Sustainalytics - the largest independent provider of Environmental, Social and Governance (ESG) research and ratings - has ranked Vodacom Group as the world’s number one telecommunications service company based on ESG performance.
Indicative of how Vodacom has accelerated its commitment to sustainable development action, the 2021 Sustainalytics report saw the company improve to 1st place from 2nd place in 2020 out of 221 companies in the sector.
“We are honoured to receive this first-place ranking, as it reflects our efforts in driving digital and financial inclusion while reducing our carbon footprint. While this year’s ratings underscore the great strides we’ve made in meeting our goals, we remain focused on reaching our next set of targets as part of our journey as a purpose-led organisation,” says Vodacom Group CEO Shameel Joosub.
ESG in action
Vodacom became the first South African telco to secure an ESG loan when it concluded an agreement with Standard Bank South Africa (SBSA) in 2019. The interest rate Vodacom pays on the loan is directly linked to the company’s ESG performance, which is measured against Sustainalytics’ international benchmarks.
For Vodacom’s ESG measures to succeed in having a positive impact on its operations in the long-term, its goals were embedded into its business strategy. To this end, Vodacom redesigned a key element of its reward programme to appropriately incentivise executives to roll out initiatives that align with the company’s purpose to drive a sustainable culture. Previously, Vodacom’s long-term incentive (LTI) structure was influenced by financial measures. However, in the 2021 financial year, this LTI structure was reviewed to include ESG measures aligned with the three pillars of Vodacom’s purpose strategy.
“Times have changed, and corporates need to be more socially and environmentally responsible,” says Joosub. “Vodacom has moved away from the traditional profit-led mind set to embrace a purpose-led approach. This is how we keep ESG performance top of mind to ensure our business success doesn’t come at the expense of the planet and the people it supports,” explains Joosub.
These ESG measures include creating a digital society by connecting people and things to the internet; championing inclusion for all by creating a digital future that’s equally accessible to everyone; and protecting the planet by reducing the business’s environmental impact.
To action these measures, some of Vodacom’s ESG goals include reaching 72.6 million financial services customers by 2024; driving up female representation at senior management level to 38,5% and above by 2024; and reducing greenhouse gas (GHG) emissions by 25% cumulatively across all sites in South Africa by 2024.
“We remain committed to delivering socio-economic value across our markets in a way that’s environmentally responsible,” concludes Joosub.