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Stakeholders’ expectations and important strategic developments determine the content of this report

Vodafone Netherlands publishes an (integrated) annual report for the third time this year. Herein we report our strategy and performance and we explain what actions we have taken, where we were successful and the challenges we have encountered. Through this annual report we want to show our stakeholders how we provide added value for our business, employees, customers and society as a whole.

This report is based on the fourth generation guidelines of the Global Reporting Initiative (G4, Core level). Our CEO, Director Finance and Director Corporate Affairs & Strategy were involved in determining the content of the report and they have provided their approval for publication.

Definition and scope
The scope of this report is Vodafone Netherlands, comprising the activities of Vodafone Libertel BV, unless otherwise stated. We do not report on the operations of the acquired entities Wiericke BV, Nexct and VTC in this report. Acquisitions will be included in the data from the beginning of the next financial year. Divestments are collected retroactively from the data from the 1st day of the financial year.

The data contained in this report relate to the strategic achievements and material issues of Vodafone and not on the performance of our subcontractors, suppliers and/or other indirect effects. It would be too complex to include this performance into our calculations. In the chapter on Governance we report on how we encourage our suppliers to adopt a responsible and sustainable operation. Vodafone Group Plc. reports on the international sustainability performance (see www.vodafone.com).

The reporting period covers 1 April 2014 to 31 March 2015.
The publication date is 30 June 2015.

Determining the content (materiality)
Our principles for determining the contents of the report are the expectations of our stakeholders and significant strategic developments. We defined 10 general material themes and specific topics within that (see the table on Material themes and topics). All themes and topics are discussed in this report. Below we describe how we determined the material themes.

Identification and prioritisation
We constantly monitor the developments in society and issues that may have a bearing on our organisation. We do this by preparing an overview of the concerns and expectations of the 15 stakeholder groups. The sources we used are several external studies (including sector studies), media and political scanning and issue analysis, individual interviews and the results of our employee satisfaction survey (People Survey).

We combined the main needs, expectations and concerns of stakeholders into 10 universal themes: ‘Network Performance’, ‘Customer Service’, ‘Fair and transparent charging’, ‘Digital Rights’, ‘Impact on Health and the Environment’, ‘Economic and Social contribution and Innovation’, ‘Attractive employer’, ‘Challenging’, ‘Responsiveness’, ‘Reliability and in control’. These themes affect our business performance and are concerned with 1) what we offer our customers in the form of technology, solutions and services, 2) the manner in which we do this, and 3) the (intended) effect of our activities. Several specific subjects are involved in these topics (see the table on Material themes and topics). We either addressed these issues in 2014-2015 or we expect to do so in the coming years. External studies have shown us which material issues are important for which stakeholder groups (see the Stakeholder table). The top 3 themes with the most stakeholders are: 1) Network performance 2) Customer service 3) Fair and transparent charging.

In the materiality matrix we show how relevant the 10 material themes are for our stakeholders and for the performance of our organisation. We only included themes that are important, very important or essential for stakeholders and for the performance of Vodafone.

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Material themes and topics

1. Network performance

Specific topics

High speed data network
Network continuity (including regional roaming)
Coverage in remote areas
National offer of fixed broadband services
Good coverage
Knowing when and where there are outages and when
network operations is being done

2. Customer service

Specific topics

Qualitative and fast service

Chapter

3. Fair and transparent charging

Specific topics

Unexpected high invoices
Compensation in case of outages
Roaming charges
Transparent pricing for mobile phones within a subscription
Problematic debts

4. Digital rights

Specific topics

Protecting the privacy of our customers
Net neutrality
Tapping requests ordered by the government

5. Impact on health and the environment

Specific topics

Environmental impact of energy consumption through our network
Recycling and reuse of phones and equipment
Sustainable production of phones
Radiation and health

6. Economic & social contribution and innovation

Specific topics

Economic impact
Efficient collaboration with partners and governments
Technological developments and innovations
Mobile phone theft
Safety in traffic

7. Attractive employer

Specific topics

Good employer:
Simple and quick decision-making processes
Leadership and cooperation
Employee development

Social responsibility as an employer:
Employ people with limited capacity in the workplace
Flexible labour market
Diverse and inclusive organisation and women in senior management
Positions and job experience for young people

8. Challenging

Specific topics

Fierce competition in the telecommunications market
Need for access to the fixed market

9. Responsiveness

Specific topics

Fast response to developments in the market and society

10. Reliable and in control

Specific topics

Reliability of systems
Fast and effective resolution of problems

Validation and assessment
The internal working group (see below) that is responsible for the preparation of this report, has assessed the process of identification and prioritisation and the results of this. The Directors then approved the material themes covered in this report. Every year we test through quantitative research by Motivaction among the general public, customers (consumers and businesses), suppliers and indirect channels whether themes and topics are still relevant to them. Each quarter we check with the public, private individuals and corporate customers how we score on the three most important material themes. Among the other stakeholders we test through regular dialogue whether the topics that are important to them are still relevant or whether changes have occurred.

