vodacom sustainability strategy...vodacom sustainability strategy 1 about this strategy: a message...

Vodacom Sustainability Strategy

Transforming societies and enabling

sustainable living for all

Contents

About this strategy: a message from our Leadership 1

Methodology 5

The context of sustainability and business 7

Vodacom's strategic sustainability priorities 10

Strategy implementation and next steps 20

Further Information 23

Vodacom Sustainability Strategy 1

About this strategy: a message from our Leadership

Integrating sustainability into business strategy

At Vodacom, our sustainability journey is our business journey. We do not see sustainability as separate to our core business, nor do we see it as a discrete set of issues that need to be ‘managed’. Rather, we continue to unlock value in our business by using it as a lens through which to identify the risks and opportunities that affect our ability to continue to add value to our stakeholders and to fulfil our purpose. This belief is what has informed the approach to this sustainability strategy, and I trust that you will see the link between our business and the strategic sustainability priorities contained in this document.

Our industry is fast-paced and exciting, with an ever-increasing rate of change and increasing complexity. The issues that matter to our business and our stakeholders will continue to evolve, as will our strategy to deal with them. The priorities and initiatives contained in this document will live and grow with these changing times, and it this flexibility is built into the design of the strategy process. We will continue to engage our people and external stakeholders for the issues that matter most to them, and develop a response that moves our business forward and fulfils our purpose in society.

I encourage you to engage with the sustainability priorities contained in this document and to share your views on our strategy with me or any member of my Executive team.

Shameel Aziz Joosub Chief Executive

Embedding sustainability in the way we do business

We live out Vodacom’s commitment to sustainability through the decisions we make and actions we take on a daily basis. The sustainability priorities contained in this document guide the issues that we dedicate our attention to because they are important to our stakeholders and our business strategy. It is my hope and intention that the initiatives we invest in and the actions we take flow from these priorities to live out our commitment in everything we do.

There are a number of practical pillars that support the strategic sustainability priorities contained in this document. We are embedding key performance indicators into the various aspects of how we manage our business. We are also enhancing our ability to track the impact of the different initiatives and to report back to stakeholders on our performance. Finally, we continue to search for partnerships that provide opportunities to create shared value through various initiatives.

I would welcome any feedback on this document and contributions on how to take our sustainability journey even further.

Maya Makanjee Head, Corporate Affairs


Executive Summary

Background and objectives of the strategy

This document sets out Vodacom’s approach to managing the business risks and opportunities presented by sustainability issues. It presents the outcome of a structured process undertaken to identify the most material sustainability issues for Vodacom, distil them based on the importance of the issues to the business strategy and key stakeholders, and present them in the form of strategic sustainability priorities that represent risks and opportunities for the business. In doing so, this strategy is intended to guide the integration of sustainability issues into business strategy, and to function as a living document that is constantly updated to reflect the most pressing issues in the external environment that can affect the business.

Methodology adopted in developing the strategy

To place Vodacom on the journey to achieve the alignment between sustainability issues and the business strategy, this document has been developed using a structured approach that uses the same tools that inform the manner in which we set the objectives for our business, run our operations and report on our performance. The process of developing this strategy involved four key steps, namely; identifying the inputs that would feed into the strategy, collecting data from the various sources that represent the different inputs, analysing the data using a set of defined criteria, and developing a set of strategic sustainability priorities. The following graphic summarises these steps.

Context of the strategy

The importance of recognising the impacts of sustainability issues on the business in the form of a strategy document is reflected in how the business environment has evolved in the past 20 years, and how it is expected to get more uncertain and complex as a result of sustainability ‘megaforces’. These megaforces are seen to drive unprecedented risks and opportunities for business, requiring a response that considers the strategic implications of these changes. The following graphic summarises the megaforces that are used to explain the context of sustainability and business.


