SBFN Member Since:
2013
Member Organisations
Kenya Bankers Association
Progress Against sub Pillars
Framework Documents
| Country | Policies/ Principles/ Guidelines | Year | Issuer |
|---|---|---|---|
| Kenya | 2021 | Central Bank of Kenya | |
| Kenya | Report on the State of Sustainable Finance in Kenya’s Banking Industry | 2021 | Kenya Bankers Association |
| Kenya | 2021 | National Treasury | |
| Kenya | 2019 | Kenya Bankers Association | |
| Kenya | 2019 | Nairobi Securities Exchange | |
| Kenya | 2019 | Nairobi Securities Exchange, Kenya Bankers Association and others. | |
| Kenya | 2018 | Kenya National Treasury | |
| Kenya | 2016 | Kenya National Treasury | |
| Kenya | 2015 | Kenya Bankers Association |
Pillar 1 - ESG Integration - Strategic Alignment
National Framework
P 1.1 – Has the regulator or industry association published a national framework (“Framework”) for the banking sector that sets out expectations for integrating the consideration of environmental, social, and governance (ESG) risks and performance?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
–
P 1.2 – Has the relevant regulator or industry association published a Framework for capital markets, investment, insurance or other non-lending FIs that sets out expectations for integrating the consideration of environmental, social, and governance (ESG) risks and performance?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 1 - ESG Integration - Strategic Alignment
Alignment with International Goals & Standards
P 1.3 – Does the Framework make reference to international sustainable development frameworks or goals?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 18 (2) Page IV Point 2 and VI Point 2
P 1.4 – Does the Framework make reference to established international ESG risk management standards and principles for FIs??
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 16 and 18
Pillar 1 - ESG Integration - Strategic Alignment
Alignment with national goals & strategies
P 1.5 – Does the Framework make reference to specific national development objectives, plans, policies, goals, or targets?
Yes
Source Reference Detail
–
Source Reference Document
National Treasury Climate Finance Policy, 2016
Source Reference Description
Page IV
P 1.6 – Does any cooperation exist between agencies or between the regulator and industry association with respect to policy design and/or implementation related to ESG integration?
Yes
Source Reference Detail
Kenya Sustainable Finance Principles and Guidelines (KBA, 2015), page 14 & Kenya’s Green Bond Programme is endorsed by the National Treasury, Central Bank of Kenya and the Capital Market Authority Central Bank governor launched the Principles & Collaboration with external stakeholders as part of the Green Bonds Principles drafting
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 Green Bond Guidelines Background Document
Source Reference Description
(1) Page 14
P 1.7 – Does any inter-agency data sharing currently exist related to ESG integration by FIs?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 1 - ESG Integration - Regulatory and Industry Association Actions
Overall Approach & Strategy
P 1.8 – Does the Framework provide guidance on the role of the regulator or industry association with regard to assessing and managing ESG risk and performance in the financial sector?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 1.9 – Has the regulator or industry association undertaken market assessment to identify systemic ESG risks through analysis of the portfolios of supervised entities/members and published the results?
Yes
Source Reference Detail
The Kenya Bankers Association issued the “High-Level Market Assessment (Case Study) of Environmental Risk Exposure in the Banking Sector” in March 2020.
Source Reference Document
The Landscape of Climate Finance in Kenya Report
Source Reference Description
–
Pillar 1 - ESG Integration - Regulatory and Industry Association Actions
Technical Guidance
P 1.10 – Does the Framework provide technical guidance or tools to support implementation of ESG risk and performance management by the financial sector?
Yes
Source Reference Detail
Best Practice Standards
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 26 – 33
Pillar 1 - ESG Integration - Regulatory and Industry Association Actions
Supervisory Activities & incentives
P 1.11 – Is the implementation of the Framework regularly monitored and/or information regularly collected from FIs by the regulator and/or industry association?
Yes
Source Reference Detail
–
Source Reference Document
Report on the State of Sustainable Finance in Kenya’s Banking Industry
Source Reference Description
Page 4
P 1.12 – Does the regulator or industry association provide any financial or non-financial incentives for FIs to manage ESG performance as part of the Framework?
Yes
Source Reference Detail
Catalyst Awards
Source Reference Document
Report on the State of Sustainable Finance in Kenya’s Banking Industry
Source Reference Description
–
P 1.13 – Does the regulator or industry association apply any disincentives/penalties for non-compliance by FIs in terms of expectations from the regulator and/or industry association related to ESG risk management as part of the Framework?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 1 - ESG Integration - Regulatory and Industry Association Actions
Tracking & Aggregated Disclosure
P 1.14 – Has the regulator or industry association established a data collection approach and database to track or regularly publish data related to ESG integration by FIs as part of the Framework?
