
www.vodafone.com/responsibility. A list of further information available on the
web is provided in each section of this report.
Additional information on our business and fi nancial performance, corporate
governance, regulatory issues and directors’ remuneration is provided in our
Annual Report for the year ended 31 March 2007.
Additional information in this report
Chief Executive Arun Sarin answers key questions 1
About Vodafone 2
Stakeholder engagement 4
How we manage corporate responsibility 6
Foundations 30
Views from experts on key issues 32
About this report 34
Assurance 34
Objectives and commitments 36
Performance and data summary 39
Issues Main stakeholders affected Vodafone’s response see page
Extending
access to
communications
Customers, governments,
development agencies and
communities
We continue to research the socio-economic impact of mobile and
develop products with a high social value. Our focus is on enabling
fi nancial transactions, international remittances, developing low-
cost handsets and reducing preventable exclusion.
8
Mobile phones,
masts and health
Customers, communities,
regulators, governments,
the public
Vodafone recognises there is public concern about the safety
of radio frequency fi elds from mobile phones and base stations.
We continue to make objective information widely available
and engage openly with stakeholders on this issue.
12
Responsible
network
deployment
Communities, local councils,
landlords
Our Group policy and guidelines on responsible network
deployment set consistent standards for our operating
companies. Vodafone continues to engage with local stakeholders
in the selection and management of base station sites.
14
Earning the trust
of our customers
Customers, regulators, content
providers, child protection NGOs
Access controls have been installed by all operating companies
that offer age-restricted content. Vodafone signed the European
Framework for safer mobile use by younger teenagers and children.
16
Clear pricing Customers and regulators Vodafone Passport is now available in 13 markets. The average
cost of European roaming calls has been cut by 40% and the
cost of calls can be easily checked by text or online.
17
Privacy Customers, governments,
human rights and civil liberties
groups
Vodafone is participating in a multi-stakeholder dialogue to
establish principles on freedom of expression for the industry.
Privacy offi cers have been appointed in all operating companies.
18
CR in our supply
chain
Workers in developing countries,
suppliers, NGOs
CR has been incorporated into our supplier qualifi cation process
across the Group. We are working with the industry to develop a
common approach to CR supply chain management.
20
Energy use and
climate change
Governments, communities,
environmental NGOs
Our main focus is on energy used in the network: identifying
opportunities to reduce energy use in our base stations and
working with suppliers to improve the energy effi ciency
of new network equipment.
22
Reuse and
recycling
Customers, handset
manufacturers, environmental
NGOs, governments
All our operating companies have handset recycling
programmes in place.
24
Employment Employees We launched a new employee strategy this year, covering six key
areas of people management.
26
Ethics Employees, suppliers Our ‘Speak Up’ programme encourages suppliers to report
ethical concerns via an anonymous third party hotline. We
intend to extend this programme to our employees next year.
28
Public policy
and tax
Governments Openness and transparency are the key elements of our
approach in dealing with governments on these issues.
29
Vodafone Group Plc Corporate Responsibility Report 2007 37
New commitments
We have Progress We will Deadline
Launched a range of mobile money-transfer services in different markets, announced plans to introduce ultra low-cost handsets,
introduced the Vodafone Speaking Phone and committed £5 million to the development of social products.
Due by March 2008 Introduce three signifi cant products with features that reduce exclusion. March 2008
Conducted research to understand the needs of blind and visually impaired consumers. Due by March 2010 Reduce the level of preventable exclusion by at least a third. March 2010
Commissioned a global survey of expert views on how seriously Vodafone is taking its responsibilities relating to mobile phones,
masts and health.
✔ Improve stakeholder opinion on how responsibly Vodafone is acting regarding mobile phones, masts and health (from the
2006/07 baseline/survey results).
March 2008
Developed and began reporting against a series of key performance indicators to measure our implementation of the Group policy
on responsible network deployment and track stakeholder opinion.
