Central Bank Of Kenya Governor Launches Industry Commitment To Enhance Economic, Social And Environmental Sustainability
Kenya Bankers Association Partners with DEG, FMO and IFC towards Building Industry Capacity in conjunction with Global Sustainable Finance Agenda
NAIROBI, 1 st December 2015 -- Commercial banks in Kenya have developed a set of universal principles that will guide them in balancing their immediate business goals with the economy's future priorities and socio-environmental concerns. By establishing the Sustainable Finance Initiative (SFI) and defining the SFI Guiding Principles and Minimum Standards, Kenya follows in the footsteps of other countries, including Nigeria, India and South Africa, which have had initiatives either spearheaded by regulators or banks to promote sustainable development.
The SFI Principles that were launched by the Central Bank of Kenya Governor, Dr. Patrick Njoroge are grounded in three main priorities, namely equipping the financial services sector to perform optimally in the area of comprehensive risk management; enhancing business practice, leadership and governance; and promoting industry growth and development by fostering a culture of innovation and inclusivity enabled by new technology. The SFI Principles have harmonised the global best practices, including the standards published by African Development Bank, IFC, UN Global Compact and UNEP, among others. The process has been spearheaded by the banking industry umbrella body and the financial services sector lead advocacy group, Kenya Bankers Association (KBA). "In addition to reconfiguring our models to factor in not only financial profits, but also economic profit maximisation; through our investment and advisory role, our sector can positively influence the sustainability of other sectors - thus serving as a catalyst and a unique enabler of sustainable development," said KBA Chairman Joshua Oigara. "The process of developing the principles and building industrywide capacity is motivated by our desire to support efforts towards making Kenya and the EAC region more globally competitive. It demonstrates that apart from deepening financial inclusion and contributing towards sustainable economic growth, banks in particular are also concerned about the other challenges that Africa currently faces in the areas of climate change and environmental degradation, social exclusion and resource scarcity," said Mr. Oigara. KBA has partnered with DEG and FMO to develop an e-Learning Platform which is anticipated to reach all bank employees - an estimated 30,000 workers - by the end of 2017. KBA also has joined forces with IFC to certify and train local consultants in an effort to support the industry in implementing the Principles and standards. "We wish to acknowledge the input of the SFI Working Group, comprising the KBA Secretariat and the 12 banks that were tasked with developing the Principles," Nuru Mugambi, KBA Director and lead on the Sustainable Finance Initiative. "In this process, we have been keen to ensure that the Principles are not only consistent with global best practice, but are also aligned with the risk management policies of individual banks and relevant to the Kenyan and regional context," she said. Ms. Mugambi added that KBA's 46 member banks represent not only commercial and microfinance banking activity but also cut across the financial services sector to include the sub-sectors of insurance, investment banking and asset management. "Therefore, this body of work would directly contribute to the banking industry as well as the broader financial services sector," she said. "We also look forward to partnering with the Nairobi Securities Exchange, which recently signed on the to the global UN Sustainable Stock Exchanges initiative." KBA also announced an awards scheme that will see the sector recognise excellence in sustainable finance. The Catalyst Sustainable Finance Awards will be launched during the course of 2016.