Purpose Beyond Profit

East Africa’s Safaricom, on a mission to become a leading technology business, has taken a strategy around sustainability that involves continual upliftment of the whole community. Entering into several new partnerships that will advance its position around ESG, this is a growing business with a strong focus.

In Kenya, where innovation around mobile data and technology is some of the most advanced in the world, the landscape for the big players is highly competitive. Mobile network operators providing telephony, communication, data connectivity, money transfer, cloud storage, and much more are challenged by consumers to keep up with the rapid pace of development. For businesses, this is often one of the most challenging aspects around sustainability. How can you please customers, stay apace with technology, control cost, and have an impact beyond profitability? This is the conundrum for Safaricom, and one which it is so far able to manage better than most.

“We are committed to Transform Lives through our products and services,” says CEO Peter Ndegwa.

Operational across Kenya and Ethiopia, Safaricom has a customer network exceeding 42 million people and is listed on the Nairobi Securities Exchange (NSE). Annual revenues of around KES 298 billion ($2.5 billion) are generated through mobile communication subscriptions and the famous M-PESA product. Today, the company is aiming to become a fully-fledged technology company by 2025, supporting people when they want to connect with each other, with businesses and information, and with opportunities.

Safaricom customers enjoy 5G data plans and roaming connectivity alongside fixed broadband and much more. Businesses can take advantage of secure fibre, M-PESA for business, cybersecurity, and a product portfolio of financial services products from the likes of AAR Insurance.

In September, the company inked a new partnership with diversified financial service group Britam to bring new packages that include data and insurance products to drive improved financial security and inclusion. Labelled Data Plus, the offering is about more than simply data. Micro insurance products delivered through mobile network operators is a booming space, especially in Africa, with little infrastructure required beyond a feature phone and data connectivity.

“Safaricom remains keen on bridging the digital divide, and we do this by availing affordable data bundles and 4G devices, which empower Kenyans to leverage our extensive network coverage and enjoy the transformative power of the internet,” said Chief Consumer Business Officer, Fawzia Ali.

Evah Kimani, Britam’s Director of Partnerships and Digital, added: “We are delighted to partner with Safaricom, to offer customers innovative and affordable insurance solutions that safeguard their dreams and aspirations. Through this partnership, we aim to reach out to millions of Kenyans who do not have access to insurance protection against various risks that can affect their livelihoods and well-being.”

This is just the latest offering in a range of announcements which has seen Safaricom address needs of customers through innovation and technology.

INTEGRATING ESG

Success of Safaricom in its traditional markets is well-documented – the company is iconic in East Africa. but this is not just the result of quality products and service, it comes inexorably as a result of the company positioning itself as a community partner.

Safaricom’s ambition to transform lives is lived within the business and is demonstrated through the investments it makes into corporate social responsibility projects.

September saw the company partner with a group of Kenyan banks to secure a loan that would fund ESG-related schemes in the country. Standard Chartered Bank, Stanbic Bank, ABSA Bank and KCB Bank came together to provide KES 15 billion (potentially rising to 20 bn) which will be used to focus on reducing its emissions to reach Net Zero targets, tracking gender diversity, and monitoring social equality impacts.

“In line with our focus to advance our sustainable business agenda, this funding will unlock our ability to create more diversified investments that will support transformative investments in new technologies, systems and services that allow us to comprehensively manage our ESG footprint,” said CEO Peter Ndegwa.

Bringing ESG to the fore and embedding this culture within any business is no easy task. While the will is normally there, change is difficult for everyone – especially companies with thousands of employees across different divisions and geographies.

This good news came after another positive in August when the company was awarded for its climate initiatives. At the Environmental Sustainability Awards from Kenya Private Sector Alliance (KEPSA) and the United Nations Environment Program (ENEP), Safaricom was recognised for innovation across digital and green solutions that contribute positively to the climate, people, and profits. Particularly encouraging was the company’s deal with the Kenya Forest Services to plant five million trees by 2025, an initiative that will create 2,000 direct jobs and 5,000 jobs indirectly. Then there’s the recycling of 913 tonnes of e-waste as well as the successful recycling of 88.1% of the company’s solid waste across FY 2022. Safaricom also reduced carbon dioxide emissions by solarizing up to 1,400 of its network sites as it looks to become a net-zero emitting organisation by 2050.