✔ Update existing network deployment guidelines and assess local operating companies’ compliance with global policy .
Continue to track public views on our network deployment and defi ne a target to increase public acceptance.
March 2008
March 2008
Of the consumers surveyed in 12 markets, the majority rated Vodafone as the most responsible and fair telecommunications
company in six countries, second most responsible in fi ve and third in one. However, we did not survey consumers in all markets
where we operate so we are not able to objectively assess our position as leader overall.
✘40% Launch a campaign in each local operating company to address a locally relevant customer issue. March 2008
Engaged with key stakeholders about consumer privacy issues through a range of channels including a multi-stakeholder
engagement process to develop principles on freedom of expression and privacy for the ICT industry.
✔ Conduct consumer research and publish global guidelines on social networking sites and mobile advertising. March 2008
All our operating companies have either implemented or set a target to implement an internet fi lter, except some currently with
low data usage.
✘60% Launch an online privacy awareness programme in all our local operating companies to describe Vodafone’s privacy policy and what
it means for employees.
March 2008
Responses from local operating companies to a self-assessment questionnaire indicate that customers are able to report spam in
all markets in accordance with our anti-spam policy.
✔
Continued to work with other ICT companies to establish a common approach to supplier assessment. A common self-assessment
questionnaire and auditing methodology has been developed through GeSI and EICC.
✔ Implement a project with two strategic Chinese suppliers to manage CR risk within our sub-tier suppliers . March 2008
Rolled out our common supplier qualifi cation process within our Group purchasing function and in all local operating companies. ✔ Achieve 100% follow up within three months for all local and global suppliers identifi ed as high risk during qualifi cation. March 2008
Completed 17 site evaluations in the 2007 fi nancial year, bringing the total to 36 over the past three years. ✔
Established a whistle-blowing mechanism to encourage reporting of any unethical behaviour by Vodafone or its suppliers. ✔
Reported progress against our Group target to reduce network energy carbon dioxide emissions per unit of data transmitted. ✔
Achieved a 29% reduction in network energy carbon dioxide emissions per MB traffi c in the 2007 fi nancial year. Due by March 2011 Achieve a 40% reduction in network energy carbon dioxide emissions per MB traffi c. March 2011
Increased the number of phones collected for reuse and recycling by 59% from the 2005 fi nancial year. ✔ Collect a further million handsets. March 2008
Handset recycling programmes established in Albania, Egypt and Romania. ✔
Recycled 97% of network equipment waste. ✔ Send for reuse and recycling 95% of network equipment waste. March 2008
Our global system to track how many employees have completed a performance dialogue is not yet being used effectively across
the whole Group. Approximately 51% of employees recorded their completion of a performance dialogue in the system.
✘50% Ensure that 90% of employees in the business have an annual performance dialogue and development discussion with their
line manager.
March 2009
Of the approximately 18,000 employees surveyed this year, 80% are proud to work for Vodafone, equal to the high performance
norm of the ‘World’s Most Admired Companies’ survey.
✔ Ensure that 75% of operating companies deliver top quartile employee engagement scores within their local markets. March 2009
Regrettably, the number of work-related accidents resulting in lost time increased by 3.3% this year. This is in part due to improved
reporting in local operating companies. Despite last year’s report on an early achievement of the target, we have decided to
continue to track this indicator due to this year’s results. We will report on progress from the 2004/05 baseline next year using the
original target date.
Due by March 2008 Reduce work-related accidents resulting in lost time by a further 10% (from the 2004/05 baseline). March 2008
www.vodafone.com/responsibility/commitments
Vodafone Group Plc Corporate Responsibility Report 2007 38
Front cover: The mobile
phone shows a text
message sent by the
mobile payment service
M-PESA, confi rming
a money transfer.
Material issues: Our response
This is Vodafone’s seventh Corporate Responsibility (CR) Report, covering
the year ended 31 March 2007. The theme of the report is the potential of
communications. Extending access to communications is the area where
we feel Vodafone can make the biggest contribution to society.
