One of the subjects that has long been debated in business is the topic of sustainability. For very many years, sustainability was seen as the “other” thing to worry about, the AOB in meetings and a subject that really doesn’t get much attention, but with the sheer impact of human activity on our planet – sustainability is being implemented into core business functions worldwide.
For Karen Basiye, the current acting Head of Department for Sustainable business and Social impact at Safaricom and a Shared Value specialist, sustainability has always been at the forefront because it goes hand in hand with brand purpose, especially for Safaricom whose main objective has been to make a difference and transform lives all over Kenya.
But sustainability is still something so many businesses are finding hard to grasp, so what is sustainability and how does it measure up to the success of a business?
I spoke to Karen to understand what True Value means to her and to Safaricom as one of the only companies to truly comply with what sustainability is in a business.
According to KPMG’s True Value Case Study of Safaricom, they quantify the positive and negative impact of the telco on society, the environment, and the economy in monetary terms. Karen Basiye, who’s been in the sustainability field for the past 8-9 years and at Safaricom for 12 years having started off as an environment manager to the position she has now, describes this process of determining the company’s True value as vital to ensure the alignment of a business towards its success.
Sustainability is key in every business model
“I always tell people that wonders happen when opportunity and preparedness meet. When I joined Safaricom, they were just focusing on environmental matters and I had already had 2 years of experience prior to joining but what I had learned in school, made me want to do more to help the company to incorporate sustainability into their practices. So I slowly started preparing Safaricom’s sustainability framework, of course with the help of my then boss Sanda Ojiambo and our team.
Back then, sustainability was mostly talked about in Europe and it puzzled me why Kenyan companies were not in the same boat. That’s when I started reading and collecting material on why companies die so quickly and when I dived more into my research, I found that companies that are more than 100 years old have always had sustainability as part of their core business.”
How did it look like then when you were starting out?
“When you look at the growth of companies, you notice that they start from a basic point of compliance – by fixing the basics – and at that point, that’s exactly what Safaricom was doing. In the first two years of joining the department, it was basically us cleaning house, ensuring that we were compliant then figuring out what else we could do. Remember that Safaricom has always been a fast-moving company, meaning at first it was a bit hard to incorporate sustainability into all fields of the company with all that it was doing to become the largest telecommunications company in Kenya, but I had very good line managers who knew the importance of safeguarding and complying with what it took to protect the environment. It didn’t take long for us to be awarded the most compliant company in the telecommunication sector in Kenya.
We were lucky because by the time we were working on sustainability, Safaricom had already been a purpose-driven company working to transform lives and derive business opportunities from the challenges faced in our society. So I feel like within the Safaricom business framework lies our approach to sustainability.”\
So where does the aspect of True Value come in a business?
“True Value is a methodology that seeks to quantify the positive or negative impact of the organization or society’s environment and the economy in monetary terms. We had done sustainability at a point for like three years so now I started saying this is a business. People needed to understand our impact so when I was talking to KPMG, they told me to hold on to this True Value methodology that will help you speak business because the methodology helps us to assess our true value including externalities, to understand the future earnings and risks, to develop businesses that create more corporate and societal value. The methodology factors in various things including capital expenditure, income, job creation, taxes, and levies.
We impact every factor into monetary value and also looking at our impact on the society in comparison to the profits and net, the economic value we’ve created as a proposition to our GDP, and look at how value has been eroded in terms of negative impacts such as corruption and negative the environment.
The True Value methodology was developed by KPMG and it provides a balanced overview of Safaricom’s impact whether social, economic, or environmental impact. It is through this true value that the foundations have an impact but the business has a bigger social impact from its products. Also, when you look at the kind of analysis, it’s easier for the key stakeholders to understand since they are involved in the fundamentals of society’s economy such as job creation, environmental conservation, and payment of taxes.
Therefore True Value has made it easy for us as a business to engage stakeholders on the value we are creating to remain profitable in an almost open and transparent manner.”
How has it been integrating sustainability into Safaricom considering it’s a very interesting methodology to integrate since it has to include everyone and every sector of the organization?
