True Value & Sustainability – Safaricom Value Is 6% Of Kenya’s GDP

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People depositing and withdrawing money at an Mpesa shop. Image from http://ow.ly/ZkvxA

True value and sustainability reporting

Sustainable investing has the power to create change. Audrey Choi, head of Morgan Stanley’s institute for sustainable investing said, “Today we have more choices and more opportunity to make our voices heard than ever before. And collectively, we have the power to change the way companies and other institutions approach environmental, social and governance issues.”

In a recent discussion at TED talks, she cites studies showing that investing in companies with strong sustainability strategies can result in the same if not better returns than investing in those that don’t.

Global consultancy firm, KPMG recently released a report dubbed True Value report, the first company to do so in Kenya that intricately quantifies the value that mobile service provider Safaricom has delivered to the Kenyan economy. From the report, Safaricom generated a total of Kshs 315 billion in revenue during the 2014/15 financial year which accounted for a total of about 6% GDP in total.

People depositing and withdrawing money at an Mpesa shop. Image from http://ow.ly/ZkvxA
People depositing and withdrawing money at an Mpesa shop. Image from http://ow.ly/ZkvxA

The True Value report aims to discover an organizations value to both the economy and society beyond traditional financial reporting. It allows companies to identify how business leaders can better understand the impact their organizations have on an economy, said Neil Morris, director of KPMG.

Safaricom has adopted an approach recommended by the GRI G4 guidelines that has focused their reporting on issues of greatest concern and importance to Safaricom. They include material matters that have been organized into four major dimensions that better reflect how they manage their business, their network quality, technological innovation, governance, risk and regulation and their environmental impact. They are:

  • Network quality: Network quality is a key component in their business. The quality and availability of their network is an essential part of their business since all of the services they provide to their customers are delivered through the network platform. Their network is on second generation (2G), third generation (3G), Fourth generation (4G) and worldwide inter-operability for microwave access (Wimax) technology.
  • Innovation: In a highly competitive business enterprise in our current day and age, if a company or organization is not constantly innovating, they are effectively setting themselves up for stagnation and subsequent death of their business. Innovation platforms that they have come up with like M-Pesa and YOLO (Youthful Original Local Outstanding); an objective that appeals to attribute to increased youth customer engagement programs such as Active8 and Campus Konnect.
  • Governance, risk and regulation: Without the correct corporate checks and balances in place, the positive reputation and trust that a company enjoys could be damaged. All organizations, companies and institutions should be run in an ethical, transparent and accountable manner by having robust governance processes and structures in place, along with guiding principles and clear lines of responsibility.
  • Environmental impact: this is a key component that most businesses fail to comply to. There is a need for companies to take social and moral responsibility to manage their environmental impacts very seriously. Environmental considerations should be an integral part of a company’s overall strategy and Safaricom has taken steps to ensure that they manage their emissions, raise more awareness on E-waste (this is discarded electrical or electronic devices and appliances), improving on water and waste management in their facilities among others.

To make sure that the findings are accurate, KPMG utilized data from a number of different sources including; industry values in terms of revenue from BMI, income statements from the 2014/15 financial year, national accounts and labor force for Kenya from the economic intelligence unit (EIU). This assessment values Safaricom’s ‘True Earnings’ – a monetization of Safaricom’s financial, economic, social and environmental impacts for the most recent financial year.

KCB’s Head of Corporate and Regulatory affairs Judith Sidi Odhiambo gave a journey of how the KCB group has ensured sustainability in their management affairs, services and in the products they deliver. One of the key components in achieving sustainable reporting is in how a company follows through the Sustainable Development Goals.

The 2Jiajiri program that was recently launched in a bid to provide over 10,000 beneficiaries with the vocational and enterprise skills necessary to drive wealth and employment creation is one of the initiatives towards the fulfillment of the SGD goals. The sustainability agenda priority remains through their commitment in achieving sustainable finance. She also pointed out how ignoring the SGDs and the goal they want to achieve is putting the future earnings of a company or organization at risk.

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