This printed report is structured to give a response to the issues that are most
material to our business. The table below outlines the key elements of our
response to stakeholders on these important issues and shows on which page
more information can be found.
We provide more detail about a wider range of issues on our CR website at
www.vodafone.com/responsibility. A list of further information available on the
web is provided in each section of this report.
Additional information on our business and fi nancial performance, corporate
governance, regulatory issues and directors’ remuneration is provided in our
Annual Report for the year ended 31 March 2007.
Additional information in this report
Chief Executive Arun Sarin answers key questions 1
About Vodafone 2
Stakeholder engagement 4
How we manage corporate responsibility 6
Foundations 30
Views from experts on key issues 32
About this report 34
Assurance 34
Objectives and commitments 36
Performance and data summary 39
Issues Main stakeholders affected Vodafone’s response see page
Extending
access to
communications
Customers, governments,
development agencies and
communities
We continue to research the socio-economic impact of mobile and
develop products with a high social value. Our focus is on enabling
fi nancial transactions, international remittances, developing low-
cost handsets and reducing preventable exclusion.
8
Mobile phones,
masts and health
Customers, communities,
regulators, governments,
the public
Vodafone recognises there is public concern about the safety
of radio frequency fi elds from mobile phones and base stations.
We continue to make objective information widely available
and engage openly with stakeholders on this issue.
12
Responsible
network
deployment
Communities, local councils,
landlords
Our Group policy and guidelines on responsible network
deployment set consistent standards for our operating
companies. Vodafone continues to engage with local stakeholders
in the selection and management of base station sites.
14
Earning the trust
of our customers
Customers, regulators, content
providers, child protection NGOs
Access controls have been installed by all operating companies
that offer age-restricted content. Vodafone signed the European
Framework for safer mobile use by younger teenagers and children.
16
Clear pricing Customers and regulators Vodafone Passport is now available in 13 markets. The average
cost of European roaming calls has been cut by 40% and the
cost of calls can be easily checked by text or online.
17
Privacy Customers, governments,
human rights and civil liberties
groups
Vodafone is participating in a multi-stakeholder dialogue to
establish principles on freedom of expression for the industry.
Privacy offi cers have been appointed in all operating companies.
18
CR in our supply
chain
Workers in developing countries,
suppliers, NGOs
CR has been incorporated into our supplier qualifi cation process
across the Group. We are working with the industry to develop a
common approach to CR supply chain management.
20
Energy use and
climate change
Governments, communities,
environmental NGOs
Our main focus is on energy used in the network: identifying
opportunities to reduce energy use in our base stations and
working with suppliers to improve the energy effi ciency
of new network equipment.
22
Reuse and
recycling
Customers, handset
manufacturers, environmental
NGOs, governments
All our operating companies have handset recycling
programmes in place.
24
Employment Employees We launched a new employee strategy this year, covering six key
areas of people management.
26
Ethics Employees, suppliers Our ‘Speak Up’ programme encourages suppliers to report
ethical concerns via an anonymous third party hotline. We
intend to extend this programme to our employees next year.
28
Public policy
and tax
Governments Openness and transparency are the key elements of our
approach in dealing with governments on these issues.