“We are grateful that our efforts towards environmental sustainability are being recognised,” said Ndegwa. “Environmental consideration is critical to the success of our business and as such we have a robust strategy that is responsive to green growth and climate change interventions. This ensures that as a company we are producing and consuming responsibly. We also work with a wide array of partners on various environmental stewardship initiatives.”

In the same month, Safaricom invested more than KES 50 million in community projects in the central counties of Nyandarua and Laikipia. Through the Safaricom Foundation and the M-PESA Foundation, education, health, and environment projects will benefit 5000 people and 100 schools. Infrastructure renovations will continue to take place across school buildings, and associated technology and digital solutions will be delivered and advanced. Fruit tress will also be donated to drive reforestation and regreening drives.

“At Safaricom,” said Ndegwa, “we believe in the importance of investing in the communities around us, and we do this as a brand and through the Safaricom and M-PESA Foundations. Education is one of the areas we are keen to make an impact, and by investing in these schools in Nyandarua and Laikipia Counties, we are transforming lives and enhancing the learning outcomes of hundreds of learners.

“This tree planting exercise,” he added, “is part of our commitment to plant five million trees by 2025 and to be a net zero organisation by 2050. The school regreening programme on the other hand will support schools in revenue regeneration, improve food security and ecosystem services.”

FOUNDATIONAL SUPPORT

The Safaricom Foundation is a vital arm of the business and recently celebrated its 20^th anniversary. In that time, the division has invested more than KES 5 billion in community projects which have directly impacted more than eight million people.

To celebrate, Safaricom donated special packs to maternal units at hospitals around the country as well as food hampers for children’s homes. Ndegwa is understandably proud.

“In the past two decades, Safaricom Foundation has grown to become one of the biggest enablers of Kenyan communities. Whether through partnering with individuals on small investments that have a big impact, or implementing large-scale, long-term programs of nationwide scale, our purpose of transforming lives has always been at the core of the Foundation.”

Chairman Joseph Ogutu added: “As we celebrate 20 years of transforming lives, we have learned a lot and developed key insights into how we approach philanthropy. One key strategy that has defined our interventions is partnerships with experts in the fields we seek to create impact, and with the communities we aim to transform. As we look to the future and implement our 2023-2026 strategy, partnerships will remain important in our work as a Foundation.”

Looking forward from an ESG perspective, Safaricom has officially joined the UN Global Impact Forward Faster initiative which will assist in the acceleration of the 17 key Sustainable Development Goals to meet the 2030 Agenda.

This initiative is an attempt to bring businesses together within a community that takes action to drive positivity in gender, climate action, living wage, water resilience and finance and investment.

This progress is vital as, recently discussed by UN Secretary-General Antonio Guterres, there has been a slowdown in progress, globally, around the Sustainable Development Goals.

“We have taken up the challenge to fast-track key sustainability action areas as the 2030 deadline approaches. I am glad that we at Safaricom are shaping the narrative on the delivery of the SDGs which are key to reducing inequalities and making our planet better,” said Ndegwa.

“As much as we are doing a lot in short and long-term investments to integrate ESG into our business practices, there is still some way to go as global challenges such as climate change, the Covid-19 pandemic and conflicts have slowed down momentum on the achievement of some of the goals. As the private sector, we can collectively find ways to overcome the challenges through partnerships to fulfil our agenda,” he added.

The company’s core business combined with its commitment to upliftment continue to separate it from competition. FY 2023 numbers improved across almost all metrics with service revenue, messaging revenue, mobile data revenue, and M-PESA revenue on the up. Safaricom is an industry leader that moves with purpose beyond profit, and that makes it truly sustainable.