Strategic sustainability priorities

The outcome of the process adopted in developing this document is a set of ten strategic sustainability priorities. These are framed as the actual risks or opportunities presented by the most material issues and are explained in terms of their importance to Vodacom’s key stakeholders, the impact on the business, and the current and planned activities that make up the strategic responses in each case. The following graphic summarises the set of ten strategic sustainability priorities as set out in the figure that follows.


Strategy implementation and next steps

This strategy document is intended to be the coordinating point for the various initiatives that make up the strategic response to each of the sustainability priorities. It is intended to be a living document that evolves as the landscape of our business changes and the objectives we set for ourselves move in line with the changing competitive situation. The strategy is brought to life and operationalized through an implementation plan for translating the strategy into action, and the different steps of the implementation plan have been outlined in this document.


Methodology

This strategy has been developed through a structured process designed to place sustainability firmly within the context of the overall business strategy. Issues that would fall within the realm of sustainability should not be seen as distinct or in any way removed from the core business. Sustainability represents a lens through which to view the risks and opportunities that a constantly changing external environment presents our company. To place Vodacom on the journey to achieve this alignment, this strategy has been developed using the same tools that inform the manner in which we set the objectives for our business, run our operations and report on our performance.

The process of developing this strategy involved four key steps, as follows:

1. Identifying the inputs that would feed into the strategy: at the outset, the various tools and frameworks that guide the way we govern our overall business were identified to start from the same point of departure as the business strategy. Four key sources of inputs emerged as the key building blocks; the external business environment, the issues that our stakeholders consider most material to them, the business strategy as we have articulated it at present, and the principles of our Enterprise Risk Management (ERM) process.

2. Collecting data from the various sources that represent the different inputs: the process involved consulting widely from a number of different sources to gather the data that would form the basis for defining our sustainability priorities. In some cases, these sources were external to the company, such as an extensive media search and a review of local and international thought leadership on business and sustainability. In other instances, the sources were internal documents, such as Vodacom’s integrated report and corresponding supplementary reports.

3. Analysing the data using a set of defined criteria: the bottom-up process of data collection produced a ‘long list’ of issues that could potentially be material to the company. Subsequently, a structured process was used to analyse the data and distil the most critical issues using a materiality filter. This filter was made up of three primary components that made up the criteria against which each of the long-list of issues were analysed to determine their relevance. The components included; relevance of the issue(s) to the sector, importance to stakeholders, and impact on the business strategy.

4. Developing a set of strategic sustainability priorities: the process of distilling our most material issues using the defined criteria produced a set of ten strategic sustainability priorities. These priorities represent the actual risks or opportunities presented by the sustainability issues and explain the relevance of the issue to our stakeholders, the impact on our business and our current and planned strategic response.

Figure 1 provides an overview of the methodology followed in developing the strategy and how the various steps fit together.


Figure 1: Overview of the methodology to develop the sustainability strategy

The rest of this strategy document is structured as follows;

The following section on ‘the context of sustainability and business’ provides a macro perspective and an international view of how the telecommunications sector and the broader business environment is evolving. This provides the backdrop against which the sustainability priorities are set out to demonstrate the integration between our business strategy and our most important sustainability issues.

This is followed by an explanation of the set of ten ‘strategic sustainability priorities’ that make up the core of this strategy document. These priorities are framed as the actual risk or opportunity that the sustainability issue(s) present to our business. These are explained in terms of their relevance to our stakeholders, the impact on our business, and the current activities and planned initiatives that make up our strategic response.

This strategy document is completed by a short section on ‘strategy implementation’ which provides a summary of the process by which this strategy is operationalized in the business. This strategy is meant to be a living document and to evolve as the context of our business, the needs of our stakeholders and the objectives and manner in which we run our business evolve.


The context of sustainability and business

This section provides the high-level context of this sustainability strategy. It provides a macro perspective on how the broader business environment has changed and what this means for the manner in which we conduct our business. It is intended to demonstrate how issues that fall within the realm of sustainability are core to the way in which international business takes place. There are many specific implications flowing from the megatrends highlighted in this section that are specific to our industry and the regions in which we operate. These are emphasised in the section that follows on our strategic sustainability priorities.

