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The context for our CR program

Our approach to CR is driven by a series of broad contextual factors, and by the way our strategy and business model interact with our main stakeholders.

Contextual challenges and opportunities

We operate in markets with widely varying levels of socio-economic development. This is illustrated by the chart below which sets out the UN Human Development Index (HDI) for the societies we serve.

In markets with a low HDI, our mobile services are characterized as a ‘lifeline’ helping to facilitate basic connectivity and, increasingly, also providing a gateway to health, education, agricultural and financial services for the first time. Here our priorities include coverage and reliability of our services, and the provision of ‘services for society’. In markets with higher HDI, issues such as privacy and freedom of expression, the environment and online safety are seen as more important. 

These contextual characteristics also give rise to a series of structural challenges and opportunities, and examples are provided here.

Corporate strategy

Our strategy has six key objectives, and our CR approach is closely aligned. In particular, our CR approach can help to deliver on Digital Leadership, New Revenue Streams and World Class Operations.

Business model/value chain

Our value chain is set out in the diagram opposite, together with certain key metrics to illustrate our scale and scope.

The interplay of our business model and value chain within the market context, and the needs of our stakeholders gives rise to a series of risks and challenges, as well as opportunities. The more commercially relevant risks are set out in detail in our Form 20-F. CR-related issues, risks and opportunities are set out in the remainder of this report.

Capital Flows

Our Approach diagram shows the categories of capital as set out in the IIRC’s guidance on integrated reporting. For VimpelCom, our value creation process, and the impact that it has on the ‘stocks’ of these six ‘capitals’, can be summarized as follows. There are links to sections of the report that provide further information:

Financial capital

We use financial resources, including reinvestment of profit generated, to influence the value across the capitals as guided by our strategy, for example through investment in our networks, and training of our employees. Financial value is generated for our stakeholders, including the providers of financial capital, through dividends and other payments. Further information on our financial performance is provided in our Form-20F.

Human capital

We affect human capital through the recruitment of new talent, through training and development programs, as well as through the downsizing of operations, in accordance with our strategy and business performance.

Natural capital

We influence the consumption of natural capital mainly as a consequence of the materials and energy required to manufacture the network equipment and mobile devices that underpin our services, as well as the energy consumed by the operation of networks and other buildings. Our operations also generate impacts on natural capital which can be positive (using ICT services to reduce material consumption, or travel), or negative (carbon emissions resulting from network operation). 

Manufactured capital

We impact on the level of manufactured capital through a combination of further investment to improve our physical networks, together with the effect of network sharing, tower sales and outsourcing agreements. Our strategic objective of portfolio and asset optimization will drive a more asset-light network approach in the future.

Social and Relationship capital

We rely on building positive relationship capital with a variety of stakeholder groups to deliver our business, and this includes key relations with government (who provide licenses and spectrum) and business partners such as OTT players, and the communities which host our facilities. This enhances our ability to provide services that create social capital in the markets where we operate, through increased connectivity, and applications such as mobile financial services, or our flagship program, ‘Make Your Mark’. 

Intellectual capital

We influence the value of our intellectual capital through investment in developing our services, our engagement with vendors, and our programs with digital innovators through programs such as Make Your Mark. We invest in knowledge systems to support our employees’ effectiveness, and look to improve our operating licenses to enhance our ability to provide services.

UN Human Development Index 

  • CR reports
    Approach to CR
    CR strategy
  • CR videos
    Make Your Mark
    Introduction
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