Unlocking finance and building accountability: Behind the scenes of Vodafone’s climate transition planning process

In a bid to align strategic planning at large British companies with its legally binding net-zero target, the UK Government touted an ambition for mandatory climate transition plans in late 2021. The announcement was made on the world stage at COP26 in Glasgow.

At the time, the Government’s intention was to introduce a mandate by the end of 2023, beginning with the largest businesses in the highest-emission and hardest-to-abate sectors.

Transition plans go beyond stated emissions targets. They should outline how a business intends to make strategic changes to decarbonise, including alterations to business models and shifting investment priorities.

The UK mandate’s introduction was delayed amid Covid-19 and changes in Prime Minister, but the Government-commissioned Transition Plan Taskforce forged ahead in creating best-practice guidance including its flagship ‘gold standard’.

With these resources from the Taskforce, several businesses have moved ahead of the curve and are set to publicly launch their transition plans shortly.

Among them is telecommunications giant Vodafone. The firm’s group environment lead Andrea McCormick tells edie that it intends to publish its plan in the first half of 2024, after more than a year of work behind the scenes.

She emphasises that the process is “definitely not just about disclosure” and encourages firms wary of another box-ticking reporting burden to consider the wider benefits.

“It is critically important to integrate transition planning into the financial and business planning cycle,” she said. “The two worlds of ESG and finance are increasingly coming together.”

Action and accountability

“Initially, we worked to identify the priority areas of action for the next business planning cycle which, for us, is three years,” McCormick explains when asked how she and her team got started with the transition planning process in spring 2023.

“Most of the time on this project has been sunk into aligning with all the different business functions accountable for delivery on these areas of action.

“Of course, effort goes into the disclosure itself and making sure that wider reporting is aligned. But the bigger amount of effort and the longer amount of time has been spent on internal stakeholder engagement. It’s important that people understand what the transition plan is for, why it’s important for Vodafone, and what their role is in taking action – both to deliver the plan and accept accountability for it.”

Vodafone first publicly committed to a global net-zero value chain in late 2020, setting a 2040 deadline. It subsequently unveiled a vision to reach net-zero operations in the UK by 2027.

Several innovative projects are underway in a bid to accelerate the company’s decarbonisation to these levels. To name just two, the business is financially incentivising supplier emissions disclosure and is using artificial intelligence (AI) to identify and rectify instances of energy inefficiency across its UK network.

For McCormick, transition planning has had great value in that it “formalises the accountabilities, processes and planning that we were doing already”.

This formalisation has come with increased visibility of the hard work and skill development undertaken within teams by senior management, she adds. And this buy-in and understanding across the business is expected to pay off when it comes to timely delivery.

As noted above, the Transition Plan Taskforce advises businesses to update their plans every three years or so, which aligns well with the financial planning cycle for not only Vodafone but the majority of larger British businesses.

Key sustainability workstreams for Vodafone for the coming three years include innovating away from diesel back-up generators and implementing circular economy principles, from design processes to customer engagement campaigns and product and service offerings.

External communications

So, it’s been established that there is a strong internal communications benefit to transition planning. But what about the challenges – and opportunities – that will likely come with releasing the plan to a range of external stakeholders?

The Transition Plan Taskforce’s advice includes ensuring that plans are publicly accessible.

McCormick foresees the plan “giving better visibility” to the work that goes on behind closed doors to decarbonise the private sector.

This, she hopes, will not only build credibility among stakeholders who are attuned to greenwashing, but also give those less knowledgeable about the nature of corporate sustainability projects more insight.

She says: “We want our investors to understand that net-zero is not something that we can set a target to and it will magically happen – it requires change in the ways we operate… [we need to] really be recognising some of the risks, costs, opportunities and trade-offs that are required.”

Even before the plan is publicly available, Vodafone and several of its competitors have worked collaboratively through industry body the GSMA on preparations for transition plan publication. Also involving the Transition Plan Taskforce and Carbon Trust, this project has resulted in the production of sector-specific guidance.

This guidance looks at feasible yet ambitious timelines for the sector to deliver against priority, shared decarbonisation challenges such as phasing out fossil fuels and harnessing digital technologies for energy efficiency.

The telecommunications sector is only estimated to account for 1.5% of global annual emissions. But McCormick emphasises: “There’s not a sector in the economy which the climate transition does not effect. We should all be planning, irrespective of whether we’re in the most high-carbon sectors like oil and gas or not.”

Readers interested in learning more about the Transition Plan Taskforce’s ‘gold standard’ guidance and its next steps for 2024 are encouraged to access this related feature.

HEAR FROM VODAFONE AT EDIE 24

Vodafone’s group environment lead Andrea McCormick is speaking at edie 24 on 20 March.

She will participate in a panel discussion on how businesses can build leading transition plans, and why this is important. She will speak alongside experts from the Aldersgate Group, Lloyds Bank and Chapter Zero.

edie 24 is the brand’s largest face-to-face event of the year and will convene hundreds of sustainability and energy leaders in central London on 20-21 March 2024 for two monumental days of keynote speeches, panel debates, unparallelled networking opportunities, interactive workshops and more.

Experts speaking alongside McCormick on this year’s packed agenda include:

• Chris Packham, renowned naturalist and presenter
• Chris Skidmore MP, author of the Net-Zero Review
• Claire O’Neill, chair of the WBCSD and former UK Minister for Business, Energy & Industrial Strategy
• Chris Stark, CEO of the Climate Change Committee
• Hannah Cornick, head of sustainability and social innovation at Danone
• Natalie Belu, co-CEO of Belu and independent candidate for London’s Mayoral Elections

Tickets for the event are available now on an individual, group and sharing basis, with a full price list available here.

With places limited, edie users are encouraged to book edie 24 tickets now. You can secure your place here.