Telecommunications giant Safaricom believes that embedding green behaviour across the entire value chain can mean black ink, not just a better society and business longevity. In Kenya, the telco is seen as sustainability personified – it’s racking up profits, adopting ecofriendly practices and impacting lives at the same time.
Safaricom booked a net profit of Sh63.4 billion ($630 million) in the last financial year ended March 2019, marking the seventh straight year of profit upswings and cementing its spot as the most profitable firm in East Africa.
We caught up with the company’s Head of Sustainable Business and Social Impact Sanda Ojiambo to find out the role of sustainable practices in driving the bumper results.
Here are the excerpts:
Are sustainable measures adopted by Safaricom fuelling profitability or is the profitability that’s enabling the company to embrace sustainable practices? What comes first?
At Safaricom, we believe that our purpose is to transform lives. And so with that at the centre, it makes us look at different ways of doing business. We also believe in the 3Ps – purpose, people and then profit in that order.
And we strongly believe that if you do the right thing, the numbers will follow.
So in a nutshell, for us is first to be clear what our purpose is – which is to transform lives. Secondly, we want to be the kind of company that will serve Kenyans for the longest time, which is why we integrated, among others, the ninth sustainable development goal in our sustainable strategy.
So I can say progressively integrating SDGs (sustainable development goals) in our corporate strategies and having a clear purpose is helping drive our profitability.
Along the same line, what has been the return on investment in sustainable activities not only for the company, but for shareholders and customers as well?
Investing in sustainability practices yields a couple of things – we have gained a lot of proficiencies around certain things like energy savings, waste management, and removal of plastics from our retail centers among others.
In some instances, we’ve rolled out products and services that we believe demonstrate our commitment to SDGs, aligning them with people needs and the strategy has proved profitable. Still, we’re not yet at the stage that we envision for ourselves in terms of sustainability adoption; it’s an ongoing process, a journey. But what’s clear is that if we don’t take the sustainable business approach, we’ll not be in business for the next 100 years or so which really is our long term intention. We want to be around for the longest time, improving lives and making the society a better place.
Safaricom has been trialling wind turbines on two sites in Turkana as indicated in its Sustainability Report 2019. What’s the progress and what’s the expected benefit?
We have trialled two sites in Turkana; for us it has been an extension of our commitment to reduce reliance on fossil fuel energy sources. That said, the two pilots have been highly successful. We aim to continuously green our network. We are at a level perhaps not where we ideally like to be. But what’s important about the pilot is that it demonstrates the tough sustainable decisions that the company needs to make.
What’s the cost of setting up the turbines and are there plans to install more, now that you’ve been incrementally greening your network through solar?
In our area of business, green sites cost significantly more than the traditional sites. But the fact that we’re willing to do the trials, to demonstrates that it works and then use it as evidence to further look at how we apportion the Sh32 billion or so that we have committed to the network, demonstrates our long term commitment to further greening our network.
So if the pilot is successful then the lessons gathered will help us look at financial decisions better on how we spend on growing our networks in a sustainable way.
Safaricom looks to become a plastic-free environment by eliminating all single-use plastic at its facilities and minimising plastics used in retail packaging. What’s the progress…?
A few years ago, even before the official ban on single-use plastic bags by Nema (National Environment Management Authority), we made a commitment to ourselves to remove plastics from our operations and try and extend it to our supply chain. For us, this was in response to SDG 12 which encourages responsible production and consumption. This was also due to the fact that we know plastics impact a lot of our marine life around the country even though that’s not directly related to our business.
To this end, there are a couple of things that we have done. First we entered an MoU (memorandum of understanding) with the UN environment program (Unep) where we have committed to advance industry discussions, advocacy and work around the area. We have attended a couple of forums with the Unep and County Governments looking at how we can encourage more businesses to adopt the plastic-free environment.
When exactly is Safaricom’s plastic-free goal expected to be reached and what are the alternatives to plastics use?
Internally, our first action was to remove plastics from our retail centers and shops. And it was a very interesting business decision because we always think we could have done it earlier because in the end it actually costs the same – using plastics versus the non-woven bags. Since the government’s official ban, we have removed close to seven million bags from our ecosystem and our retail centers across the country at actually no additional cost. Safaricom headquarters, for instance, has managed to completely remove the plastic cups that are usually at the water dispenser, in the gym, and other areas. In the cafeteria, our staff now use glasses or water bottles.
The most challenging issue, however, is removing plastics within our supply chain. We have a large number of suppliers but we have started having discussions with them along this line. For our international suppliers, it’s something that they are actually aware of and so discussions are ongoing too.
What we have also done, if you look at our SIM cards, is that we have reduced their sizes. It may seem very small if you look at one sim card but actually that reduction multiplied by the number of SIM cards we have in the market, makes a significant impact on our plastic footprint.
With regard to timelines, we haven’t set an ultimate goal; what we have identified instead are touch points where plastic is in circulation and in use. And we’re going to continue to eliminate them as we go along.
How much is being saved in costs as a result of waste recycling?
At Safaricom, we have adopted and integrated a waste management approach. At our headquarters for example, we segregate and either recycle or reuse at least 97 percent of our waste. We segregate into plastics, food items and we’re working with a local partner- Taka Taka Solutions. I think it’s an interesting initiative because we know that this has also created employment downstream.
Another area of collection that is important to us as a mobile operator is e-waste management.
The cost savings aspect isn’t as important to us as the aspect of being a responsible operator. What’s important is that we’re doing our part in terms of segregating our waste and being sure that it’s appropriately managed and taken care of.
The telco introduced the staff carbon footprint calculator. What is expected to be achieved?
The carbon footprint calculations for us are very important. At Safaricom, continuing to measure our carbon footprint annually is key.
We examine our carbon footprints to determine whether or not we are efficiently using our resources including energy. We look at the balance between diesel and other renewable sources used to run our sites with a view to continuing to change that energy mix in favour of renewables. We acknowledge that due to the instability of the grid, there are some sites that we have to use diesel. To this end, we’re working with Kenya Power and green power providers to make sure that we can continue to tilt our mix towards clean energy.
Now, another important component of the carbon footprint is the personal carbon footprint. We set a challenge for our staff; the first direct challenge actually went to our leadership team to see how we could manage and mitigate their own carbon footprint, at an individual level. This is because we’re not just here to practice sustainability for Safaricom. Safaricom comprises 6,000 individuals, each of whom needs to play a key part in promoting green behaviour. Then collectively, the compounding results start showing.
Safaricom plans to achieve ISO 50001 Energy Management certification by March 2020. What will this mean to the company, shareholders and customers?
Our company relies quite heavily on energy to power the network, to power our data centres and our facilities. So for us this ISO certification is very important to demonstrate our commitment to effectively and efficiently manage our energy resources. It’s very important to our investors and other shareholders and indeed even to ourselves internally that we run as efficiently and effectively as we possibly can.
What takeaways can other companies gather from Safaricom in integrating sustainability in their operations?
The thing is, you’re never too small or too big to be a sustainable company. The greatest opportunity to set up a sustainable business is right from the start. It’s very important for a business to review and examine its purpose – how it wants to engage its customers, its shareholders in the long-term for the time it’s in business. For Kenyan businesses, I think our biggest challenge is that we’re yet to learn that sustainability cannot be practiced in isolation. The thing is, it’s not only the big business that will tackle the climate crisis alone. What we need instead is the entire business ecosystem to take a stand.