Co-op bank was honoured for solely financing the iconic Two Rivers Mall
to a tune of about Sh8 billion ($80 million) resulting in impressive
economic, social and environmental development. FILE PHOTO | NMG
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.
To encourage industry
adoption of SFI, KBA mooted the Sustainable Finance Catalyst Awards to
recognise institutions that practise sustainable finance, which has a
direct positive impact on the financial sector, the economy, the
environment and the society at large.
“Our journey to
these awards began five-years ago. KBA members confirmed that to have a
long-term business success, there is need to recognise our environmental
and social responsibilities while simultaneously meeting our financial
objectives and economic contributions. The banks believed that such an
approach can enhance innovation, competitiveness, and the quality of the
credit portfolio of both individual banks and the overall industry,”
said Mr Olaka.
During the Catalyst Awards event,
Co-operative Bank of Kenya emerged as the overall winner for 2017 as a
result of building a sustainability strategy that enables people,
businesses and society to grow in a way that is sustainable in the
long-term.
“As a bank that is predominantly-owned by
the 15 million-member Kenyan co-operative movement, we are inclusive by
design that has not only enabled us to deliver shared prosperity today,
but also helped us build an awareness and prudence to avoid putting
future generations in jeopardy,” said Co-operative Bank of Kenya Chief
Executive Gideon Muriuki.
Co-op bank was honoured for
solely financing the iconic Two Rivers Mall to a tune of about Sh8
billion ($80 million) resulting in impressive economic, social and
environmental development.
Key contributions include
Sh889 million taxable income, installation of a 2,000 kW grid-connected
solar system, economic regeneration of the neighbourhood, and over 1,000
direct jobs created with 90 per cent of them going to women and youth.
Experts
opine that it is time Kenya identified “green finance” as a niche the
country could build competencies and make the proposed Nairobi
International Centre of Excellence in Green Finance a reality.
The
country already has an impressive track record in clean energy
financing and development that it accounts for the dominant part of
national power supply.
The National Treasury has already promised that the first ever green bond will be issued in the next financial year.
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