Why Vodafone is a Responsible Minerals Front Runner

Vodafone is striving to deliver its services securely and responsibly – while maintaining the trust of its customers. Through such a commitment, it must maintain that it acts ethically, lawfully and with integrity wherever it operates, supported by the corporate transparency programme.

Within that comes its approach to sourcing 'conflict minerals' responsibly – and complying with disclosure regulations.

Vodafone – a responsible minerals front-runner

Following a recent report by non-profit organisation Development International identified Vodafone as a 'Responsible Minerals Front-Runner' for adhering to standards set out by the SEC and Europe's OECD.

The analysis confirmed that as a 'Front-Runner', Vodafone is "currently leading the charge by investing in high-quality conflict minerals due diligence and reporting and achieving full compliance to SEC regulations and conformance with OECD recommendations."

It also confirmed that Vodafone has submitted Conflict Minerals reports and made Specialised Disclosures to the SEC in the past two years. Vodafone has published annual Responsible Minerals Reports, using OECD's five step framework to report Conflict Minerals. Vodafone's ESG reports have also discussed Conflict Minerals, in addition to cobalt.

With the EU Corporate Sustainability Due Diligence Directive requiring compliance by no later than July 2027, it will become even more important for companies to understand their supply chains and ensure transparency with regulators and the public.

What are conflict minerals?

Tin, tantalum, tungsten and gold are often referred to as conflict minerals, as they are sometimes mined in conditions of conflict or forced labour. Or the proceeds of selling these minerals can be used to finance armed groups.

Collectively these minerals are known as the '3TG' and they are used in a range of everyday products including electronic devices like mobile phones.

Tin, for example, is often used to solder electronic components. Gold and tantalum are used in connectors or capacitors - and tungsten may be used in printed circuit boards.

Knowing whether a phone has been made from minerals linked to funding violence or human rights abuse can be difficult for consumers to know. Telecoms companies are put to task to make sure that the phone they make themselves, or what they buy from manufacturers, only contain responsibly sourced minerals.

As Vodafone sell a wide variety of products which could potentially contain one or more of the 3TG's, as well as mobile phones, it also sells tablets, smartwatches, broadband routers and TV set-top boxes.

Vodafone's Internet of Things (IoT) service relies on small electronic transmitters and so do Vodafone's Automotive anti-theft car tracking devices.

A majority of devices Vodafone sell are made by Original Equipment Manufacturers (OEM) – the well-known global brands. These companies report on their own sustainability performance, including the origin of the metals they use.

It also sells devices under Vodafone's own brand and these are mostly designed and made by companies classed as Original Design Manufacturers (ODMs). Vodafone has some influence over how these ODM products are produced, but outside of some Vodafone Automotive products, it does not own or operate the factories producing ODM products.

It's these ODMs products and the products Vodafone manufactures that are the focus of its efforts on the 3TG conflict minerals.

Vodafone: Sourcing minerals responsibly

Vodafone is committed to source minerals responsibly. Its aim is to ensure that none of the products or components it buys contain 3TG metals that have helped to fund conflict or other risks.

Through annual reviews into how its suppliers buy and make products, which will be sold or supply under its own brand. Next, is to look to determine if any products are likely to include the metals in its 'In-Scope Products'. For these, Vodafone holds some degree of influence on how they are manufactured, such as specifying certain criteria for the materials, parts and components used.

In 2023, these included connected home devices like routers, modems and set-top boxes, plus mobile broadband dongles and IoT devices. The In-Scope automotive products included alarm sirens and intrusion sensors, parking assistance products and GPS tracking systems.

3TG metals used in the components of the In-Scope products are processed by many smelters in a complex and often opaque supply chain. The process starts with minerals extracted from mines, then smelters buy these minerals and process them into usable metals.

Those smelters and refiners - and the mines from which the minerals are originally sourced – are often many steps away from Vodafone in the supply chain. To find the origin of any 3TG metals used in its In-Scope products, Vodafone conducts a Reasonable Country of Origin Inquiry (RCOI) alongside detailed due diligence. The RCOI determines whether minerals originate in the Democratic Republic of the Congo (DRC) or an adjoining country

The contracts with In-Scope suppliers require them to report on their use of the 3TGs and, in turn, Vodafone makes its suppliers do likewise. This obligation cascades down the supply chain until the origin of 3TG metals in the products can be identified.

The Responsible Minerals Report 2023 sets out in more detail how and where Vodafone source its minerals, along with due diligence framework and efforts to further mitigate risks.

While also explaining how it adopts a similar approach to responsibly sourcing cobalt, which is mainly used in lithium-ion batteries in some of its In-Scope products.

How do Vodafone comply with disclosure regulation?

Vodafone complies with relevant disclosure regulations - both in Europe and the US.

The EU's Conflict Minerals regulation was introduced in 2021. It aims to ensure that EU importers of 3TG are meeting international responsible sourcing standards, set out in the OECD's 'due diligence' guidance. Vodafone does not import minerals, so the EU regulation is not applicable to it.

But telecom operators like Vodafone that are publicly listed in the US are also legally required to carry out an annual 'country of origin' inquiry and report their findings to the Securities and Exchange Commission (SEC).

Vodafone relies on the data given to it by suppliers. Sometimes, it identifies smelters in the supply chain that don't conform with the Responsible Minerals Initiative (RMI) Database. It then engages with suppliers to encourage their smelters to comply with the RMI.

If they don't, Vodafone escalates the issue or and can remove them from the supply chain.

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