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Why NCBA’s Push For Green Financing Should Be Emulated

BY Soko Directory Team · June 12, 2024 11:06 am

There is no doubt that climate change poses an existential threat to our planet. Kenya has been at the forefront of advocating for practices that would make Earth a safer place to live and work. These initiatives have included a push for the use of electric cars, amplification of recycling minimizing the use of plastics, and planting trees.

The actions of financial institutions can significantly influence the trajectory toward a sustainable future and NCBA Bank Kenya has been leading the way through various initiatives across the country. The bank committed to mobilizing 30 billion shillings for green and sustainable financing by 2030, setting a commendable precedent for Kenya’s financial sector and beyond.

So far, NCBA has set in motion a journey to plant 10 million trees by 2030 in partnership with various stakeholders. It is currently the only bank in Kenya that owns a whole forest after planting 40,000 seedlings in one area in 2013 in Kitui.

Read Also: NCBA To Start “Adopting” Schools In A Push To Plan 10 Million Trees By 2030

Here’s why this initiative is crucial and worthy of emulation:

Addressing Climate Change and Environmental Degradation

NCBA’s green financing commitment aligns with global efforts to combat climate change. Directing substantial funds toward sustainable projects means NCBA is actively contributing to reducing carbon emissions, promoting renewable energy, and enhancing resource efficiency.

Such initiatives are vital for mitigating the adverse effects of climate change, including extreme weather events, biodiversity loss, and ecosystem degradation, which directly impact Kenya’s economy and the well-being of its citizens.

Economic Growth and Job Creation

Green financing can be a powerful catalyst for economic growth. Investment in sustainable infrastructure, renewable energy projects, and green technologies creates new business opportunities and jobs.

In Kenya, where unemployment and economic inequality remain significant challenges, green financing can stimulate sectors such as clean energy, sustainable agriculture, and eco-tourism, fostering inclusive growth and providing livelihoods for many.

Enhancing Financial Stability

Sustainable finance is not only beneficial for the environment but also for the financial sector’s stability. Funding projects with long-term environmental and social benefits can reduce the risks associated with unsustainable practices, such as resource depletion and regulatory penalties.

This strategic shift can lead to more resilient portfolios, protecting the bank and its customers from the financial shocks linked to environmental risks.

Read Also: NCBA To Plant 10,000 Trees In Nakuru As The Race To 10 Million Trees Peaks

Leadership in Corporate Responsibility

NCBA’s initiative sets a benchmark for corporate responsibility in Kenya’s banking sector. NCBA demonstrates that profitability and sustainability are not mutually exclusive. This approach can inspire other financial institutions to integrate environmental, social, and governance (ESG) criteria into their operations, fostering a culture of sustainability and responsible investment across the industry.

Alignment with Global Standards and Goals

NCBA’s green financing commitment aligns with international frameworks such as the United Nations Sustainable Development Goals (SDGs) and the Paris Agreement on climate change. Through green financing, NCBA not only enhances its global reputation but also ensures that its efforts contribute to broader global sustainability targets. This alignment can attract international investors who are increasingly prioritizing ESG-compliant investments.

Empowering Local Communities

Green financing has the potential to empower local communities by funding projects that enhance environmental resilience and improve living standards. For instance, financing renewable energy projects can provide reliable and affordable electricity to underserved areas, while investments in sustainable agriculture can boost food security and farmers’ incomes. NCBA’s initiative can thus play a critical role in driving community development and poverty alleviation.

Read Also: NCBA Establishes A Whole Forest In Kitui, Plants 40,000 Seedlings 

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system. Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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