Case Study – Vodafone Sustainability Review
Monique Witsen
As one of the largest mobile companies in the world which continues to grow, Vodafone is committed to conducting business in a responsible and ethical way. By engaging with and influencing it’s business partners and customers they aim to reduce their environmental impact to help build more sustainable societies.
Current practices in relation to resource usage and purchasing at Vodafone
Vodafones global network currently accounts for approximately 80% of its total energy. In its emerging and mature markets, Vodafone needs to do ‘more with less’ and are working hard alongside their suppliers on developing ways to achieve this across the board.
By improving energy efficiency, implementing the use of alternative energy and through electronic waste recycling they aim to cut their CO2 emissions in half in mature markets by 2020. As the network expands in emerging markets such as Asia and Africa, Vodafone’s carbon footprint is increasing, however they are working towards a cut in CO2 in these markets by 20% per network node by 2015.
Within it’s operations Vodafone is continually using less energy intensive air conditioning and power amplifiers, they have increased the maximum temperature at which base stations are able to operate at, they have enabled the remote shutdown of base stations during periods of low demand and are installing more efficient Single Radio Access Network technologies that operate the 2G, 3G and long term evolution networks.
In its emerging markets the use of renewable energy (solar and wind) is proving to be particularly effective as there is not always access to a reliable energy source. In areas of Bihar India, grid electricity is only available for 8 hours a day, if available at all, and there has been a great reliance on diesel generators to provide enough energy required to run the Vodafone base stations. This is both costly and damaging to the environment. By using solar power and hybrid base stations (diesel and solar) there will be a significant reduction in the dependence on fossil fuels and carbon emissions. The success of using renewable energy is evident in Assam India, where sites using solar power use 63% less diesel and those using both solar and wind power use 85% less diesel. In 2010/11 19% of Vodafone total energy use was from renewable sources.
For its customers, machine to machine (M2M) technology provides access to data between mobile devices allowing business’ to improve efficiency, cut costs and reduce their own carbon emissions. M2M can allow for a much more flexible work practice and has helped cut emissions from employee commuting by approximately 25% at Vodafone in The Netherlands.
As Vodafone and British Gas have done in the UK, when embedded with SIM technology, Smart Meters using M2M connections provide remote monitoring of the consumption of utilities (electricity, gas and water). This reduces carbon emissions by allowing customers to keep track of their usage in real time and adjust accordingly.
Vodafone has encouraged its customers to recycle old or unused handsets for many years. They continue to increase their focus on how best to manage e-waste, especially in emerging markets where a lack of basic recycling facilities creates hazards for both human and environmental health. Vodafone is also co-chair of the Global e-Sustainability Initiative which promotes collaboration on research into e-waste within the industry.
In regards to its purchasing Vodafone have very high environmental standards and monitor their suppliers closely through the Carbon Disclosure Project. Vodafone choose to work with manufacturers that use sustainable materials and less hazardous substances throughout the production process.
Targets set for improvements at Vodafone
To achieve their mission “to be admired as a diverse ethical company, operating responsibly and providing services that enable a more sustainable society for our customers”, the company sets their targets within the 3 areas of creating sustainable societies, enabling eco-efficiency and behaving responsibly, ethically and honestly.
Some targets outlined in Vodafone’s Sustainability Report for the year ending 31 March 2011 were:
Creating sustainable societies
· To boost economic development in previously isolated communities by providing fast, reliable internet / mobile networks and low cost devices and service.
· By March 2013 - aim to provide 10 million carbon reducing M2M connections in mature markets.
· By March 2015 - be recognized as a major contributor to the Millemnium Development Goals.
Eco-efficiency
· Aim to be recognized as a ‘green’ brand in 75% of it’s mature markets.
· Help to create infrastructure that manages e-waste in 3 emerging markets.
· Work with suppliers to develop joint CO2 reduction strategies, accounting for 50% of procurement spend.
· By March 2020 - reduce CO2 emissions by 50% in mature markets. A 9% reduction has already been achieved since 2006 / 07.
· By 2015 – cut CO2 in emerging markets by 20% per network node.
Responsible, ethical and honest behavior
· By March 2012 – Ensure that suppliers accounting for 50% of procurement spend have adopted the Global e-Sustainability Initiative (GeSI) common approach.
· Offer facilities for telecommunications services for its visually and hearing impaired customers, as well as the elderly.
How do Vodafone implement performance improvement strategies?
To reach their sustainability targets, Vodafone break it down into the three target areas outlined above.
How do Vodafone help create sustainable societies?
· Providing low cost internet access via the use of bespoke ‘green’ internet enabled mobile handsets. The Vodafone 340 costs around US$30.
· Introduction of Opera Mini browser which includes a job search application and an English language service in South Africa.
· Introduction of the revolutionary Webbox. A low cost (US$80) plug and play keyboard which connects to your television, eliminating the need for a computer or fixed line.
· Enabling financial services via mobile in emerging markets, such as South Africa, Fiji and Qatar.
· Providing mobile services in emerging markets allow for more efficient healthcare services.
· They have developed the Al Johara program which enables women in Qatar to learn entrepreneurial skills and to earn a living.
· Looking into the potential commercial opportunities of using mobile services to enable development and environmental benefits.
· Using M2M connections for smart metering and logistics in mature markets, allowing for more mobile flexible and carbon reducing working conditions.
How do Vodafone encourage eco efficiency?
· Using fresh air to cool equipment rather than air conditioning. This saves 35,000 tonnes of CO2 per year.
· Increasing the maximum temperature at which the base stations operate at.
· Enabling remote shutdown of base stations during periods of low demand. This reduces the energy used at each site by 5%.
· Installation of new, efficient Single RAN technology operating 2G, 3G and LTE networks. 9000 of these had been installed by March 2011, saving 25,000 tonnes of CO2 per year.
· Powering approximately 400 base stations with onsite renewable energy in 16 of it’s markets.
· Promotion of handset recycling as well as ongoing management of e-waste, particularly in emerging markets.
· Developed a universal and energy efficient charger that can be used on several different phones worldwide.
· Encourage suppliers to include environmental best practices.
· Promotion of paperless billing.
How do Vodafone behave responsibly, ethically and honestly?
· They are developing products and integrating features for the visually and hearing impaired as well as the elderly. The Emporia RL 1 handset, launched in Germany, is exclusive to Vodafone and includes accessible features such as a simplified menu, large screen and keys and a loudspeaker which is compatible with hearing aids.
· Improve supply chain standards and ensure that suppliers accounting for 50% of procurement spend have adopted the GeSI approach.
· Focusing on the safety of Vodafone staff in all areas and markets.
· Promote diversity and inclusion within the company.
How do Vodafone monitor performance?
To gauge their sustainability performance, Vodafone conduct audits, surveys and monitors Key Performance Indicators / KPI’s below yearly to track their progress against their strategic company objectives.
The following table can be viewed in full here on page 22.
http://www.vodafone.com/content/dam/vodafone/about/sustainability/reports/2010-11_vodafone_sustainability_report.pdf
References
http://www.vodafone.com/content/dam/vodafone/about/sustainability/reports/2010-11_vodafone_sustainability_report.pdf
http://mobile.softpedia.com/phones/Vodafone/Vodafone-340.shtml
http://www.vodafone.com/content/index/about/what/devices/webbox/product-details.html
http://www.vodafone.com/content/index/media/news/webbox.htm
http://www.vodafone.com/content/dam/vodafone/investors/factsheet/group_factsheet.pdf