Case Study: MTN's Sustainable Procurement Journey

MTN Group Limited

MTN Group Limited (MTN) is a multinational telecommunications company and mobile network operator that provides various services, including voice, data, fintech, digital, enterprise, wholesale, and application programming interface (API) services. It operates in several geographical segments, including South Africa, Nigeria, the Southern and East Africa region, the West and Central Africa region, and the Middle East and North Africa regions. MTN offers a wide range of services, from mobile communication to financial technology (fintech), and it has a significant presence in various African and Middle Eastern countries.

MTN Recognizes Sustainable Procurement is a Necessary Business Dimension?

In recent years, responsible supply chain management has become a pivotal aspect of sustainable business practices across the globe. As a prominent player in the telecommunications industry, MTN Group recognized the need to align its procurement strategies with ethical, environmental, and social responsibility standards. This case study delves into MTN's commendable journey toward implementing sustainable procurement practices, the initiatives and partnerships it has forged, and the remarkable benefits reaped in terms of reputation, profits, revenue, and broader societal impact.

The Path to Sustainable Procurement

MTN, as a telecommunications giant operating across multiple countries in Africa and the Middle East, is acutely aware of its responsibilities in contributing to environmental sustainability and ethical sourcing throughout its vast supply chain. To this end, MTN has initiated a comprehensive set of initiatives and programs, each designed to reduce its environmental footprint, promote ethical practices, and bolster its supply chain's resilience.

At the forefront of MTN's sustainability initiatives are Project Zero and Ambition 2025, driving the company's commitment to minimize greenhouse gas emissions and energy usage. Project Zero, a cornerstone of MTN's environmental sustainability efforts, focuses on reducing its carbon footprint. In 2021, MTN conducted a Scope 3 materiality assessment, underscoring its dedication to transparency and accountability by understanding emissions across its value chain. With the aim of having 80% of suppliers commit to emission reduction targets by 2026, MTN not only seeks to mitigate its impact but also encourages sustainability practices within its extensive supplier network. Anchored in its sustainable procurement strategy is the Supplier Code of Conduct, emphasizing high ethical standards, human rights protection, and a strong commitment to environmental sustainability, setting clear expectations for suppliers to align with these principles.

MTN translates its commitment to sustainability into concrete actions, conducting rigorous assessments of over 850 suppliers in the past year alone. This meticulous process resulted in the exclusion of 12 suppliers due to compliance and financial risks, showcasing MTN's unwavering dedication to ethical sourcing and due diligence. The company upholds a zero-tolerance policy towards bribery, fraud, and corruption, ensuring transparency and ethical conduct throughout its supply chain. Additionally, MTN leverages cutting-edge technologies like cloud computing, artificial intelligence, and machine learning to digitize its supply chain. This digital transformation facilitates data-driven decision-making, identifies areas for improvement, streamlines operations, and contributes to reducing the company's environmental footprint.

MTN's unwavering commitment to sustainability involves rigorous third-party assessments and audits in collaboration with organizations like the Joint Alliance for CSR (JAC), ensuring adherence to the highest standards of ethical and sustainable conduct for both MTN and its suppliers. The Ethically Aware Supplier Induction program (EASI), implemented in partnership with the Ethics Institute, imparts ethics training to over 285 suppliers, fostering a culture of responsibility throughout MTN's supplier network. Within the Ambition 2025 program, MTN strategically addresses global supplier risks, cost control, and inflation management by localizing goods and services procurement, thereby enhancing supply chain resilience and contributing to regional economic development. A pivotal aspect of MTN's commitment is reflected in the 2021 Scope 3 materiality assessment, which analyzes emissions across the entire value chain, identifying areas for improvement and encouraging suppliers to set science-based carbon-reduction targets and report progress in integrating emission reductions into their operations.

Realizing Benefits

MTN Group's commitment to sustainable procurement has resulted in a multitude of benefits and achievements across environmental, social, and financial dimensions. One of the most significant financial gains is the remarkable 30% increase in EBITDA directly attributed to these initiatives. This demonstrates that sustainability isn't just a feel-good practice but a tangible driver of financial success for MTN.

In terms of reputation and public perception, MTN has excelled. In a recent survey by Brand Finance, MTN achieved the highest 'sustainability perceptions value' among all surveyed companies. This indicates that MTN is not only taking steps towards sustainability but is also effectively communicating its efforts to stakeholders, enhancing its brand value and reputation.

Financially, MTN's sustainable procurement efforts have yielded impressive results. In 2022 alone, nearly US$953,805 in savings were achieved through refurbishing, reusing, and reselling network equipment. These cost savings directly contribute to the company's bottom line while aligning with sustainability goals.

In addition to the financial benefits, MTN also reduced over 817 kg of network waste, which was diverted from landfills, marking a significant achievement in terms of environmental responsibility and waste reduction. Additionally, MTN's focus on responsible procurement led to the avoidance of 2,363 tCO2e emissions. This demonstrates a clear commitment to reducing its carbon footprint, aligning with global climate goals, and contributing to a greener planet.

Want to be Like MTN??

MTN Group's path to sustainable procurement reflects a steadfast commitment to ethics, the environment, and social responsibility. Through strategic alliances, ambitious goals, and ethical business practices, MTN has elevated its reputation, achieving notable financial and environmental gains. This case study highlights the transformative power of sustainable procurement practices, urging industry leaders to follow MTN's example and embrace this journey for widespread benefits. Ready to join the movement?

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