29
39 Vodafone Group Plc Corporate Responsibility Report 2007
Performance and data summary
Year ended 31 March
2007 2006 2005
Financial
Group revenue (£m) 31,104 29,350 26,678
Adjusted Group operating profi t (before goodwill amortisation and exceptional items) (£m) 9,531 9,399 8,353
Market capitalisation as at 31 March (£bn) 71.6 72.4 90.8
Network infrastructure additions (£m) 2,404.3 2,350 3,064
Revenue distribution
Suppliers (£m) 20,433 25,914 23,799
Employees (£m) 2,050 2,106 2,100
Shareholders returns (£m) 12,636 9,257 6,076
Lenders (£m) 525 402 405
Tax Authorities (corporation taxes and social security only) (£m) 2,544 1,939 1,826
Retained for growth (£m) (6,483) (2,087) 1,503
Employment
Total number of employees
(1)
66,343 62,672 57,759
Number of employees included in the scope of this report 59,909 55,110 –
Employee turnover rates (%) 10.6 12.1 12.2
Occupational health and safety/number of lost-time accidents 156 151 163
Average training spend per employee (£) 530 550 –
Number of women in the top senior management roles 22 out of 204 32 out of 261 31 out of 238
Number of nationalities in the top senior management roles 20 18 23
Environment & network
Number of base station sites 83,561 97,899 97,787
Number of mobile phones collected (million) 1.03 1.37 1.14
Proportion of mobile phones reused (%) 55 30 37
Total CO
2
emissions (millions of tonnes) 1.23 1.31 1.27
Approximate CO
2
emissions from company vehicles (tonnes) 67,000 47,000 56,000
Proportion of network equipment waste reused and recycled (%) 97 97 96
% of people who are suspicious of mast placements (average across 15 markets) 7 – –
Number of countries who have announced agreements on network sharing 3 – –
Customers
Closing proportionate customers (m) 206.4 170.6 140.1
Vodafone Passport customers (m) 11 5.6 –
Vodafone Mobile Connect card customers (m) 1.4 0.7 –
Vodafone live! active devices 32.3 27.1 25.6
Mobile voice usage (billion minutes) 245.0 177.3 143.1
Complaints against Vodafone advertising upheld by the relevant advertising authority 30 17 –
Number of markets where Vodafone is rated 1st or 2nd most responsible telecommunications
company in its behaviour towards the environment, local communities and society 12 out of 13 – –
Social investment
Total contributions to social projects (£m) 43.2 38.1 34.6
(1) Figures used in our Annual Report. It represents the average number of employees in the fi nancial year (rather than at 31 March 2007), incorporating employees of newly acquired entities from
the day of acquisition, and the Group's share of employees in joint ventures.
Vodafone Group Plc
Registered offi ce:
Vodafone House
The Connection
Newbury
Berkshire
RG14 2FN
United Kingdom
Registered in England No.1833679
Tel: +44 (0) 1635 33251
Fax: +44 (0) 1635 45713
www.vodafone.com
Find out more
• Visit our website. Find a complete account of our CR activity at www.vodafone.com.
• Read our CR Dialogues. This series of research papers is designed to stimulate
debate on specifi c emerging issues.
• Tune in to local issues. Eleven of our operating companies publish their own
CR reports focusing on local and national issues (see below).
This document in printed on Revive 75 Silk, manufactured in the EU at mills
with ISO 14001 accreditation and comprising 75% de-inked post consumer
waste and 25% virgin fi bre. The FSC logo identifi es products which contain
wood from well-managed forests certifi ed in accordance with the rules of the
Forest Stewardship Council. Printed by St Ives in accordance with the ISO 14001
environmental management system using vegetable-based inks. The printer
holds FSC Chain of Custody (certifi cate number SGS-COC-1732). By undertaking
all printing, binding and mailing within a 23 mile radius, further environmental
savings in terms of transport and energy are achieved. All the steps we have
taken demonstrate our commitment to making sustainable choices.
Designed and produced by Addison Corporate Marketing.
Consultancy and writing by Context.
