news - Kenya's banks chart way forward to promote sustainable finance and build industry-wide capactiy

The Kenya banking sector started an initiative to promote best practice in sustainable finance during a CEO round table meeting held on September 10, 2013. The Kenya Bankers Association (KBA), an umbrella body for the sector, launched the Sustainable Finance Initiative in order to increase alignment between its 43 member banks, whilst building banks’ capacity in the area of environmental and social risk management. The CEO round table discussion was facilitated by KBA, UNEP-FI, DEG and FMO and moderated by Steward Redqueen.

In line with Kenya’s “Vision 2030”, the country's long-term development plan, KBA’s member banks agreed to support efforts towards making Kenya's banking industry more globally competitive. With economic, social and political pillars, Vision 2030 reflects the main challenges that Kenya faces. These challenges include sustainable economic growth, financial inclusion, but also environmental degradation, climate change, social exclusion and resource scarcity. The Sustainable Finance Initiative has been tasked with ensuring that Kenya’s banks play a central role in Vision 2030. The initiative will include capacity building for banks and the creation of Sustainable Finance Guiding Principles by Kenyan Banks, for Kenyans.

During the CEO Roundtable, KBA Chief Executive Officer, Mr. Habil Olaka said: "Kenya's banks are regional leaders of the financial services sector, we therefore are confident that the KBA member's commitment to promote a competitive financial system that drives sustainable economic growth through market-based solutions will not only develop the industry and bolster Kenya's role as a Financial Sector Regional Hub in line with the Kenya Vision 2030, but also it will promote better social and environmental practices in Kenya.”

Nico Pijl, FMO’s Chief Risk & Finance Officer, responded positively to the successful outcome of the CEO roundtable meeting: “We are pleased that we had the opportunity to contribute to the Sustainable Finance Initiative in Kenya. As FMO, we look to support our clients above and beyond the financing that we provide, but in this Kenyan initiative, we are able to effectively engage with financial institutions beyond our own portfolio. As such we are enabled to assist the sector as a whole in creating a level playing field with elevated environmental and social standards. A key success factor in this initiative has been the strong local ownership and leadership, and the resolve of the KBA to make a difference to its members and to the people of Kenya”.

The commitment by the KBA member banks to set up the Sustainable Finance Initiative is the first step in a process that will make Kenya part of a small but growing group of countries where banks and other stakeholders are creating sustainable finance frameworks and incentives. Other examples include Nigeria's Sustainable Banking Principles, the Joint Statement Commitment between the financial sector in Bangladesh and the Ship Breakers Association and Paraguay's Roundtable for Sustainable Finance.

Additional information, including photos, interviews and presentations, can be found on the website of the Kenya Bankers Association.