Safaricom - 2021 Sustainable Business Report

29 SAFARICOM SUSTAINABLE BUSINESS REPORT 2021 //// STANDING TOGETHER: GOING BEYOND / OUR MATERIAL TOPICS / OUR STAKEHOLDERS / KPI SUMMARY It is also worth noting that the increase in spend by the Safaricom and M-PESA Foundations increased the value created through strategic social investments during the year. The overall negative environmental impact on the Safaricom True Earnings increased by 3% from FY20. The primary driver of the increase was a 13% increase in the social value of carbon emissions. Carbon emissions increased by 10.5% YoY and there was an increase in the Social Cost of Carbon which ultimately increased the total value of carbon emissions in the True Value model, offsetting the positive impact of the decrease in the water consumption. All financial information can be found in the 2021 Annual Financial Report, including taxes paid by Safaricom and actual direct employment. Both capital and operational expenditure have been processed via the Kenyan national economic impact assessment model, set up to accept the economic structure of the communication industry according to the Kenyan Social Accounting Matrix (SAM). WHAT WE FOUND FROM OUR FY21 M-PESA SOCIAL VALUE UPDATE Based on the KPMG True Value Bridge a total of KSh 242 billion of social value has been created through M-PESA. This is the social value created for our agents, merchants and customers in monetary terms. These three stakeholders have been identified as key, given that they receive the most material social value from M-PESA. On this basis, we reperformed the primary research for these stakeholder groups in order to update the impact maps for the Social Return on Investment assessment which is the methodology used to quantify and evaluate the social value for M-PESA. Based on the FY21 True Value assessment of social value created through M-PESA, it can be noted that customers (61%) continue to experience the most social value, followed by merchants (23%) and agents (15%). In comparison to FY20, although most of the value is still attributed to customers, the proportion of social value created for customers has decreased from 83% to 61%. Furthermore, the proportion of merchant value has increased from 5% to 23% and the proportion of value for agents has increased from 12% to 15%. The reasons for these shifts in the proportions is explained for each stakeholder below. SOCIAL VALUE CREATED FOR CUSTOMERS M-PESA, TRANSFORMING LIVES Although M-PESA was designed as a commercial product, it is clear that the impact of the product on segments of Kenyan society is significant. This is largely due to the way in which M-PESA has been able to identify, respond to and meet customer needs that are not traditionally fulfilled by telcos. The continuous adaptation of the platform highlights Safaricom’s customer centric approach whereby the business is aware of the realities of their consumers as they continuously innovate to develop / enhance products and services to make their lives easier. Customers have consistently derived the most social value from the platform. The social value for merchants and agents has increased over time but the social value created for customers decreased in FY21. These changes have occurred as a result of updates to certain assumptions and proxies when the primary research was reperformed in the current period. The pie chart on the following page illustrates the most significant impacts experienced by customers that are attributable to M-PESA. The increases in personal savings as a result of time and cost savings as well as increased receipt of money and its control create the most social value for customers. In addition, improved personal wellbeing as a result of being able to access credit to purchase personal items creates additional social value. It is important to highlight that the methodology also considers negative impacts. M-PESA SOCIAL VALUE (FY20 VS FY21) CUSTOMERS AGENTS MERCHANTS 61% 83% 5% 12% 15% 23% FY21 FY20