Yes
Source Reference Detail
–
Source Reference Document
Report on the State of Sustainable Finance in Kenya’s Banking Industry
Source Reference Description
Page 4
Pillar 1 - ESG Integration - Expectations of FI Actions
Strategy & Governance
P 1.15 – Does the Framework require/ask the FI’s board of directors (or highest governing body) to approve an ESRM and/or ESG integration strategy, and to supervise its implementation?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Principle 3 and 4
Pillar 1 - ESG Integration - Expectations of FI Actions
Organizational Structure & Capacity Building
P 1.16 – Does the Framework require/ask FIs to allocate resources/budget commensurate with portfolio ESG risks and define roles and responsibilities for ESG integration within the organization?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 29 – Principle 3 point 1, Page 32
P 1.17 – Does the Framework require/ask FIs to develop and maintain the ESG expertise and capacity of staff commensurate with portfolio ESG risks through regular training and learning?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 32 point 3
P 1.18 – Does the Framework require/ask FIs to create incentives for managers to reduce the ESG risk-level of the portfolio over a specified timeframe?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 1 - ESG Integration - Expectations of FI Actions
Policies & Procedures
P 1.19 – Does the Framework require/ask FIs to develop policies and procedures to identify, classify, measure, monitor, and manage ESG risks and performance throughout the financing cycle at the client level and/or the transaction/project level?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 28 – Principle3 point 1
P 1.20 – Does the Framework require/ask FIs to undertake a regular review and monitoring of ESG risk exposure at aggregate portfolio level?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 1.21 – Does the Framework require/ask FIs to establish and maintain an external inquiry/complaints/grievance mechanism for interested and affected stakeholders in relation to ESG practices?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 29 – Principle 3 point 2
Pillar 1 - ESG Integration - Expectations of FI Actions
Tracking, Reporting & Disclosure
P 1.22 – Does the Framework require/ask FIs to report ESG risks and performance to the regulator or industry association?
Yes
Source Reference Detail
–
Source Reference Document
Report on the State of Sustainable Finance in Kenya’s Banking Industry
Source Reference Description
Page 4
P 1.23 – Does the Framework require/ask FIs to report on ESG integration publicly?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 31 – Principle 5 point 2
P 1.24 – Does the Framework require/ask FIs to track credit risk (e.g. loan defaults) and/or financial returns in relation to ESG risk level?
Yes
Source Reference Detail
The management should establish an Environmental and Social Risk Management System (ESMS) to strengthen and mitigate impacts as defined in “Sustainable Finance Principle 3: Managing & Mitigating Associated Risks”. The credit analysis process should inlcude the review and categorisation of environmental and social risks; and consisit of (a) risk categorization, (b) assessment of risks, (c) benchmarking compliance with the local laws and regulations, and (d) defining the mitigation measures
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 28 – Principle 3
Pillar 2 - Climate Risk Management - Strategic Alignment
National Framework
P 2.25 – Has the regulator or industry association published a national framework (“Framework”) for the banking sector that sets out expectations for integrating the consideration and management of climate risks and their impact in the national economy?
Yes
Source Reference Detail
Kenya Bankers Association Sustainble Banking Principles and Guidelines (2015) recognize Africa’s vulnerability to climate change (apge 11) and refer to E&S risk as part of “Associated Risk” and credit analysis (page 22), and while not addressing climate risk directly, the Principles recognize the importance of climate change and the financial sectors role in mitigating climate change and measures to facilitate adequate adaptation to climate change as part of national climate policies. Priority sectors include agriculture, forestry, energy, extractive industries, transportation and tourism (page 33).
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Refer to description
P 2.26 – Has the relevant regulator or industry association published a Framework for capital markets, investment, insurance or other non-lending FIs that sets out expectations for integrating the consideration and management of climate risks and their impact in the national economy?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Strategic Alignment
Alignment with International Goals & Standards
P 2.27 – Does the Framework make reference to international agreements or frameworks to address climate?
Yes
Source Reference Detail
Kenya Bankers Association Sustainble Banking Principles and Guidelines (2015) align with UNFCCC commitments (Page 18) and national climate commitments (page 18). The Kenya-National Treasury-National Climate Finance Policy-2016 mentions UNFCCC, the Kyoto Protocol, the Copenhagen Accord, and the Paris Agreement, and SDGs.
