Sustainable finance implementation in Kenya has been voluntary and consensus driven.
The Kenya Bankers Association has adopted a process of first raising awareness about environmental and social (E&S) issues among banks, followed by promotion of the practical implementation of environmental and social risk management (ESRM) through training and capacity building, with the expectation that reporting and compliance will follow once each bank’s internal capacity has been sufficiently developed.
In March 2019, the Kenya Bankers Association gained a mandate from banks to commence voluntary reporting. The issue of reporting had emerged from the 2018 SBN Global Progress report, which highlighted it as an area for development in Kenya’s sustainable finance journey. The Kenya Bankers Association is now in the process of developing reporting guidelines for ESRM to monitor how banks are integrating E&S considerations into their lending practices.
Although in the early stages of development, it has become clearthat reporting requirements need to be straightforward and not arduous.
A number of banks in Kenya have credit lines from DFIs, which already require banks to report on ESRM. The differing reporting requirements have created confusion and duplication. As such, the Kenya Bankers Association plans to launch reporting guidelines that are easy to manage and adhere to, with the expectation that these may be developed further over time.