MSCI upgrades VEON to 'AA' ESG Rating
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Insights
An upgrade in the Environmental, Social and Governance (ESG) rating of a company such as VEON by MSCI is a significant event for investors who prioritize sustainable and ethical investment opportunities. The elevation to an 'AA' rating from 'A' reflects VEON's commitment to improving its ESG practices, which can have several implications for the business and its stakeholders.
From an ESG perspective, such a rating upgrade typically indicates better risk management and a more sustainable long-term strategy. Companies with high ESG ratings may have access to cheaper capital, as they are often seen as lower risk by investors. Moreover, they might attract a broader investor base, especially with the increasing interest in socially responsible investing. This could potentially lead to a more stable shareholder base and could also provide some insulation against market volatility.
VEON's above-average score in labor management suggests that it could benefit from higher employee engagement and satisfaction, which can translate into better productivity and innovation. The focus on good corporate governance, highlighted by an independent Board of Directors, is another positive signal to investors, indicating robust checks and balances which can prevent corporate malfeasance and protect shareholder interests.
VEON's position as a 'Leader' in the telecommunications sector, according to MSCI's ESG rating, highlights the company's competitive edge in a rapidly evolving industry. The telecommunications industry is increasingly scrutinized for its ESG practices, given its significant environmental footprint and the critical nature of data security for consumers.
VEON's adherence to recognized data security standards and its practices in end user data management are crucial, as data breaches or misuse can lead to significant reputational and financial damage. The company's exit from Russia, as noted by MSCI, may also be seen as a move to mitigate geopolitical and ethical risks, which can be particularly relevant for global telecommunications companies operating in diverse political landscapes.
The emphasis on digital inclusion through the '4G for all' initiative could foster increased market penetration and user loyalty, which are important factors for growth in the telecommunications sector. Such initiatives can also help in achieving financial inclusion, especially in the emerging markets where VEON operates, potentially leading to long-term customer retention and revenue growth.
VEON's upgraded ESG rating and strategic focus on sustainability may positively influence consumer perception and brand value, especially among the increasingly socially-conscious consumer base. This could lead to a stronger market position and potentially higher market share as consumers and businesses alike prefer to associate with companies that demonstrate ethical practices and corporate responsibility.
Investor sentiment can also be impacted by such ESG upgrades, as it may signal improved management quality and operational efficiency. In the long term, VEON's dedication to ESG principles could result in enhanced competitiveness and resilience, which are key drivers of shareholder value. However, it is important to monitor whether these improvements will translate into tangible financial performance and whether VEON can sustain its ESG leadership in a dynamic industry.
Amsterdam, 4 March 2024: VEON (NASDAQ: VEON, Euronext Amsterdam: VEON), a global digital operator that provides converged connectivity and online services, announces that, MSCI has raised the Company’s Environmental, Social, and Governance (ESG) rating to 'AA' from 'A'.
This upgrade positions VEON within the ‘Leaders’ category amongst the 131 telecommunication services companies evaluated by MSCI, demonstrating our commitment to sustainable and ethical business operations.
“Our 'AA' rating from MSCI demonstrates VEON’s success in integrating and implementing a strategy aimed at making a positive societal impact, ensuring ethical governance and contributing to environmental stewardship. This upgrade and our position in the ‘Leaders’ category for our industry reflects VEON's persistent efforts to incorporate sustainable and responsible ESG practices across our operations, raising the bar consistently and with dedication.
“I am particularly pleased to see that VEON has scored above the industry average for labour management, with MSCI noting our focus on employee engagement and satisfaction. The ESG rating agency also named VEON’s exit from Russia as a factor contributing to the rating upgrade. MSCI also noted VEON’s good practices in end user data management, noting that our data security framework is on par with industry peers and features certification to widely recognized data security standards.
“Finally, corporate governance is another area where VEON excelled in comparison to our peers, according to MSCI, with a majority independent Board of Directors. This Board makeup reflects not only globally accepted good practices, but also the fact that VEON has no controlling or majority shareholder,” said Kaan Terzioglu, VEON Group CEO.
VEON’s focus on “4G for all” and digital services resulted in significant improvements in digital and financial inclusion in the 6 markets where our Group companies operate: Pakistan, Ukraine, Bangladesh, Kazakhstan, Uzbekistan and Kyrgyzstan. Our digital operators amplify their positive social and environmental impact, prioritizing inclusive workplace practices and broader initiatives that drive diversity and inclusion, as well as supporting environmental sustainability. VEON remains committed to maintaining high standards in ethical and transparent of governance, serving a broad group of stakeholders.
For further details on VEON and our ESG practices, please visit our website at https://www.veon.com/we-are-veon/sustainability.
About VEON
VEON is a digital operator that provides converged connectivity and digital services to nearly 160 million customers. Operating across six countries that are home to more than
Disclaimer
This release contains “forward-looking statements,” as the phrase is defined in Section 27A of the U.S. Securities Act of 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as amended. Forward-looking statements are not historical facts, and include statements relating to, among other things, VEON’s strategy and sustainability initiatives. Forward-looking statements are inherently subject to risks and uncertainties, many of which VEON cannot predict with accuracy and some of which VEON might not anticipate. The forward-looking statements contained in this release speak only as of the date of this release. VEON does not undertake to publicly update, except as required by U.S. federal securities laws, any forward-looking statement to reflect events or circumstances after such dates or to reflect the occurrence of unanticipated events.
Contact
VEON
Hande Asik
Group Director of Communications
pr@veon.com
Faisal Ghori
Group Director of Investor Relations
ir@veon.com
FAQ
What is VEON's current ESG rating according to MSCI?
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