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 National Treasury Climate Finance Policy, 2016
Source Reference Description
Kenya Bankers Association Sustainble Banking Principles and Guidelines (2015) align with UNFCCC commitments (Page 18) and national climate commitments (page 18). The Kenya-National Treasury-National Climate Finance Policy-2016 mentions UNFCCC, the Kyoto Protocol, the Copenhagen Accord, and the Paris Agreement, and SDGs.
P 2.28 – Does the Framework recognize or align with established regional or international good practice for climate risk management and disclosure by FIs?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Strategic Alignment
Alignment with National Goals & Strategies
P 2.29 – Has the regulator or industry association aligned the Framework with national goals to address climate change in line with the country’s Nationally Determined Contributions (NDCs) to the Paris Agreement?
Yes
Source Reference Detail
Kenya Bankers Association Sustainble Banking Principles and Guidelines (2015) align with UNFCCC commitments (Page 18) and national climate commitments (page 18). The Kenya-National Treasury-National Climate Finance Policy-2016 mentions UNFCCC, the Kyoto Protocol, the Copenhagen Accord, and the Paris Agreement, and SDGs.
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 National Treasury Climate Finance Policy, 2016
Source Reference Description
Page 18
P 2.30 – Does any cooperation exist between agencies, or between government and industry association, with respect to policy design or implementation related to climate risk management?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.31 – Does any inter-agency data sharing currently exist related to climate risk management by FIs?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions
Overall Approach & Strategy
P 2.32 – Has the regulator or industry association undertaken research on historical impacts to the economy and financial sector from climate change, and/or future expected impacts resulting from physical and transition climate risks?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.33 -Does the Framework identify key sources of GHG emissions – such as in particular sectors – as priorities in the proactive management of climate risks by the financial sector?
Yes
Source Reference Detail
SF Principles (Page 33) mentions key sectors for climate (agriculture, forestry, energy, extractive industries, transportation and tourism.) The SF Principles align with UNFCCC commitments (Page 18) and national climate commitments (page 18). The National Climate Action Plan 2018-2022, which discusses climate risks and sectors and economic impacts (pgs 18-24) and Action F4 (Pg 110) “Build the capacity of the private sector and civil society to develop bankable projects and build the in-house capacity of financial institutions to assess climate risk and develop climate-related schemes.”
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 National Climate Action Plan 2018 – 2022
Source Reference Description
Refer to description
P 2.34 – Does the Framework incorporate the conservation/restoration of natural carbon sinks (such as oceans, forests, mangroves, grasslands, and soils) as an important part of reducing climate change risks? (e.g., through guidelines, scenario analysis, targets, or incentives for FIs)
Yes
Source Reference Detail
The SF Principles (Page 33) mentions key sectors for climate (agriculture, forestry, energy, extractive industries, transportation and tourism.) The SF Principles align with UNFCCC commitments (Page 18) and national climate commitments (page 18). The National Climate Action Plan 2018-2022, which discusses climate risks and sectors and economic impacts (pgs 18-24) and Action F4 (Pg 110) “Build the capacity of the private sector and civil society to develop bankable projects and build the in-house capacity of financial institutions to assess climate risk and develop climate-related schemes.” In 2021, the Kenya Banking Association is initiating research on environmental risk assessment (including a focus on biodiveristy and water related risks and riparian land related to ecosystem services) and integration with financial decision-making as part of credit, legal and reputational risk management, and the study concept note includes consideration of climate-related risks.
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 National Climate Action Plan 2018 – 2022
Source Reference Description
Refer to description
P 2.35 – Has the regulator or industry association developed an internal strategy to address climate risk, and/or embedded climate risk management into its governance, organizational structures, and budget as part of the Framework?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.36 – Has the regulator or industry association undertaken any activities to expand and deepen analytical understanding of national and/or cross-border physical and transition climate risks, and to raise awareness as to how these risks may transmit to, and impact, the financial sector?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions
Technical Guidance
P 2.37 – Has the regulator or industry association developed risk assessment approaches, methodologies, or tools to understand and assess the financial sector’s exposure to climate risk as part of the Framework?
Yes
Source Reference Detail
In 2021, the Kenya Banking Association initiated research on environmental risk assessment (including a focus on biodiveristy and water related risks and riparian land related to ecosystem services) and integration with financial decision-making as part of credit, legal and reputational risk management, and the study concept note includes consideration of climate-related risks.
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions
Supervisory Activities & Incentives
P 2.38 – As part of the Framework, has the regulator clarified supervisory expectations with regard to climate risk management by FIs, including consideration of international good practices?