This section is split into three broad themes; how the world has changed, the megaforces shaping the business environment, and the strategic implications for business.

1. How the world has changed

Our business today operates in an ever more interconnected and globalized world. Consumer demands and government policies are changing rapidly, requiring us to be more nimble and flexible than ever before to capitalise on the opportunities or else risk getting left behind. Technology is changing rapidly and constantly innovating is a pre-requisite for survival at the least and a source of defendable competitive advantage if appropriately managed.

Against this background of complexity we face a new set of challenges. For 20 years or more we have recognized that the way we do business has serious impacts on the world around us. Now it is increasingly clear that the state of the world around us affects the way we do business. Figure 2 provides an overview of selected indicators that define the socio-economic context within which international business takes place.

Figure 2: how the world has changed

Whilst some of these indicators may seem far removed from our core business, they govern the overall context within which our sector and company operates. It is important to recognise these macro changes and to subsequently downscale them to the specific impacts on our sector and our operations.


2. The megaforces shaping the business environment

Over the next 20 years, businesses like ours will be exposed to hundreds of environmental and social changes that could bring both risks and opportunities in the search for sustainable growth. These can be summarised in the form of ten ‘megaforces’ that will influence the manner in which business is conducted and how companies interact with their stakeholder. In addition to the prominence of environmental issues, these megaforces reflect transformative changes in the socio-economic structures of societies and highlight critical elements of poverty, unemployment and inequality that are so critical to developing countries today. Figure 3 sets out the set of ten megaforces that can be seen to be shaping the future business environment globally.

Figure 3: sustainability megaforces shaping the business environment1

Each has important implications for our business which must be understood, assessed and built in to long-term strategic planning. These megaforces do not function in isolation from each other in predictable ways. They act as a complex and unpredictable system, feeding, amplifying or ameliorating the effects of others. As we progress on our sustainability journey, our challenge is to understand how these megaforces function and how they might affect Vodacom.

3. Strategic implications for business

Depending on the specific context within which the megaforces play out and the response from an organisation, the same trend(s) can present both risks and opportunities. Figure 4 demonstrates this by highlighting the types of risks and opportunities that typically flow from these megaforces.

1 Source: KPMG report ‘Expect the Unexpected’


Figure 4: risks and opportunities from sustainability megaforces2

The next section which defines out strategic sustainability priorities frames our most material issues in the specific risks or opportunities they present to our business.

2 Source: KPMG report ‘Expect the Unexpected’


Vodacom's strategic sustainability priorities

This section presents Vodacom’s strategic sustainability priorities. These represent the specific risks and opportunities that sustainability issues present to our business. These have been determined by following the process outlined in the Methodology section of this document. In this section, an overarching framework for the sustainability priorities is followed by a detailed explanation of each priority, including why it matters to our stakeholders, how it affects our business and what we are currently doing and planning to do that makes up our strategic response.

Overarching framework for sustainability priorities

Our vision is to transform societies and enable sustainable living for all.

We create value in the economies in which we operate. Our network transfers information, enables communication and facilitates business activities. Recognising the impacts of sustainability issues on our business is key to ensuring that we adequately consider the risks and opportunities that would influence our ability to create and sustain value now and into the future.

The process outlined in the Methodology section of this document resulted in the formulation of ten strategic sustainability priorities, represented in figure 5. The order in which they are presented in this document does not reflect any means of prioritisation, as each of them is considered material to the business strategy and the needs of our stakeholders.


Figure 5: Vodacom’s strategic sustainability priorities

The sections that follow explain each of our strategic sustainability priorities by providing the context for why the issue matters to our business and stakeholders, and how we are responding to the risks and opportunities which are presented.

1. Deliver exceptional network quality

The context

Our network is the backbone of our business. The quality of our network allows us to distinguish ourselves from our competitors. It allows us to attract new customers and also ensures that we retain our existing customer base. Additionally, with governments and regulators starting to focus more on quality over tariffs alone, maintaining our network quality allows us to retain our license to operate without interruption. Further, as we


endeavour to increase our network access, we are also provided an opportunity to develop innovative network solutions in rural areas.

