In an era where the effects of climate change are becoming increasingly palpable, Standard Chartered Kenya has taken a significant step forward by launching its 2023 Sustainability Progress Report. The report, unveiled yesterday, details the bank’s comprehensive approach to sustainability, emphasizing governance structures, environmental management, and social and climate risk mitigation. This second edition of the report reflects the institution’s dedication to fostering a sustainable future, not just within its operations but across the communities it serves.
Through the report, both stakeholder and investors will have an understanding of the implications of relevant climate & sustainability-related risks & opportunities and progress against the banks’ objectives. The 2023 Sustainability Progress Report provides a wealth of information on the bank’s environmental, social, and governance (ESG) strategies. It outlines specific initiatives aimed at reducing the bank’s carbon footprint, enhancing social equity, and improving governance standards.
Kariuki Ngari, the CEO and Managing Director, articulated the bank’s vision and its ongoing commitment to sustainability. “The launch of our second Sustainability Progress Report reflects our commitment to ensure we set aspirations that enable us to make a tangible impact across our operations, communities, and offerings towards a sustainable future,” Ngari stated. His words underscore the bank’s strategic approach, which integrates sustainability into its core business model.
Kellen Kariuki, the Chairperson of the Board, highlighted the bank’s adherence to its foundational pillars: Accelerating Zero, Resetting Globalisation, and Lifting Participation. These pillars, she explained, are not merely theoretical constructs but actionable strategies that drive the bank’s sustainability efforts. “The Bank is committed to remain true to our Stands – Accelerating Zero, Resetting Globalisation & Lifting Participation – which are delivered through the execution of our strategy,” Kariuki said.
The adverse impacts of climate change are increasingly palpable, manifesting through erratic weather patterns, prolonged droughts, and devastating floods. These extreme climate events threaten not only the livelihoods of millions but also the country’s agricultural backbone, which is pivotal to its economy. In response to these pressing issues, there is a growing recognition of the need for sustainable business practices that can harmonise economic development with environmental stewardship
The role of financial institutions in promoting sustainability was further elaborated by the Chief Financial Officer, Chemutai Murgor. She emphasized the intermediary role banks play in mobilizing and allocating capital towards green initiatives. “Banks are expected to play an intermediary role in mobilising and allocating capital for the green agenda. We believe finance has a key role to play in building a cleaner, fairer world,” Murgor noted. This perspective positions the bank not just as a financial entity but as a pivotal player in the global effort to combat climate change.
In accordance with the Paris Agreement, Kenya has recently updated its Nationally Determined Contribution (NDC), targeting a 32 per cent reduction in greenhouse gas (GHG) emissions by 2030. This ambitious target highlights Kenya’s commitment to combating climate change and underscores the urgency for integrated action across various sectors. Addressing these risks requires substantial financial investments. Kenya’s NDC identifies the current estimated cost of implementing mitigation and adaptation measures at KES 6,775 billion for the period 2020-2030
Furthermore, in October 2021, the Central Bank of Kenya (CBK) issued a Guidance on Climate-Related Risk Management to commercial banks. This guidance is intended to facilitate banks in incorporating climate risk-related considerations into their governance, strategy, risk management, and disclosures frameworks. Banks are expected to play an intermediating role in organisation and allocating capital for the green agenda. Additionally, the Task Force on Climate-related Financial Disclosures (TCFD) provides a voluntary disclosure framework for use by organisations in reporting climate-related financial risks, further aiding transparency and accountability in sustainable finance.
The intersection of climate change and economic activity in Kenya necessitates innovative approaches to business and finance. Sustainable finance emerges as a powerful tool in this context, offering avenues to fund initiatives that mitigate environmental impacts while fostering economic resilience. By integrating environmental, social, and governance (ESG) criteria into investment decisions, Banks can drive progress towards a low-carbon, sustainable future. There are burgeoning opportunities in areas such as renewable energy, sustainable agriculture, and eco-friendly infrastructure. The convergence of climate change challenges and the need for sustainable economic.
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