IFC’s appraisal considered the environmental and social management planning process and documentation for the Project and gaps, if any, between these and IFC’s requirements. Where necessary, corrective measures, intended to close these gaps within a reasonable period of time, are summarized in the paragraphs that follow and (if applicable) in an agreed Environmental and Social Action Plan (ESAP). Through implementation of these measures, the Project is expected to be designed and operated in accordance with Performance Standards objectives.
PS1: Assessment and Management of Environmental and Social Risks and Impacts:
Environmental and Social Assessment and Management System, Policy and Management Programs
VPC has several policies and commitments on E&S aspects related to supply chains, namely: Code of Conduct, Human Rights Policy Statement, Supply chain and Code of Ethical Purchasing (CEP), and Responsible Minerals Statement. Within the Code of Conduct, the company aligns with the United Nations Guiding Principles on Business and Human Rights (UNGPs) and their policies, governance and due diligence processes that take account of human rights risks.
Vodafone’s Planet strategy centers around three key areas: net zero, enablement of business customers to reduce their own emissions, and circularity. Each area has defined goals, tracked by related key performance indicators. Vodafone has a commitment to reducing their environmental impact and helping to decarbonize society, which is a part of the company’s purpose, as digital technology is key to saving energy, using natural resources more efficiently, and creating a more circular economy to reduce e-waste. Vodafone’s key global goal is to reduce their own carbon emissions to ‘net zero’ by 2030 (Scope 1 & 2), and across their full value chain (Scope 3) by 2040. Details of their commitment are published on its Task Force on Climate-related Disclosures (TCFD) report (https://online.flippingbook.com/view/682172827/http). In 2022, scope 1 & 2 greenhouse gas emissions where 0.97 MM tCO2 and scope 3 were 10.1 MM tCO2.
Vodafone’s CEP sets out the standards expected of suppliers on E&S risks management. It requires suppliers to respect human rights as set out in the United Nations Universal Declaration of Human Rights, the UNGPs, the United Nations Convention on the Rights of the Child and the International Labour Organization’s International (ILO) Labour Standards, including on child and forced labor. All suppliers shall be fully compliant with Vodafone’s CEP at all times. Vodafone periodically monitors compliance and promotes improved performance through its Supply Chain Management System (SCMS), focusing particularly on high-risk and strategic suppliers and is implemented by Vodafone’s SCM Business Enablement Team.
As part of the CEP, Vodafone suppliers are expected to require its suppliers and subcontractors to comply with the CEP and the Code of Conduct, and to ensure that their employees and subcontractors are adequately trained on how to comply with them. Vodafone may consider a breach of this Code a material breach of contract and reserves all its legal rights and remedies in respect of any such breach.
Identification of Risks and Impacts and Monitoring and Review
Vodafone’s corporate risk management system identifies risks as early as possible, evaluating them adequately, limiting or avoiding them through suitable measures, as well as monitoring and documenting them. Vodafone’s risk framework clearly defines roles and responsibilities and sets out a consistent end-to-end process for identifying and managing risks. Supply-chain-related E&S aspects are managed under operational risks, with the Chief Financial Officer.
At Corporate level, Vodafone maps key Environmental, Social and Governance (ESG) topics to review progress of the ESG strategy and performance against ESG indicators and ratings, including: environment (energy consumption and GHG emissions, circularity, environmental benefits from products and services, and climate risk management), social (health and safety, diversity and inclusion, employee rights, responsible supply chain, human and digital rights), and governance (governance, reporting, anti-bribery and corruption).
To monitor E&S performance and implementation of CEP requirements, Vodafone undertakes detailed due diligence process for suppliers on-boarding, as well as during regular supplier monitoring activities. For supplier on-boarding, new suppliers must demonstrate policies and procedures that support safe working, diversity in the workplace and climate commitments in their tender through an ethical, labour and environmental risk questionnaire. Vodafone’s Supplier Assurance Risk Management (SARM) assessment includes a contextual and supplier’s risk assessment, using a risk-based approach, to categorize supplier’s risks as low, medium, or high, depending on the scope of their activity. The process requires suppliers to provide details of their supply chain and supporting information, including health and safety questionnaires, and complemented by on-site audit reports. Additionally, suppliers must sign up to Vodafone’s CEP, which must be cascaded down contractually to their own supply chains.
For supplier’s regular monitoring, Vodafone relies on the work done by the Joint Alliance for CSR (JAC, formerly known as the Joint Audit Co-operation), for which Vodafone is a member. JAC is an association of telecommunications operators established to improve ethical, labour and environmental standards in the information and communication sector (ICT) supply chain and undertakes regular audits of suppliers in ICT value chains. As suppliers provide goods to other members of the alliance, audits and monitoring of E&S conditions are shared among members, reducing supplier’s audit fatigue.