Our strategic response

To deliver exceptional network quality, we are:

Securing access to additional spectrum as data usage escalates;

Renewing our radio access network (RAN) to add single RAN (SRAN) and software defined radio (SDR) technologies to our network. SRAN allows us to accommodate 2G, 3G and LTE on the same base station; and together with SDR we are able to upgrade our network to newer technologies such as LTE. The RAN renewal programme also improves energy efficiency, drives down operational cost and helps us expand our data coverage;

Enhancing our transmission network by installing base stations with fibre-optic cables and high speed IP-microwave transmission. These initiatives will support the RAM renewal programme;

Modernising our core network technologies across both voice and data to enhance resilience and increase core network capacity, simplify our network and pre-empt the IP-multimedia subsystem. This will prepare us for the introduction of Voice over LTE (‘VoLTE’), which is the next step in the evolution of our network; and

Introducing solutions which allow us to analyse our customers’ data and recommend personal value-added services.

2. Deliver superior customer value and protect our customers’ data and privacy

The context

Our customers are the reason why we exist. It is critical that we provide the highest level of customer service and continuously increase the value we bring to our customers’ lives. This will allow us to maintain and grow our position in an increasingly competitive landscape. We are also responsible for protecting our customer’s data, particularly as we analyse more of our customer’s data to recommend personal value-added services, and enable customers to transact and exchange sensitive information over mobile networks. In particular, with data being a key growth driver for our organization, it is important that we create a safe and secure mobile environment to ensure the safety and security of this increasingly valuable asset. This will reinforce our customers trust and loyalty in Vodacom as their preferred network service provider.



To deliver superior customer value and protect our customers’ data and privacy, we are:

Expanding our business insight and analytics capability by introducing next best offer prediction, allowing us to analyse customer data and recommend personalised value-adding services to customers through various channels;

Planning to consolidate our customer-facing systems to ensure a consistent customer experience regardless of the interaction channel;

Introducing new online capabilities that exploit interaction channels such as social media, which allow for more personal interaction with our customers;

Enhancing our current self-service functionality with a focus on mobile self-service through the ‘My Vodacom’ application available for download on smartphones;

Implementing international security best practice in all our operations, to the same standard as the Vodafone Global Security Operations Centre; and

Maintaining an information services system that is secure and allows our customers to enjoy an unmatched experience.

3. Continue to innovate in the way we do business

The context

The Information, Communications and Technology (ICT) sector has grown and evolved exponentially over the past few decades. It is a solution provider to other industries, improving access to information, facilitating innovation, and allowing for the development of new products and markets. The opportunity for this sector to provide value adding services in areas which do not have access to fixed-line telephony is immense

Innovation is core to our business. It allows us to operate in smarter and more efficient ways, and continue generating value for our stakeholders. Innovation is key to developing solutions that address the needs of our various customers, and allows us to stay relevant. It encourages customer loyalty and furthers our market penetration

Our strategic response To continue to innovate in the way we do business, we are: Empowering our people to use their skills, talents and resources for the development of new products and

services as well as simplifying and improving existing systems and processes to continue to strengthen our competitive position.

Embedding a culture where the attributes of speed, simplicity and trust are our overarching guiding principles for how we work, including when identifying areas of process improvements through the ‘Red Card project’ designed to weed out red tape and inefficiency in our business;


Supporting our Innovation team, which is our thought leadership hub of our business and the core structure to enable the commercialisation of innovation in the business;

Promoting the ‘Catalyst project’ to leverage social media to provide our employees with a platform to develop and share ideas on processes, systems and products that help us retain or grow our competitive advantage;

Providing channels for reward and recognition of innovations that have a meaningful impact on our business, including ‘On the Spot’ awards, CEO Awards and Excellence Awards; and

Constantly reviewing the various initiatives designed to promote innovation to ensure their effectiveness and relevance to our people.