Get in touch
We welcome your feedback on our CR performance and your views
on this report. Please contact us at: responsibility@vodafone.com
The potential of
communications
Vodafone Group Plc
Corporate Responsibility Report
For the year ended 31 March 2007
39 Vodafone Group Plc Corporate Responsibility Report 2007
Performance and data summary
Year ended 31 March
2007 2006 2005
Financial
Group revenue (£m) 31,104 29,350 26,678
Adjusted Group operating prot (before goodwill amortisation and exceptional items) (£m) 9,531 9,399 8,353
Market capitalisation as at 31 March (£bn) 71.6 72.4 90.8
Network infrastructure additions (£m) 2,404.3 2,350 3,064
Revenue distribution
Suppliers (£m) 20,433 25,914 23,799
Employees (£m) 2,050 2,106 2,100
Shareholders returns (£m) 12,636 9,257 6,076
Lenders (£m) 525 402 405
Tax Authorities (corporation taxes and social security only) (£m) 2,544 1,939 1,826
Retained for growth (£m) (6,483) (2,087) 1,503
Employment
Total number of employees
(1)
66,343 62,672 57,759
Number of employees included in the scope of this report 59,909 55,110 –
Employee turnover rates (%) 10.6 12.1 12.2
Occupational health and safety/number of lost-time accidents 156 151 163
Average training spend per employee (£) 530 550 –
Number of women in the top senior management roles 22 out of 204 32 out of 261 31 out of 238
Number of nationalities in the top senior management roles 20 18 23
Environment & network
Number of base station sites 83,561 97,899 97,787
Number of mobile phones collected (million) 1.03 1.37 1.14
Proportion of mobile phones reused (%) 55 30 37
Total CO
2
emissions (millions of tonnes) 1.23 1.31 1.27
Approximate CO
2
emissions from company vehicles (tonnes) 67,000 47,000 56,000
Proportion of network equipment waste reused and recycled (%) 97 97 96
% of people who are suspicious of mast placements (average across 15 markets) 7 – –
Number of countries who have announced agreements on network sharing 3 – –
Customers
Closing proportionate customers (m) 206.4 170.6 140.1
Vodafone Passport customers (m) 11 5.6 –
Vodafone Mobile Connect card customers (m) 1.4 0.7 –
Vodafone live! active devices 32.3 27.1 25.6
Mobile voice usage (billion minutes) 245.0 177.3 143.1
Complaints against Vodafone advertising upheld by the relevant advertising authority 30 17 –
Number of markets where Vodafone is rated 1st or 2nd most responsible telecommunications
company in its behaviour towards the environment, local communities and society 12 out of 13 – –
Social investment
Total contributions to social projects (£m) 43.2 38.1 34.6
(1) Figures used in our Annual Report. It represents the average number of employees in the nancial year (rather than at 31 March 2007), incorporating employees of newly acquired entities from
the day of acquisition, and the Group's share of employees in joint ventures.
Vodafone Group Plc
Registered ofce:
Vodafone House
The Connection
Newbury
Berkshire
RG14 2FN
United Kingdom
Registered in England No.1833679
Tel: +44 (0) 1635 33251
Fax: +44 (0) 1635 45713
www.vodafone.com
Find out more
• Visit our website. Find a complete account of our CR activity at www.vodafone.com.
• Read our CR Dialogues. This series of research papers is designed to stimulate
debate on specic emerging issues.
• Tune in to local issues. Eleven of our operating companies publish their own
CR reports focusing on local and national issues (see below).
This document in printed on Revive 75 Silk, manufactured in the EU at mills
with ISO 14001 accreditation and comprising 75% de-inked post consumer
waste and 25% virgin bre. The FSC logo identies products which contain
wood from well-managed forests certied in accordance with the rules of the
Forest Stewardship Council. Printed by St Ives in accordance with the ISO 14001
environmental management system using vegetable-based inks. The printer
holds FSC Chain of Custody (certicate number SGS-COC-1732). By undertaking
all printing, binding and mailing within a 23 mile radius, further environmental
savings in terms of transport and energy are achieved. All the steps we have
taken demonstrate our commitment to making sustainable choices.
Designed and produced by Addison Corporate Marketing.
Consultancy and writing by Context.
Get in touch
We welcome your feedback on our CR performance and your views
on this report. Please contact us at: responsibility@vodafone.com
The potential of
communications
Vodafone Group Plc
Corporate Responsibility Report
For the year ended 31 March 2007
