NAIROBI, Kenya- East Africa’s largest bank, KCB, is setting a new standard in green finance, allocating nearly half of its loans to support projects with a positive environmental impact.
In its 2023 Sustainability Report, released on Tuesday, the bank detailed its commitment to combating climate change by lending Ksh615 billion—out of a total Sh1.09 trillion—to businesses dedicated to reducing their carbon footprint.
KCB’s green financing strategy is not just about numbers; it’s about making a tangible difference.
The report highlights that 15.5pc of the bank’s total loans, amounting to Ksh21.4 billion, were channeled towards projects in e-mobility, climate change adaptation and mitigation, and renewable energy.
This marks an impressive increase from 12.3pc in 2022, fueled by new initiatives in infrastructure, transport, and manufacturing.
KCB’s green project portfolio is broad and impactful, covering renewable energy, sustainable agriculture, waste management, and climate-smart infrastructure.
The bank is targeting a milestone where 25pc of its loans will be directed toward green projects by next year.
This ambitious goal aligns with Kenya’s broader efforts to close a significant climate finance gap, currently estimated at Ksh11.16 trillion, necessary to meet the country’s Nationally Determined Contributions (NDCs) by 2030.
KCB is also raising the bar for transparency in environmental, social, and governance (ESG) reporting. The bank has become the first financial institution in Africa to have its Sustainability Report assured by external auditors, a move that KCB Group CEO Paul Russo says ushers in a new era of accountability.
“We are increasing our focus on sustainability and environmental responsibility. We are proud to announce the release of the first assured report, setting a new standard in ESG reporting in Africa,” Russo stated.
He emphasized that the report’s externally verified key performance indicators and metrics accurately reflect the bank’s performance, enhancing both transparency and accountability.
One of the standout initiatives in the report is KCB’s calculation of its financed emissions for 2023, including Scope 3 emissions, with a focus on its primary carbon-intensive sectors.
Russo pointed out that aligning business practices with sustainability principles not only drives long-term value creation but also mitigates risks associated with environmental and social challenges.
KCB’s commitment to sustainability extends beyond green finance. In 2023, the bank planted over 300,000 trees, with plans to plant over 1.2 million more in the next five years to further reduce its carbon footprint.
