Vodafone Regulatory News (VOD)

23 September 2020

VODAFONE EMBEDS PURPOSE COMMITMENTS IN ITS SUPPLY CHAIN

20% of supplier selection criteria now based on commitments to diversity and the environment

Vodafone Group will evaluate suppliers on their commitments to diversity, inclusion and the environment when they tender for new work, ensuring that Vodafone's supply chain contributes towards Vodafone's purpose to improve the lives of 1 billion people, while halving its environmental impact by 2025.

From October 2020, a supplier's 'purpose' will account for 20% of the evaluation criteria for a 'Request For Quotation' (RFQ) to provide Vodafone with products or services. Suppliers will be assessed on their commitment and performance to diversity & inclusion, the environment and health & safety in categories where it is a risk.

Vodafone Group CFO Margherita Della Valle said: "We want Vodafone's supply chain partners to be aligned with and support our desire to build a resilient, sustainable and inclusive digital society. From October 2020, we are evolving our vendor assessment criteria to give significant weighting to our suppliers' commitments on diversity, inclusion and the environment.

"We will be providing practical support for our smaller suppliers, providing help and tools to ensure that vendors of all sizes have the opportunity to align with our purpose when we consider them for contracts."

For new tenders, suppliers will be asked to demonstrate policies and procedures that support diversity in the workplace, including gender, ethnicity, LGBT+, age and disability criteria. This will include policies on equal pay, and whether suppliers have publicly reported targets in relation to the percentage of female employees company-wide and at senior management levels.

The RFQ process will examine whether suppliers have environmental policies to address carbon reduction, renewable energy, plastic reduction, circular economy and product lifecycle. Vodafone will ask suppliers whether they publicly report their carbon emissions to CDP, a global organisation that supports companies to identify and disclose their environmental impact. Vodafone will also examine supplier commitments to a Science Based Target for carbon emission reductions, whether they plan to use renewable energy, or can demonstrate a Life Cycle Assessment for their products and services.

On tenders where health and safety issues are in scope, such as high-risk work, this will account for 10%, and diversity & inclusion and environmental criteria will account for 5% each.

In July 2020, Vodafone concluded two pilots for major tenders with global, local and SME suppliers, confirming that the revised vendor selection criteria successfully favour those with the highest commitment and action on diversity and the environment.

To allow SMEs and smaller, local companies to compete against larger corporations, Vodafone will introduce positive scoring for that group of suppliers if they commit to introducing policies that align with Vodafone's purpose. In this way, we aim to drive positive change in the supply chain. Vodafone will also support SMEs through a hub on www.vodafone.com, containing guidance, tools, templates and training.

In addition, Vodafone has introduced an 'Innovation Fast Lane' scheme to help with cashflow for small, innovative technology start-ups. This has simplified contracting and enables lower payment terms, capped at a maximum of 21 days from the date of receipt of invoice.

Today's announcement supports Vodafone's aim of building a digital society that enhances socio-economic progress, embraces everyone and does not come at the cost of our planet.

Vodafone believes in a connected digital society, where data flows at speed, connecting people, communities and things to the internet like never before. Gigabit networks, IoT and mobile financial services enable incredible innovation and technologies to be developed to help make our lives easier, healthier, smarter and more fulfilling.

Recent events have shown us the importance of being connected. Equal opportunities are created when people of all ages, genders, socioeconomic positions and abilities are given access to the connected world. We believe in inclusion for all. So we're building networks in the world's most remote communities, ensuring all generations have access to education, and re-imagining technology to make sure no one is left behind in the digital society: www.everyoneconnected.com.

We also believe that urgent and sustained action is required to address climate change and that business success should not come at a cost to the environment. Our focus on energy efficiency, renewable energy supply and network waste will help us to mitigate the growth of our business and our customers' increasing demand for data.

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About Vodafone

Vodafone is a leading technology communications company keeping society connected and building a digital future for everyone.

Vodafone is focused on two scaled and differentiated regional platforms in Europe and Africa. We operate mobile and fixed networks in 22 countries and partner with mobile networks in 48 more. As at 30 June 2020 we had over 300m mobile customers, more than 27m fixed broadband customers and over 22m TV customers.

We connect for a better future. We are optimistic about how technology and connectivity can enhance the future and improve people's lives. Through our business, we aim to build a digital society that enhances socio-economic progress, embraces everyone and does not come at the cost of our planet. That is why we have committed to improve one billion lives and halve our environmental impact by 2025.

For more information, please visit: www.vodafone.com.