The new Corporate Sustainability Reporting Directive (CSRD) set to come into effect next year will compel a much larger amount of companies to report the impact of their business on the environment and society. What the new directive brings and what role technology plays in the green transformation will be explained by Zuzana Holá, head of communications and sustainability at Vodafone.
How big of a change does this directive entail?
While today there are roughly 50 Czech companies that report non-financial data, with the new directive it will be around 1500. Some of them already do publish non-financial reports but it will be new to many others. It's not that big of a change for Vodafone – we have been reporting our non-financial data voluntarily for many years.
What kind of data is that specifically?
Mainly the condition or the productivity of the company that is not expressed in monetary terms. Investors, customers, suppliers, and employees all need to know how the business model works and how the company is managed, what its long-term goals are and whether they're being met, what risks it's facing, and what its impact is on the environment and society. Three main areas are tracked according to the new ESG standards – E for environmental, S for social, and G for governance. In terms of the environment, it's about tracking carbon emissions or water usage; as for the social aspect, it concerns the treatment of employees, female representation, or the inclusion of people with various disabilities. Governance is about risk management, and it also includes data on the company's transparency.
How do you feel about these new rules from the vantage of a major multinational tech company?
Personally, I'm glad that companies will report according to a unified set of standards. That's not the case today, and it is clear to see – some report not at all, others have very sophisticated annual reports, others yet try to pass information pamphlets about social responsibility as their non-financial reports. They're nowhere near as comparable as financial reports.
In terms of companies that are just picking up ESG standards, what should they keep in mind?
To make sustainability more than just an empty phrase, they need to gather a lot of data that is often difficult to access. That can complicate things significantly for those who are new in the field. It's important to start gradually, with what the companies already have at their disposal. And also to keep in mind what's relevant for the given business. We have the advantage of a long-term record collecting an array of data, and our strategies and goals being set as well. Partly thanks to Vodafone being a multinational corporation, we've already got a lot of tools at our disposal. However, as a big company with a large number of suppliers, we're forced to monitor a huge amount of data, which isn't easy.
So, where should an entrepreneur who needs to start collecting non-financial data look for the necessary information?
I would strongly advise against waiting until the CSRD is implemented in Czech legislation; they need to start as soon as possible. There's already a wide array of platforms and websites that provide basic advice and information. We have an educational platform for businesses and entrepreneurs here at Vodafone. It's called V-Hub, and it helps our customers with digital transformation and provides them with information on the latest news and technological trends. Just recently, we added another layer to it that should help with the switch to ESG. It is meant to guide companies through the fundamental reporting structure according to CSRD; advise on data collection; and also provide practical tips and suggestions on what's most important, what each individual area means and where to find additional pertinent information and advice, where to look for educational materials, or how to use technologies intended to be more environmentally friendly and help lower expenses.
But non-financial data also comprises various social criteria, which, I assume, technology will not be that helpful with.
You are correct. In the ESG layer, we won't be focusing merely on digitalization options that relate to ESG but we'll encompass every topic. We can be an inspiration to many in terms of employee treatment as well as other areas. Because if we've already worked on a specific topic, our approach and experience can be useful to others.
Could you give us an example?
Czechia has been behind for many years in terms of part-time employment, which provides jobs to parents with young children, people with various disabilities, those caring for an ill family member, or people who want to participate in various projects simultaneously. Vodafone implemented part-time employment across all positions for its employees two years ago, which has boosted job seekers' interest, and which we have supportive data for. We provide our employees who become parents – and this applies to adoption as well – with 16 weeks of fully paid leave. They are free to avail themselves of a gradual return back to work following parental leave, wherein they work four days a week for a period of time while receiving a full salary. But all of that is a mere fraction of the wide array of programs that help our colleagues in various situations they may encounter in life.
How can a telecommunications operator actually be sustainable?
We primarily provide connectivity and telecommunications services, which doesn't make many people think of sustainability. It's just too abstract. Vodafone's networks as well as all the technologies that people use at home and at work are based on electric energy, the production of which by traditional means is a huge environmental burden. That's why, as of 2011, our network in Czechia (and as of 2021, all across Europe) is powered exclusively by renewable energy. Besides that, we're also focused on electronic waste, which, if you think about the extent of our infrastructure, we produce large amounts of.
Your services have become much more energy intensive in recent years, how do you deal with that in terms of sustainability?
The volume of data we transfer has been increasing substantially in recent years, last year it was 40% year-over-year. However, thanks to our constant efforts to modernize our networks and seek new possibilities, we've been able to keep the total energy consumption increase below the level of data volume growth. Primarily thanks to green energy but also due to energy efficiency, our emissions were 86% lower last year than the fiscal year prior.
In your last annual non-financial report, you state that you reduce carbon emissions for your clients...
Vodafone truly is helping its clients in terms of their carbon footprint, especially thanks to internet-of-things technologies. Last year, we helped our clients reduce (or not produce, if you like) their carbon emissions by 22 thousand tonnes. To provide a comparison – we produced 1850 tonnes during that same period as a consequence of our operations.
Is there a tool that your clients can use to reduce their energy usage?
Vodafone offers a service called Energy Data Management, which continuously monitors the consumption of electricity, water, gas, compressed air, or heat within the given business. It provides them with an overview of energy consumption that can be accessed whenever needed and can be used to gauge where cutbacks could be made. Companies are often unaware that they may be spending excessively and they have no way of finding that out from a single annual, or at best quarterly, aggregate invoice. There are many examples – ranging from excess heating, through appliances being on for too long, and damaged wiring, all the way to the subsequent leakage of water or compressed air.
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Zuzana Holá is the head of corporate communications at Vodafone while also being responsible for the sustainability of the company's operations and ESG. Her team is tasked with coordinating ESG activities, non-financial reporting, audits, and education.
She is also the chair of the Vodafone Foundation, whose mission is to support technologies with a positive societal impact.
Holá has successfully completed the GRI Certified Training Course and the Business Sustainability Management Course at the University of Cambridge Institute for Sustainability Leadership.
Thanks to her efforts, Vodafone has won the TOP Responsible Business award from the Business for Society alliance multiple times.
EVEN THE SEEMINGLY MINOR IS IMPORTANT
Is there anything that Vodafone is proud of in the field of ecology? "We operate a major data center that requires constant cooling and the excess heat needs to be removed. We have offices in the same building, which were heated by a gas boiler until recently," says Zuzana Holá. "Now, the offices are heated by a pump connected to the existing heating system. This step has helped Vodafone decrease total gas consumption by 15% and lower costs as well. Together with Vantage Towers, a telecommunications tower company, we launched a new project earlier this year, which will see solar panels fitted to hundreds of base stations. The sun beats down on the towers day in and day out, and it would be a shame if we didn't make use of that. Solar panels facilitate energy production right then and there, which is a great example of even a seemingly minor change being important."
Receiving the Czech National Award for Social Responsibility in the Corporate category.
Vodafone has been utilizing exclusively green energy since 2011.
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