Safaricom 2023 Sustainable Business Report

32 OUR STAKEHOLDERS KPI SUMMARY OUR MATERIAL TOPICS SAFARICOM SUSTAINABLE BUSINESS REPORT 2023 OUR BUSINESS This chart shows year-on-year movements in our value creation across the scoped impacts (economic, social and environmental). Most noteworthy was the growing contribution from social externalities, particularly through the social value created by M-PESA which grew since 2022. Economic value created through Safaricom’s operations and capital projects resulted in the greatest value creation during 2023. Economic impact increased by 4% 3 since FY22. The value created through operational and capital expenditure increased by 3.42% 2 and 2.54%, respectively in 2023. This was anticipated as the overall capital expenditure for FY23 increased by 13%. Though recognised as a material topic, value erosion through environmental externalities, continues to have minimal impact. OUR ENVIRONMENTAL VALUE-ADD The overall negative environmental impact on Safaricom’s ‘True Earnings’ decreased by 4.27% from FY22. The largest contributor to this value erosion was carbon emissions which decreased by 7.1%. This was primarily due to a decrease in Scope 1 emissions following the rollout of solar power and energy efficiency improvements. Additionally, a 2.5% increase in Scope 3 emissions can be attributed to increased air travel during FY23. Last year, 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 FY23, total e-waste and office waste collected and recycled amounted to 96.6% of the total solid waste. The remaining 1.4% composed of waste to landfill. This could not be recycled as it included items like diapers and face masks which pose threats to health. Waste incinerated amounted to 2.1%. 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. OUR IMPACT ON SOCIETY This year, there were no recorded fatalities. Additionally, we have had half as many loss-time injuries compared to last year. During FY23, M-PESA created KSh 325 billion worth of societal value – a 17.66% year-on-year increase – reflecting our efforts to provide relevant solutions to our customers. The major drivers of this growth were the increase in the numbers of customers and the average number and value of transactions made per customers, a significant increase in the number of merchants, the increase in the value of transactions made through agents. The greatest value continues to be felt by customers, who benefit from their improved ability to manage and save money, lower transaction costs and reduced levels of theft resulting from not having to carry cash. Enhanced well- being comes with access to goods, services and opportunities as well as feelings of heightened safety and security. We aim to further transform lives by improving the well-being of our customers, agents, and merchants as the M-PESA service evolves over time. OUR ECONOMIC VALUE-ADD The graph on the following page provides a high-level overview of the annual contribution we made to employment. The numbers are derived from a Kenya-specific Economic Impact Assessment (EIA) model and include direct and indirect contribution to employment, as well as the induced wider effects of employment in the economy. The positive social impact associated with the direct and indirect jobs sustained because of Safaricom has been included in the True Earnings bridge. TRUE EARNINGS (KSh million) Financial 73 658 69 640 493 770 241 980 284 516 (413) (1 189) 68 676 62 269 344 580 513 513 251 097 334 857 (509) (1 139) Economic Social Environmental FY23 FY22 FY21 FY20 338 530 3 FY22 value added from operations restated