KCB embraces green finance in its operations to reduce risk
By David Indeje On August 7, 2017
KCB Bank Group has embraced integrated environmental and social management system to its lending operations to enhance Green Finance. Group Chief Executive Joshua Oigara said the policy is aimed at improving the financial system’s effectiveness in mobilising capital towards a green and inclusive economy. “We are committed to being a sustainability leader by contributing to the green economy which is new to the industry. We have made great strides in undertaking social and environmental assessments on our portfolios and seek to further enhance these procedures as we engage more with stakeholders across the region and globally” said Mr Oigara. The Bank said it has now fully integrated its Environmental and Social Management System (ESMS) into the lending process— for facilities to corporate and small and medium-sized enterprises (SME) clients—further aligning key business operations with the KCB’s Sustainability Agenda. A total of 42 social environmental assessments were undertaken on 100 million facilities worth Kshs. 268 billion in 2016. This constitutes at least 70 per cent of the Bank’s loan book which stood at KShs. 385.7 Billion.
In 2017, this process will also be implemented in micro-lending, as the Bank seeks to further deepen its contribution towards reducing the impact of climate change. Screening is done to avoid and manage loans with potential social and environmental risks by conducting social and environmental due diligence prior to loan disbursement.
In April, the Kenya Bankers Association (KBA) and the Nairobi Securities Exchange (NSE) launched the Kenya Green Bonds programme to fight climate change. KCB said it is keen on maintaining operational efficiencies on all aspects and all the way to the branch level in ensuring that it becomes a carbon neutral bank. “We believe that business is no longer just about making profits but about transforming the lives of communities in markets where we operate. It is our firm conviction that sustainability must go hand in hand with increasing shareholder value and I believe that we have found the right balance,” said Mr Oigara. “We don’t operate in a vacuum but in an environment where we have to ensure that we are a good corporate citizen.”