The making of an eco-friendlier tech industry

Just a few years ago, supply chains were all about getting things done quickly and efficiently. But times have changed. Now, companies are thinking about new challenges, such as the risks linked to climate change, and the urgent need to cut down on carbon emissions.

This shift is happening because customers, investors, and employees are all pushing for more transparency and accountability when it comes to sustainability across industries.

For telco giant Safaricom, this emphasis on Environmental, Social, and Governance (ESG) practices is not just staying within the company walls; it’s spreading fast into their entire supply chain system.

Carbon footprints

“We are intentionally working within the supply chain to cut our carbon footprint. If we need to import some goods, we would rather bring them by sea than by air freight. So, we have had to have better planning and timing around these issues. We have done a lot within that space to make our supply chain sustainable,” Karen Basiye, the Director Sustainable Business and Social Impact at Safaricom PLC told Maudhui House.

Company statistics show that in FY23, air emissions ( reduced by 23 percent to 1.64 tonnes from 2.15 tonnes in the previous trading year. On the other hand, sea emissions were reduced by 9 percent or 2.13 tonnes to 21.15 tonnes in the year under focus.

In an increasingly warming planet, the focus on emissions makes a lot of sense. Being responsible in sourcing and being open about supply-chain risks doesn’t just help shareholders – it’s also a smart move for the future of humanity. An estimated 90 percent of Safaricom suppliers have signed up to the telco’s Code of Ethical Purchasing and Absolute Rules, the firm’s 12th Sustainability Business report shows.

Reducing emissions means using less electricity and cutting down on fossil fuels in a company’s own operations. While that’s an important step, to get truly responsible, businesses have to also consider the emissions that their suppliers and other partners in their supply and distribution networks produce, not just their own emissions. This is the bigger picture that creates value for the entire economy.

More inclusive supply chain

According to Ms Basiye, Safaricom is actively working towards a more inclusive supply chain. This goal encompasses among others, welcoming more women, youth, and people with disabilities into its supply chain ecosystem, and granting them supply contracts. “Our goal is to allocate 10 percent” of the telco’s procurement budget to these deserving partners, she noted.

“It is pleasing to note that the spending with Women in Business (WIB) increased to 5.81 per cent of our total procurement spend. This is attributable to contracts awarded to WIB in the technology networks category – an area of significant spend,” Safaricom’s Sustainability Business Report for the fiscal year ended March 31, says in part.

In the 12 months to March, 63.5 percent of Safaricom’s procurement spend of Kes64.81 billion went to local suppliers. This was a marginal increase of 1.53 percent compared with FY22.

On the distribution side across Kenya, Ms Basiye notes that Safaricom is significantly cutting down on single-use packaging for products. Take Safaricom’s SIM card product, for example. A little over a decade ago, a SIM card customer would get a whole bunch of stuff with it—paper, tin, and more upon buying it. At the moment, you just get the SIM card. These changes are part of our effort to make our supply chain eco-friendlier and sustainable, she explained.

Ms Basiye was speaking following the launch of Safaricom’s 12th Sustainability Business Report which shows that the companysustained over 1.2 million jobs, including 236,674 direct and 1,159,309 indirect, while contributing Kes909.5 billion to the Kenyan economy in the financial year ended March.

Renewable energy investments

To further check its carbon footprint, Safaricom is investing in renewable energy sources to decrease both Scope 1 and Scope 2 emissions, the report notes. Scope 1 emissions are direct emissions generated from sources owned or controlled by a company or organization, while Scope 2 emissions are indirect emissions from sources such as purchased electricity, heat, and cooling.

On renewable energy usage, for instance, the telco’s sustainability report shows that the number of solarised sites increased by 361 percent to 1,432 by March from 310 reported in FY22.

Further, the company is adopting energy-efficient practices to reduce energy consumption. In FY23, Safaricom reduced diesel and petrol consumption by 11.9 percent to 8.8 million litres from 10 million litres reported in FY22. Additionally, the firm is actively encouraging its suppliers to adopt sustainable practices and reduce their own emissions, too.

In a pioneering move, Safaricom is promoting the use of a carbon footprint calculator among its over 5,300 employees. This tool is accessible through the company’s intranet, allowing employees to measure and understand their individual carbon footprints.

The company has established partnerships to plant five million trees within a five-year timeframe. This initiative aims to offset the remaining emissions generated by the company.

Data shows that in FY23, Safaricom collected 1758 tonnes of e-waste which was recycled, representing 8 percent rise from the previous year.

Science Based Targets initiative

What’s more, Safaricom is actively collaborating with its suppliers in line with its Science Based Targets initiative (SBTi) commitment. This commitment stipulates that 10 percent of the company’s suppliers, based on goods and services spending, should set their own science-based targets by 2025. As of now, only two out of 26 suppliers have achieved this milestone.

Reporting on targets related to the SDGs is now central to our ways of working, and we seek to empower all those with whom we work – employees, partners, and other stakeholders – to set their own, the report explains.

According to Ms Basiye, the telco is a key player in regional and ongoing global efforts to drive sustainability in business practices. Chief Executive Peter Ndegwa represented the African Business Leaders Coalition (ABLC), of which Safaricom is a founder member, at COP27.

On 9th November last year during the COP27 forum in Sham El Sheikh, Egypt, Mr Ndegwa announced the release of the ABLC Climate Statement highlighting the magnitude of what can be accomplished by bringing together the African private sector perspective on the challenges of climate change.

“Africa cannot act alone. We call on Governments of wealthy industrialized nations – the main greenhouse gas (GHG) emitters – and international financiers to act urgently to mobilize adequate resources and funding, build back trust by fulfilling commitments, and to support Africa adapt and build resilience to avoid the enormous cost of inaction. We recognise the unique opportunity before us to unite and take action to unlock Africa’s sustainability advantage, with the support of the international community and African Governments,” the ABLC statement.

United Nation Global Compact

Further pursuit of international coalitions on sustainability has seen Safaricom’s Chief Financial Officer, Dilip Pal, represent Africa in Telecom and Tech sector in the Advisory Board of CFO Coalition for the Sustainable Development Goals of the United Nation Global Compact, which is the world’s largest corporate social responsibility initiative.

“Various leaders within Safaricom have taken up different aspects of the SDGs and they are leading them. As a business, we realized we have a great convening power and we use this convening power to bring others into the fold,” Ms Basiye added.

In its relentless pursuit of advancing the sustainability cause within Kenya’s education system, Safaricom has partnered with business consultancy firm MK-Africa. Together, they are spreading awareness about the Sustainable Development Goals (SDGs) among the youth in tertiary institutions with the goal of inspiring young minds to come up with innovative, homegrown solutions to address Africa’s most urgent sustainability challenges.

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