2022 Sustainable Business Report

98 | SAFARICOM SUSTAINABLE BUSINESS REPORT 2022 KPI SUMMARY OUR MATERIAL TOPICS OUR BUSINESS OUR STAKEHOLDERS Most institutional investors are concerned about increased regulatory risk, especially the mobile termination rate (MTR) and impact of tax changes on the earnings. Other areas of concern for institutional businesses include the macroeconomic environment, particularly the increased depreciation of the Kenyan Shilling and the concomitant inflationary pressures on business and consumer wallets. We address these concerns through close engagement: Following the government’s partial lifting of COVID-19 restrictions in October 2021, we increased investor engagements via virtual conference calls and one-on-one physical meetings, meeting with 236 funds in FY22 in a hybrid mix of virtual and physical meetings. We ensure that our investor relations dashboard is up to date so that investors can easily access the latest financial statements and other earnings materials. We have also established dedicated contact channels whereby we respond to shareholder telephonic, email and message- based enquiries within set timelines of 24 – 48 hours governed by internal Service Level Agreements. In our interactions with investors, we explain our four key strategic pillars which are the foundation of transforming into a technology company by 2025: • Strengthen the core: Management’s initiatives focus on defending voice through CVM initiatives, democratising data through driving affordable 4G devices (a significant opportunity to grow mobile data) and evolving channel roles to serve customers better by aligning with their needs. • To be a financial services provider: The focus under this pillar is now pivoting to financial health more than financial inclusion. Investors can see management initiatives to enhance financial inclusion as we now explore the next growth phases going forward and evolve M-PESA into a broader digital platform, offering universal payment network and integrated business solutions. To achieve this, we plan to roll out products that promote a savings culture, provide working capital to consumers and businesses, and increase access to insurance and wealth creation subject to regulatory approvals. • Accelerate new growth areas: Management is proactively allocating investment and resources to scale new growth opportunities not just in Kenya but beyond. These new areas include digital business, IoT, ICT, M-PESA and DigiFarm acceleration as well as the Ethiopian expansion. • Achieve cost leadership: Management’s initiatives are increasing and enhancing productivity. As we transform into a technology company, our Agile transformation journey offers an opportunity to revisit our processes and operating models. In pursuit of this, we have realized operational efficiencies and cost savings from smart procurement, and these savings will go into fuelling growth into new areas. EVALUATING OUR ESG PERFORMANCE Our shareholder base has been growing each year with intensified interest coming from impact investors who use an ESG lens as part of their analysis process in stock and portfolio selection, as well as in assessing risk control. Our alignment with the UN SDGs, nine of which we have prioritised, is of particular interest to impact investors. Against this backdrop, we commissioned S&P Global to conduct a valuation of our ESG performance which we are currently reviewing. We have also engaged extensively with this group of investors regarding the Environmental, Social and Governance Disclosures Guidance Manual published towards the end of 2021 by the Nairobi Securities Exchange (NSE). The manual provides a granular, tactical approach to ESG reporting that meets international standards on ESG reporting, ranging from expectations related to the responsibilities of the Board, Chief Executive Officer and sustainability managers, to guidelines related to stakeholder engagement, the principles of materiality and the incorporation of key performance indicators into reporting processes. FUTURE FOCUS • Give more visibility to investors on our Ethiopian expansion by enhancing our disclosures. • Publish a fully integrated report by ensuring the timing of data collection/writing of the sustainability report coincides with the publication of the annual report. This will enhance ESG disclosures further in the annual report. • Promote clarity of understanding of our strategy, business and expansion into Ethiopia to investors by hosting our first Investor Day. • Grow our shareholder base by targeting tech, ESG-focused investors and local investors.