Reporting process
The internal working group is composed of 19 senior management members and employees nominated by the Board of Directors. Together they represent all of our business units. The working group was responsible for determining the structure of the report, the process of identification and prioritisation of the material themes and the delivery of qualitative and quantitative data. The working group then verifies the data they delivered annually through their own or other teams. For some of the data the sources are monitored by the project coordinator before we provide it to the auditors Ernst & Young LLP (EY). Two directors reviewed a draft version and approved the final version.

Objectives regarding the reporting policy
Our goal for this reporting year was to further embed integrated reporting in the organisation and to professionalise the process. We have started with the integration by setting up the aforementioned internal working group, through which all business units were involved in the report. A part of the professionalization was also to ensure continuity. We did this by preparing a report protocol, which should work to our benefit next year and beyond. We also started collaboration with a software company to develop an integrated reporting tool. Besides an efficient method of data collection and version control, this tool can also provide insight into the connectivity between objectives, programmes and results. This may provide more insight into the impact of strategic decisions. Finally, we want to meet the changing information needs of stakeholders, not once a year but throughout the year, to keep them abreast of important developments. Last year we announced that we would develop a new interactive platform in the course of 2014 which was meant to replace our current news centre. We have not managed to do this yet. We expect to launch this platform in 2015. We did manage to start the process of including strategy progress in the quarterly reports in order to determine the first steps to be taken towards continuous reporting, however.

Ensuring the quality of social data
All business units are responsible for sustainability aspects in relation to their activities. These aspects form a part of the strategic priorities. Environmental saving measures form a part of the strategic Build for the Future pillar and help customers to make sustainable choices a part of The Easiest Place to do Business pillar. The business units report progress on KPIs on a monthly basis to the Board of Directors during Business Review Meetings. We have some KPIs validated externally, e.g. environmental KPIs that fall under the ISO 14001 certification and the KPI for diversity through ‘Talent naar de Top’ [Talent to the Top]. Vodafone Netherlands reports to Vodafone Group Plc. twice a year on its sustainability performance. Vodafone Group then checks if the data was delivered accurate. Risks and opportunities related to sustainability are identified within reputation and stakeholder involvement programmes. We have been using a reporting protocol since 2014-2015. This states in which manner we report this information in the annual reports, from which sources the information originates from and how we calculate the quantitative data.

Measurement methods and data collection
The data in this report is based on measurements, calculations or third-party submissions. We also consulted various systems:

  • Quantitative data of employee data: HR SAP data management systems.
  • Financial data: collected via SAP data management system, then consolidated through Hyperion Financial Management software
  • Quantitative data on environmental data: we merged several sources, including third parties, in Excel, e.g. electricity consumption.
  • Qualitative data: interviews and questionnaires based on the GRI indicators (sent by e-mail to the relevant persons)

In the captions under the tables and graphs we indicate what the figures are based on. We also indicate whether there are any changes in measurement methods and definitions, whether we use estimates or if there are limitations in the data.

Changes compared to previous reporting years

  • The KPI diversity in the chapter on Our Employees and the KPIs in the chapter on Our Image have changed. See the relevant chapters for an explanation.
  • A new KPI has been added to Our Technology: growth in fixed communication services and the target setting 2014-2015 of the KPI integration of IT systems was changed.
  • The KPI ‘Promotion of self-service’, on which we reported in our 2013-2014 report, was not measured because we have since achieved the target and there is not much more to improve here.
  • In the CO2 footprint (in ‘Our Technology), we put the CO2 emissions from electricity consumption in scope 2 on zero as of 2013. This is because we use wind power as of 1 April 2013.
  • Changes in other facts and figures are given in footnotes.

Assurance policy
This report has been verified by Ernst & Young Accountants LLP (EY). EY issued an assurance report with limited assurance. We had this report verified in order to increase its reliability for stakeholders. The Director of Corporate Affairs & Strategy was involved with the process of obtaining assurance.

Vodafone Netherlands and EY have an independent relationship relative to each other. EY does not perform any other work for Vodafone Netherlands other than the verification of this integrated report.

The financial information we provided is based on the annual financial statements of Vodafone Libertel BV for 2014- 2015. Vodafone has instructed PricewaterhouseCoopers (PwC) to audit the annual financial statements of Vodafone Libertel BV for 2014-2015. At the time of publication of this report the audit was not completed yet.

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This article is composed by Floor Klein, Barbara Jongerden and Joost Galema
Joost-Barbara-Floor
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