4. Increase penetration in existing markets and expand into new markets

The context

The sustainability megaforces of population growth, wealth and urbanization are creating unprecedented demand for telecommunication services in the future. These megaforces are driving a market in which billions more young people seek connectivity, consumers in emerging economies have more money to spend and more people live in cities where telecommunications infrastructure is most easily available. With six of the top ten fastest growing economies located on the African continent, the opportunity for expansion into new markets and growth in subscribers is a key strategic priority for Vodacom. In more mature existing markets such as South Africa, the opportunity to deepen penetration provides the greatest opportunity for growth. Increasing the services offered to each client across different platforms and mediums is core to adding value as a service provider and to growing our revenue base.

We aim to grow the number of customers whose lives we touch. This can be achieved by encouraging our existing customers to use other Vodacom products and services. It can also be achieved through expanding into new markets such as Africa, where the demand for cellular communications and mobile internet access continues to grow.

Our strategic response To increase penetration in existing markets and to expand into new markets, we are: Continuously searching for opportunities to expand into new markets on the continent and increase our reach

into under-served markets;

Deepen our penetration in mature markets by enabling the proliferation of smartphones, improve the affordability of value-added services and enhance data coverage;

Grow our business in the Enterprise market segment through the introduction of new services such as fibre

to the home and fibre to the office; and

Promote the development and uptake of mobile-enabled lifestyle services such as life and non-life insurance, mobile money and mobile health.


5. Manage the environmental footprint of our business

The context

Our business operates in an increasingly resource constrained world. In delivering services to customers and managing our operations, we consume natural resources such as energy, minerals and water. We generate carbon emissions, have an impact on the generation of electromagnetic radiation, and the construction of our network infrastructure has a local environmental impact. It is important that we understand our cradle to grave environmental footprint, from the production of our products and the provision of our services, to the disposal of our network and electronic waste.

Our ability to proactively respond to a changing operating environment will influence our resilience as an organization. We believe that we can provide innovative technological solutions to reduce operational energy costs and carbon emissions, while providing products and services that help customers to live and work more efficiently and flexibly.


To manage the environmental footprint of our business, we are:

Leveraging existing management structures such as the Vodacom South Africa corporate environmental policy and bi-annual reporting of key environmental data to Vodafone group to drive strategies and actions to manage our environmental footprint;

Assessing alternative energy options, including commercially-viable renewable energy technologies which, besides reducing our carbon emissions, will help us serve remote areas;

Setting short-term targets to reduce Vodacom’s carbon emissions by 5% per base station site per year. This will be achieved by investing in new technologies, free cooling, and using alternative energy sources such as generator-battery power hybrid units, and wind and solar generation for remote base station sites;

Supporting technological solutions which have the potential to replace traditional, carbon-intensive methods of doing business, such as cloud computing, video conferencing and machine-to-machine transactions;

Developing a policy standard to ensure the consistent application of processes, procedures and governance for the management of electronic waste from our operations and universal adherence to our preferred methods of dealing with waste in the following order of priority; prevention, minimisation, reuse, recycling, energy recovery and disposal;

Engaging with our stakeholders to provide education and raise awareness, and manage local concerns around mobiles, masts and health, as guided by the strategy, policies and goals set by the Vodafone Board on Radio Frequency;

Reinforcing our commitment to managing, designing, siting and constructing operational facilities with minimal impact on the social, biophysical, cultural and historic environment; and

Ensuring that we follow the stringent guidelines we have set for identifying and decommissioning sites that are no longer operational and adhere to specific conditions associated with in terms of the initial environmental authorisation Record of Decision, including restoring and rehabilitating these sites to their original state.


6. Create and sustain value for the communities and markets in which we operate

The context

At a time when trust in business is at an all-time low, companies are facing increasing pressure to demonstrate how they are creating and sustaining value in the economies in which they operate. With legal and moral compliance converging, companies are being called upon to meet the spirit and not merely the letter of the law when it comes to issues of payment of due taxes, compensation of employees and the development of local communities.