“The top-down co-creation approach entails factoring in the broad sustainability imperatives and risks as well as inputs from various functional units within the business when drafting a sustainability strategy. We adopted this approach because it is flexible, inclusive, and draws the strength of the management, the senior management, and all the levels within the team. After gathering what each team has to say we articulate the requirements in a way that makes sense and is relevant to every unit. This approach entails extensive ongoing conversations and consultations at all levels and functions across the company. It also ensures that the colleagues at every level embrace, understand, and take ownership of sustainability within the spaces.
Here, we did both so we met at the center. One excellent thing about this approach is the fact that the interests of critical stakeholders when developing the approach is defined.
Do your sustainability goals touch on or affected your Key Performance Indicators (KPIs)?
“After we came up with our sustainability goals in 2016, we realized we needed to give people sustainability targets. Different people have different targets including targets on the number of women we want in senior management and technology-wise. What gets measured gets managed so if we didn’t give people targets, sustainability would just be lip serviced.
Is there a need to have more exposure for the company stakeholders into the sustainable management practices you have so that you can achieve your sustainability goals faster?
“Definitely. Stakeholder engagement is very critical in sustainability management. So, in order for us to enhance our values and work, we have to always involve our key stakeholders in the development and execution of our sustainable business strategy. So we have to always have our stakeholders engaged and be part and parcel of every move we plan to make. Another thing about stakeholders is when Safaricom realized that sustainability is the way to go, we looked at ourselves once again and realized that we have so many suppliers who don’t make the cut to supply globally. When we started this journey, we started at a global compact level so we got our suppliers to sign the code of conduct for businesses in Kenya. We then told our suppliers to join the global compact and so far we have around 96% of our total suppliers that have so far joined the global compact. We realized we couldn’t leave our business ecosystem behind. We realized It wasn’t making sense when we were saying we were going to be sustainable yet we are leaving the whole business scope behind. That way we asked our suppliers that sustainability is a journey and that they should join us.
The other part where I’m seeing a lot of engagements is within our investors because they are now asking for more. They want more Environmental Social and Governance structures in place. They simply understand all of our achievements, our true value, and they see the sustainability results.
As a company, what would you say is the right time to drive sustainability to a business how you have been in business for quite a good number of years?
What made us as Safaricom to succeed was how Safaricom upheld and played well around its main purpose. Embodying sustainability in a Purpose-driven company is easy.
From Safaricom’s DNA, we knew we wanted a certain caliber of a company and I always tell business owners while you are starting, start right. Spend the first three years cleaning compliance but have sustainability already in place. That way your company will be there for a longer time. Look into global sustainable goals including minimum wage, working hours, working environment anti-corruption, and waste and environmental externalities. Sustainability at a basic level is not expensive because it all involves the basics of compliance. If you have never set it up, pick from where you are and carry on.
How has your business model changed especially when COVID-19 came into the picture?
“The business model didn’t change much because our model was already resilient and influenced by sustainability. What we have just done is that we’ve enhanced the model and then shift the gears. For instance, we all were going to the office for work but with COVID-19, we’ve realized that work is a space and not a place. Note that 85% of Safaricom employees are currently working from home.
Also, there are so many things we did after the onset of COVID-19 including M-PESA payment removal for smaller amounts, supporting COVID-19 initiatives, and cushioning our customers. To me, COVID-19 has tested us on our business resilience so it was more of a business resilience than a change in the business model. I hope at the end of the COVID-19 pandemic, we will look back and see that being a purpose-led and sustainable company we have survived because of the fundamentals we have laid down as a business.”
What does the future hold for Safaricom in terms of sustainability and doing sustainable business?
“The future is bright. I see us continue working with our stakeholders to deepen the integration of sustainability within and beyond Safaricom. We will continually look at ways where you can bring more transformative products and services to our customers that would support the critical sectors of our economy such as SMEs as they contribute to 80% of businesses and the backbone of this economy. Also, as the business continues to grow, we’ll explore ways of mitigating negative environmental impacts on society if there are any. We will also work towards being a purpose-led technology company even as we expand into new markets. We will continue with our commitment to addressing changes, inequalities in those markets we operate in. There’s definitely a lot of work for us in sustainability because as much as people see us as the top in Kenya, internationally, we have so much to look into and as for me those are the things I’m looking at. I see we have a long but good way to go.”