JAC Audit scope includes labour, health, and safety, environmental, ethics and management systems. Vodafone uses these assessments in addition to their own, to identify and manage risks in its supply chain. In addition to formal assessments on specific supplier sites, Vodafone also assess risks during other supplier assessments such as safety visits to network sites and regular visits to manufacturing centers. Suppliers undergoing a JAC assessment are required to allow their employees to complete an offsite worker survey using their mobile to reply anonymously to pre-recorded questions in their local language at any time and from any location. Findings that require action are incorporated into the relevant supplier’s corrective action plan.
Organizational Capacity and Structure
Vodafone’s ESG Committee provides oversight of Vodafone’s ESG program, of sustainability and responsible business practices. Implementation of the SCMS is under the Supply Chain Management Risk & Compliance, which is part of SCM Business Enablement Team. Vodafone’s supply chain team employees are required to complete a Code of Ethical Purchasing refresher training annually so that they can communicate it effectively to suppliers. All Vodafone employees must complete Vodafone’s ‘Doing What’s Right’ mandatory training course, which supports its Code of Conduct.
Emergency Response
Vodafone’s requires suppliers to create a safe and healthy working environment for their workers. The SCMS includes a review of emergency preparedness and response requirements, including fire safety and evacuation plans, installation, and maintenance of fire alarms, among others.
PS2: Labor and Working Conditions
Vodafone’s policies and systems are in line with IFC PS2 requirements related to supply chain. In addition to the Code of Conduct, Vodafone has a Supplier Policy (A1 – Business principles) that states Vodafone’s expectations from suppliers regarding compliance with local law, commitments to OHS, and respect for human rights. Additionally, it states that suppliers shall not tolerate child labor, or any form of discrimination, harassment of bullying; and that it shall pursue equality of opportunity and inclusion for all employees through its employment policies and practices.
Complementing the Supplier Policy, the CEP lays out suppliers’ obligations concerning social and ethical compliance, which also must be followed by suppliers. The document provides more details on obligations related to child and forced labor, working hours, employment terms and payment, disciplinary practices, discrimination, freedom of association and right to collective bargaining, responsible sourcing of minerals and OHS.
Vodafone has various measures to encourage, assess, and map the compliance of Tier 2 suppliers and beyond, where it does not have direct control. Vodafone encourages its suppliers to cascade the CEP to their own supply chains and evaluates strategic suppliers on how they assess the social and ethical risks in their supply chains and how they measure their effectiveness in ensuring compliance as part of the Supplier Performance Programme.
Grievance Mechanism
Vodafone operates a whistle-blowing mechanism called "Speak Up" for all employees, suppliers, and business partners to report any unethical behavior for investigation, including any work-related grievances. Vodafone states that it’s the duty of their suppliers, contractors, business partners, and employees to report any breach of the Code of Conduct, including labour and human rights concerns, environmental damage or any other unethical behavior. The mechanism is operated by a third party, and reports can be made by contacting them through phone hotline or online web report.
Occupational Health & Safety
Vodafone also issued a Supplier Policy for “Health, Safety and Wellbeing”, which sets out supplier’s obligation in relation to these aspects, detailed into: (i) general requirements (local regulation compliance, OHS Management System (OHS-MS) aligned with ISO45001 for high-risk activities, equipment safety, management of subcontractors, performance reporting and KPIs, and others related to maintaining an effective OHS-MS); (ii) specific requirements for high-risk activities and product supply (e.g. permit to work systems, driving and vehicle safety); (iii) incident reporting; and (iv) consequences of non-compliance.
If a supplier is deemed high-risk during onboarding or ongoing supplier monitoring, Vodafone assesses supplier’s compliance with Vodafone’s CEP through a detailed assessment that may involve an on-site audit, including employees’ accommodation facilities where relevant. Audits are conducted either by qualified Vodafone employees, or by appropriately qualified auditors from recognized audit firms. Conditions on the ground are assessed, including employee interviews on factory floors or relevant worksite. Other site audits are conducted under the JAC initiative. Instances of non-compliances are addressed through time bounded corrective action plans (CAPs). During the calendar year 2022/23, Vodafone conducted 83 on-site audits of strategic suppliers.
Vodafone has issued its Modern Slavery Statement (2023), where it recognizes modern slavery risks on its supply chain and describe measures to identify and manage it. When risks are identified, the company shares findings with other peers within JAC initiative to increase wider awareness of the issues identified and support efforts in this area, including sharing the mapping of high-risk suppliers and geographies. Additionally, Vodafone issued a Responsible Minerals Statement, acknowledging risks and stating its responsibility to respect human rights. The focus is on suppliers where it can significantly influence the design or manufacture and targets relevant conflict minerals. It also describes the principles of its due diligence process in this area and expectations from suppliers
