While Africa is responsible for less than five percent of carbon emissions, it is most vulnerable to climate instability.
It is laudable that the Kenyan regulators have taken the lead and issued guidance on ESG and climate risk management.
Equity Bank, via its Foundation, is helping learning institutions switch away from traditional wood fuel to clean cooking solutions.
Technicians install solar panels at a water borehole project for Mwathene Dispensary in Meru County. PHOTO | CHARLES WANYORO | NMG Climate-related concerns are undoubtedly a global problem, yet they pose a more significant challenge for Africa, where extreme weather patterns impact the livelihoods of the vast majority of the population as discussed recently in the State of the Africa Climate Report, 2020.
While Africa is responsible for less than five percent of carbon emissions, it is most vulnerable to climate instability. Sub-Saharan Africa, in particular, is likely to suffer more from rising temperatures and sea levels, changing rain patterns, extreme weather conditions and population displacement compounding the challenges around food and water security, health and safety and economic empowerment.
Therefore, it is laudable that the Kenyan regulators have taken the lead and issued guidance on ESG and climate risk management. In October 2021, the Central Bank of Kenya (CBK) issued a new guideline to banks on climate-related risk management.
The guidance requires banks to assess opportunities and risks arising from climate change, have in place climate-related risk management strategies, disclose climate-related information as part of an annual sustainability report and submit a quarterly progress report on the implementation of the strategy.
It is expected that this will go a long way in informing the banks on supporting green banking and guiding them on communicating climate-related information to their stakeholders.
The Nairobi Securities Exchange (NSE) followed suit and soon thereafter in December 2021, became the fourth exchange in Africa to issue an ESG manual guiding listed companies on measuring and reporting ESG matters.
This mirrors and is in line with international standards for sustainability reporting and is a reflection of how ESG has become a significant concern for the investor community.
Companies are now taking proactive approaches to manage ESG risks and opportunities as part of their business strategy to create long-term value while focusing on the business’s environmental and economic dimensions.For NSE-listed companies, the mandatory reporting will aid all companies to start assessing their business models more critically and provide transparency to stakeholders on their business practices […]
