In Summary
  • Domestication of climate change agenda is fully entrenched in law, as reflected in the Bill of Rights in the Constitution.
  • One segment that is likely to drive much of that migration to a clean economy is the financial services sector, especially if access to capital is made “climate-smart” that is, taking into account the sustainability impact of an activity to determine access to credit, insurance pricing and related decisions.

Global pre-occupation with climate change is a rather recent phenomenon especially in developing countries. Concern for the habitat, clean or green energy, sustainable development and related issues were for many decades a preserve of hard-core environmentalists and activists operating on the fringe of the economy and society that they were derisively referred to as “tree-huggers”.

Today, all that is water under the bridge, with the quest for a clean environment and sustainable, inclusive economy going mainstream as originally inspired by the Kyoto Protocol, and subsequent global arrangements such as the Paris Accord on Climate Change.

Domestication of climate change agenda is fully entrenched in law, as reflected in the Bill of Rights in the Constitution.

One segment that is likely to drive much of that migration to a clean economy is the financial services sector, especially if access to capital is made “climate-smart” that is, taking into account the sustainability impact of an activity to determine access to credit, insurance pricing and related decisions.

It is the primacy of finance in determining the character of economic development that influenced the global community through the United Nations (UN) to come up with the Sustainable Finance Initiative (SFI) intended to define and encourage adoption of standards and practices by financiers, which promote a sustainable economy.

Local lenders under the umbrella of the Kenya Bankers Association (KBA) collaborated with the SFI to come up with five sustainable finance principles that require local banks to balance their quest for returns with the economy’s future priorities and social-environmental concerns.

The guiding principles were formerly adopted on March 31, 2015 by the KBA member banks as an industry-wide policy.

“Through the integration of sustainability issues directly into our core business, we can fundamentally contribute to job creation and social inclusion, thus helping society to address challenges such as economic inequity,” said KBA chief executive Habil Olaka last Tuesday during the KBA’s Catalyst Awards in Nairobi.

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