We aim to create and sustain value. We operate in a number of different countries where our network transfers information, enables communication and facilitates business activities. The value we create is shared with our stakeholders. We provide salaries and wages to our employees, dividends to our shareholders, corporate taxes to the governments in the countries in which we operate, support to communities, business to the providers of financial capital and to our business partners. We are committed to furthering the transformation agenda in South Africa and encouraging localization in the areas in which we operate.


To create and sustain value for the economies in which we operate, we are:

Committed to transformation in South Africa by increasing black representation in our top management categories and continuing the increase in the total training spend on black employees;

Strengthening our focus on preferential procurement, including increasing our spend on exempt micro enterprises and qualifying small enterprises, and continuing our 15 calendar-day payment terms to qualifying black-owned small, medium and micro enterprise (‘SMME’) suppliers;

Promoting enterprise development by investing 5% of Net Profit after Tax (NPAT) in enterprise development activities; and

Investing in socio-economic development through investing 1% and 0.5% of Net Profit after Tax (NPAT) in ICT-driven and general Corporate Social Investment (CSI) projects respectively.

7. Provide a stimulating and rewarding environment for our people

The context

Today’s young working population and the ‘Millenials’ search for greater meaning in their work and for a higher purpose in their jobs, in addition to being rewarded and recognised fairly for their efforts. To create a productive working environment that allows people to fulfil their potential, companies need to enable employees to find a path that links their daily jobs with something that makes an impact on the issues that people feel passionately about. At a more fundamental level, governments and citizens are increasingly concerned with ensuring the protection of basic human rights, and this has important implications for the investment attractiveness in the different regions that we operate in.

We depend on our people. We need the right people with the right skills to operate our business effectively and create value. To do this we need to attract and retain the right people by creating a safe and rewarding environment, and to create the right culture and environment where employees can thrive and have the freedom to pursue their higher purpose through their work. We are also committed to employment equity to further South


Africa’s economic development and to the protection and furthermost of human rights in each of the regions where we operate


To create a safe, stimulating and rewarding environment for our people, we are:

Continuously engaging our employees through a formalized process of regular performance management, reward and recognition and monitoring & evaluation through our annual people survey;

Supporting our employees in managing their work-life balance and promoting all-round development through a dedicated employee wellness Centre at our Midrand campus, a confidential employee counselling line and various campaigns to create awareness of personal development issues;

Enabling the management of HIV and AIDS through education and awareness programmes, full and fair application of our policy on fairness and non-discrimination, and protection and support for affected employees;

Promoting equality and fairness in recruitment and performance management through the application of our resourcing policy, which is designed to further these aims; and

Preventing unfair discrimination through the full, fair and objective application of our disciplinary policy, ensuring equal treatment of employees irrespective of union membership, communicating standards of acceptable behaviour and consequences of non-compliance to all employees, and ensuring the resolution of all reported matters within five days as per our grievance policy.

8. Proactively engage with our key stakeholders

The context

Our business touches many lives and we have a wide range of stakeholders, with vastly differing views that are important to the sustainability of our business. We operate in an industry constantly in flux and with ever-changing risks and opportunities. Consequently, being able to pre-empt the changing needs of our stakeholders in this dynamic environment is key to retaining and growing out competitive advantage. We believe that simply answering and responding to our stakeholders is neither sufficient nor a fulfilment of our role as a responsible corporate citizen. Rather, we undertake to proactively engage with our stakeholders to understand their needs and take deliberate steps to fulfil our responsibilities.

A key element of our ever-changing environment is regulation which, when designed and implemented appropriately, is a powerful tool to maximise the value that the sector generates for companies and their stakeholders. However, there is a general increasing trend in the complexity of regulation across most sectors, including in mobile communications. Complying with this growing body of regulation is often becoming more onerous, and the costs of non-compliance are ever-greater.

