2022 Sustainable Business Report

29 PARTNERING FOR GROWTH: TRANSFORMING LIVES | KPI SUMMARY OUR STAKEHOLDERS OUR MATERIAL TOPICS OUR BUSINESS UPDATES TO THE QUANTIFICATION OF SAFARICOM’S TRUE VALUE ASSESSMENT: Carbon emissions: The reason for the increase in value erosion from carbon emissions is due to changes in the social cost of carbon which is set at a global standard. As climate change is a fluctuating scenario, the social cost of carbon used for True Value represents a best practice for quantifying the impact of CO 2 . To illustrate a comparative year-on-year result, the impact of carbon emissions has been adjusted from FY19-FY22 (see table 'our True Earnings' on page 32) Water: All businesses consume water, which in many regions is an essential, increasingly scarce resource and has a social and economic value that exceeds the tariff paid for it. The True Value Methodology identified the commercial consumption of water as having a negative societal impact and analysed water consumption against the social cost of water, water scarcity and water stress, to quantify the value eroded through water consumption. The 2022 quantification of Safaricom’s water consumption has been updated to represent the social cost of water within Kenya based on recent literature. Waste: Waste disposal has a negative cost to society. The quantification of this impact is based on the social cost of handling one ton of waste within a region. Although recycling allows for waste to be reused, there is still a negative cost to society related to the production of materials from recycled content. By analysing the waste categories applicable within a business, the KPMG True Earnings Bridge can quantify the value eroded due to waste generation. The 2022 quantification of Safaricom’s waste consumption has been updated to represent the social cost of waste within Kenya based on more recent literature. Definitions True Value: A three-step methodology that enables companies to (i) assess their ‘true’ earnings including externalities, (ii) understand future earnings at risk and (iii) develop business cases that create both corporate and societal value. True Earnings: The first step of the True Value methodology, which quantifies and monetises a company’s material externalities. Total Economic Value: The nature and magnitude of the contribution Safaricom makes to the Kenyan economy. Induced economic impact: Our operational and capital expenditure creates additional employment and benefits our suppliers’ employees. A proportion of the additional income generated in this way is spent on the consumption of goods and services. Through linkages and multiplier effects, this positively impacts the broader economy by stimulating additional demand for the products and services produced within the economy. Indirect economic impact: Proposed additional direct expenditure also adds more widely to economic activity in general through the additional inputs purchased from suppliers. The businesses impacted along the supply chain would then need to increase their production and employment, thereby also generating increased economic activity and employment and in turn stimulating additional demand for goods and services along their own supply chains and so on.