2022 Sustainable Business Report

32 | SAFARICOM SUSTAINABLE BUSINESS REPORT 2022 KPI SUMMARY OUR STAKEHOLDERS OUR MATERIAL TOPICS OUR BUSINESS This chart demonstrates how all factors have contributed towards Safaricom’s ‘True Earnings’ for this period. Most noteworthy was the growing contribution from social externalities, particularly through the social value created by M-PESA which grew and evolved. Throughout the period, the greatest contribution to ‘True Earnings’ came from the economic value created through Safaricom’s operations and capital projects, whereas the negative environmental externalities, though recognised as a material topic, continue to have minimal impact. The economic impact made through our operations is the greatest contributor to the value we create and has increased by 8.60% since FY21. The value created through operational expenditure increased by 9% in the year under review, with the value created by capital expenditure increasing by 13%. This was anticipated as the overall capital expenditure for FY22 increased by 13%. OUR ENVIRONMENTAL VALUE-ADD The overall negative environmental impact on Safaricom’s ‘True Earning’s increased by 25% from FY21. The largest contributor to value erosion was due to carbon emissions. This was due to infrastructure expansion and increased Scope 3 emissions as COVID-19 lockdown restrictions were lifted and business travel resumed. To align with best practice, the KPMG True Value Assessment also updated the social cost of carbon to reflect the latest climate change statistics. During FY22, we increased the scope of reporting to the regions where our regional offices, retail shops and Mobile Switching Rooms (MSRs) are located. The KPMG True Value assessment further updated financial proxies to align to more a current representations of impact assessments related to water in Kenya. In FY22, we recycled 88.1% of the solid waste collected from our own operations, including paper, organic and plastics. Of this amount, 11.9% could not be recycled as it included items like diapers and face masks which pose threats to health. KPMG updated the quantification of waste based on best practice. Waste quantifications were 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. OUR IMPACT ON SOCIETY Regrettably, there were two recorded third-party fatalities in FY22. Our thoughts and condolences go out to the grieving family and friends of the deceased. We had five fewer lost-time injuries as compared to last year. M-PESA continued to create value for society with a 14% increase in societal value Y-o-Y. The KSh 275 billion worth of societal value created by M-PESA stems from our constant efforts to increase the positive impacts to society of the offering and provide relevant solutions to our customers. The social value of M-PESA remains a significant creator of value for Kenyan society, increasing by 14% in FY22. The major drivers of this growth were the increase in the numbers of customers and agents, a significant increase in the number of merchants, the increase in the average number of transactions per customer, as well as the increase in the average value of transactions made per customer. The greatest value TRUE EARNINGS (FY19-FY22) FY19 FY20 FY21 FY22 62 491 (865) (828) (948) (1 189) 317 602 221 501 74 698 338 530 241 449 68 676 344 580 251 097 69 649 374 220 284 517 Financial (Profit) Social Economic Environmental