As a telecommunications company operating in different countries, we need to comply with an assortment of regulations. The regulatory requirements continue to evolve as we diversify to offer value added services in areas such as health and financial services. It is important that we proactively engage with regulatory bodies to understand, help to inform and respond to a changing regulatory environment.



To proactively engage with our key stakeholders, we are:

Guiding our interactions through our existing stakeholder engagement framework, which affirms our standing commitment to build and manage our engagements with all our stakeholders and shapes our interactions with each individual and group.

Leveraging our existing Future Agenda Seminar series to engage with our stakeholders through creating an objective platform to discuss trends, future challenges and the importance of mobile technologies.

Engaging with regulators and governments through our specialist regulatory and government relations teams, ensuring that their deep functional and industry expertise is leveraged for effective engagement with government;

Actively participating in the development of industry regulations through written submissions and attendance at formal hearings on legislative and regulatory changes; and

Leveraging the international experience and network of our parent company, Vodafone, to contribute to policy development and ensure regulatory compliance.

9. Ensure the protection and furtherment of human rights

Despite unprecedented socio-economic progress around the world in the last half-century, there continues to remain unacceptable levels of human rights violations in various parts of the world. The political turmoil and economic challenges that continue to afflict many African countries create conditions where vulnerable and marginalised communities continue to suffer violations of their inalienable rights. These challenges notwithstanding, there are also many examples of positive developments in relation to human rights where governments, business and civil society have worked together to enhance the interests of all members of society.

As an organisation with considerable reach and influence in developing countries, we believe it to be our responsibility and mission to ensure the protection and furtherment of human rights in everything that we do.

To ensure the protection and furtherment of human rights, we are:

Ensuring the protection of the rights of all employees through the application of our Human Rights Declaration that is based on the International Labour Relations (ILO) Protocol on decent work and working conditions, covering the areas of; creating jobs, guaranteeing rights at work, promoting social dialogue, and extending social protection;

Assessing our performance against various mandatory and voluntary standards like the Organisation for Economic Cooperation and Development (‘OECD’), the International Labour Organisation (‘ILO’) and the United Nations Global Compact (‘UNGC’).

Contributing to industry-level and national initiatives to enhance the protection of human rights in the countries in which we operate in order to promote socio-economic development and enhance the investment attractiveness of these regions.


10. Embed the highest principles of corporate governance in the way we do business, including the promotion of ethical practices and anti-corruption

The last two decades have seen the mainstreaming of formal codes of Corporate Governance into business, particularly for listed entities. This is reflective of the increasing importance of companies living and communicating the values by which they conduct their operations in line with the growing expectation for firms to be responsible corporate citizens. In South Africa, the implementation of the King Codes of Corporate Governance through the Johannesburg Stock Exchange (JSE) is a strong driver for the formal adoption of Corporate Governance principles into business. At the same time, stakeholder pressure, public scrutiny and the media have used ‘soft’ power and informal channels to direct companies to adopt and communicate the principles that guide the way they do business.

We believe that embedding the highest principles of Corporate Governance in the way we do business is first and foremost the right thing to do, and it makes clear business sense. We have a societal and moral obligation to our stakeholders to run our business in a manner that creates value for society, promotes ethical practices, and stimulates responsible behaviour from all individuals and organisations that deal with us. We believe that doing so will not only help us run our own business better and more profitably, but will also enhance our reputation and strengthen our competitive position as the preferred company to do business with.

To embed the highest principles of corporate governance in the way we do business, we are:

Operating our business based on the principles of the King III Guidelines, including the formation of the necessary management structures such as Board Committees and sub-committees;

Continuously improving on our Integrated Reporting journey to provide our stakeholders with the most complete, holistic and meaningful view of our business, the impact we have and the risks we face.;

Ensuring that all our employees are aware of and in compliance with our Code of Conduct at all times and any incidents of non-compliance are dealt with in line with our Disciplinary Policy; and

Equipping our employees at all levels and in each of our subsidiaries with the information they need to protect themselves and the company from the risk of corruption and bribery. This includes contact classroom learning, virtual training and the communication of the Code of Conduct, which includes anti-corruption/bribery;

