Safaricom 2023 Sustainable Business Report

31 OUR STAKEHOLDERS KPI SUMMARY OUR MATERIAL TOPICS PATHWAY TO A PURPOSE-LED TECHNOLOGY COMPANY OUR BUSINESS HOW WE ARRIVE AT THESE NUMBERS Since 2014/15, Safaricom has used ‘True Earnings’ as a way of understanding and expressing the value that we create for society. KPMG first performed a True Earnings exercise for Safaricom in 2015 to identify our most material socioeconomic and environmental impacts and to quantify these in financial terms. Appropriate valuation factors were selected from KPMG’s comprehensive database which is sourced from global academic databases. Qualitative primary research enabled us to complete this exercise and to ascertain the social value created by our services, namely, M-PESA. To quantify this social value, principles from the Social Return on Investment (SROI) and Change Methodology principles are leveraged to quantify the social value created through M-PESA. More detail regarding the 2014/15 True Earnings exercise can be accessed at: Safaricom_True_Value_brochure.pdf Since the initial True Value assessment, assumptions were adjusted to reflect changes in the operating context and our product offerings. In 2020/21, the primary research was reperformed to ensure that the assessment accurately incorporates the impacts experienced by Kenyan society. Furthermore, the model utilises informed assumptions which are based on primary and secondary research. These assumptions are interrogated internally and confirmed to be the most appropriate within the specific Kenyan context. In future, we will need to continue to revise and update the model at specific intervals to reflect the changes in our operating context and the evolution of our product offerings. CARBON EMISSIONS Carbon emissions released into the atmosphere have a direct negative impact on societies and the environment through the effects of climate change. Our emissions are assessed against the social cost of one ton of CO 2 e to quantify the value of erosion due to the company’s carbon footprint. WATER All businesses consume water, which in many regions is an essential, increasingly scarce resource with a broader social and economic value that exceeds the tariff paid for it. To quantify the value eroded through water consumption, the True Value Methodology quantifies the commercial consumption of water against the social cost of water, water scarcity and water stress. The 2023 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. TRUE EARNINGS