Using our supply chain to promote ethical practices by screening potential suppliers for issues relating to bribery and corruption, and requiring our business partners to provide assurance on their compliance with Vodacom’s anti-corruption/bribery policy, including training of their employees on these matters, where necessary;

Incorporating anti-corruption/bribery considerations into all due diligence assessments for target companies as part of the Mergers & Acquisitions process and factoring in external governance and corruption factors when evaluating any investment;

Conducting quarterly company risks assessments, including through the Internal Audit function to ensure adequate response to key strategic risks posed by corruption and bribery, and implementing financial and accounting procedures as internal controls to manage these risks;


Strategy implementation and next steps

Our Sustainability Strategy describes our sustainability priorities and our strategic response to these issues. It also sets the basis for defining how we measure our sustainability performance. The implementation of our Sustainability Strategy is embedded in our business through the definition of key performance indicators and targets, which allow us to monitor and assess how we are doing. Figure 6 outlines the different stages in strategy and implementation at a high level and contextualizes the information contained in this document along this journey.

Figure 6: Process of strategy development and implementation

Our immediate focus is to enhance the development of Key Performance Indicators (KPIs) across various aspects of our business to track our performance and communicate the results. Figure 7 sets out an example of the output of this process that we will build upon and refine further in order to embed these management tools.

Figure 7: Example output of developing key performance indicators

Sustainability Strategic Priority Strategic Response Key Performance Area Key Performance Indicator

Deliver exceptional network quality

• RAN renewal programme

• Network quality

• Customer experience • Dropped calls

• Speech quality

Deliver superior customer value and protect our customers’ data and privacy

• Data privacy initiatives

• Customer protection policies and initiatives

• No. of complaints for breaches of customer privacy

Continue to innovate in the way we do business

• Partner to develop new products

• Innovative products/ solutions

• No. customers per product/service in market segments


Sustainability Strategic Priority Strategic Response Key Performance Area Key Performance Indicator

Increase penetration in existing markets and expand into new markets

• Expansion programme

• Infrastructure footprint

• Markets served • Network coverage

Manage the environmental footprint of our business

• Investing in free cooling, generator-battery power hybrid units, wind and solar for BTS

• Environmental impacts (Energy, water, carbon, infrastructure)

• Environmental initiatives

• Carbon footprint

• Water consumption

Create and sustain value in the communities and markets in which we operate

• Develop strategic value added services

• Value added to society

• Vodacom Foundation

• Direct and indirect impact on economy (VAS)

Provide a stimulating and rewarding environment for our people

• Redesigned recognition programmes

• Employee wellness center

• Health and Safety

• Skills and succession planning

• Employee benefits

• LTIFR

• Training hours

Proactively engage with our key stakeholders

• Regular meetings with regulatory bodies

• Regulatory challenges • No. of legal actions

Ensure the protection and furtherment of human rights

• Assessing our progress in relation to international standards

• Voluntary compliance • Incidents of non-

compliance

Embed the highest levels of corporate governance, including the promotion of ethical practices and anti-corruption

• Undertake fraud and corruption risk reviews

• Implement ethics training and initiatives

• Ethics and corruption incidents

• Business units analysed for risks related to corruption

This strategy document is intended to be the coordinating point for the various initiatives that make up the strategic response to each of the sustainability priorities. It is intended to be a living document that evolves as the landscape of our business changes and the objectives we set for ourselves move in line with the changing competitive situation. The strategy is brought to life and operationalized through the various steps of the implementation process outlined above. Progress according to this strategy will be communicated through the Integrated Report and through the relevant Management Structures within the organisation.

Further Information

For further information on sustainability at Vodacom, please visit our website http://www.vodacom.com/com/aboutus/sustainability

You can also access this link on your smartphone through the following QR code.

http://www.vodacom.com/com/aboutus/sustainability

vodacom sustainability strategy...vodacom sustainability strategy 1 about this strategy: a message...

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