Yes
Source Reference Detail
In 2021, at the EU-Kenya Green Diplomacy Conference, the Governor of the Central Bank of Kenya signaled the importance of managing climate risks and the Central Bank’s intention to incorporate climate risk in the prudential surveillance framework as part of financial stability, and references the Kenyan Bankers Association Sustainable Finance Initiative (which inlcudes the SF Principles), and the intention to align with TCFD.
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
–
P 2.39 – Has the regulator started to explicitly embed climate-related risk in supervisory activities and review processes as part of the Framework?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.40 – Has the regulator started to explicitly embed climate-related risk in supervisory activities and review processes as part of the Framework?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.41 – Has the regulator started to explicitly embed climate-related risk in supervisory activities and review processes as part of the Framework?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions
Tracking & Aggregated Disclosure
P 2.42 – Does the regulator or industry association regularly collect and/or report market-level and/or FI-level data on climate-related financial sector risks as part of the Framework?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
Pillar 2 - Climate Risk Management - Expectations of FI Actions
Strategy & Governance
P 2.43 – Does the Framework require/ask FIs to establish a strategy for climate risk management with responsibility at the board of director level (or highest governing body)?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Expectations of FI Actions
Organizational Structure & Capacity Building
P 2.44 – Does the Framework require/ask FIs to define the roles and responsibilities and related capacities of the FI’s senior management and operational staff in identifying, assessing, and managing climate-related financial risks and opportunities?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Expectations of FI Actions
Policies & Procedures
P 2.45 – Does the Framework require/ask FIs to expand existing risk management processes to identify, measure, monitor, and manage/mitigate financial risks from climate change?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 2 - Climate Risk Management - Regulatory and Industry Association Actions
Tracking, reporting & disclosure
P 2.46 – Does the Framework require/ask FIs to report on their overall approaches to climate risk management in line with international good practices (e.g., TCFD), or establish a timeline by which FIs should begin to align their reporting with such practices?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.47 – Does the Framework require/ask FIs to identify, measure, and report on exposure to sectors which are vulnerable to transition risk and physical risk?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.48 – Does the Framework require/ask FIs to adopt and report on performance targets to reduce portfolio greenhouse gas (GHG) emissions on a regular basis?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 2.49 – Does the Framework require/ask FIs to adopt and report on performance targets to reduce exposure to climate change risks at the portfolio level on a regular basis?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 3 - Financing Sustainability - Strategic Alignment
National Framework
P 3.50 – Has the regulator or industry association published a national framework (“Framework”) for the banking sector that sets out expectations for integrating the consideration of instruments, goals, and standards for financing sustainability, including requirements for ensuring credibility and managing and measuring resulting impacts in the national economy?
Yes
Source Reference Detail
–
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
–
P 3.51 – Has the relevant regulator or industry association published a Framework for capital markets, investment, insurance or other non-lending FIs that sets out expectations for integrating the consideration of instruments, goals, and standards for financing sustainability, including requirements for ensuring credibility and managing and measuring resulting impacts in the national economy
Yes
Source Reference Detail
–
Source Reference Document
Green Bond Guidelines Background Document
Source Reference Description
–
Pillar 3 - Financing Sustainability - Strategic Alignment
Alignment with International Goals & Standards
P 3.52 – Has the regulator or industry association developed a strategy, regulations, or set of frameworks for stimulating the allocation of capital to sustainable assets, projects, and related sectors in line with global goals, such as the Sustainable Development Goals (SDGs)?
Yes
Source Reference Detail
–
Source Reference Document
National Treasury Climate Finance Policy, 2016
Source Reference Description
–
P 3.53 – Does the Framework recognize and/or align with existing standards, voluntary principles, or market good practices related to sustainable finance instruments?
Yes
Source Reference Detail
Kenya Green Bond Guidelines Background Document (Kenya Green Bonds Programme, 2019), page 7 (4) & NSE Listing Rules (NSE, 2018) – page 8 (Green Guidelines and Standards)
Source Reference Document
Green Bond Guidelines Background Document NSE Listing Rules
Source Reference Description
(1) Page 7 (2) Page 8
Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions
Alignment with national goals & strategies
P 3.54 – Does the Framework enable the achievement of stated national objectives by guiding capital to sectors, assets, and projects that have environmental and social benefits in line with national sustainable development priorities, strategies, targets, and the size of sustainable investment needs, and taking into account the local barriers to scaling-up sustainable finance?
Yes
Source Reference Detail
–
Source Reference Document
National Treasury Climate Finance Policy, 2016
Source Reference Description
–
P 3.55 – Does the Framework enable the achievement of stated national objectives by guiding capital to sectors, assets, and projects that have environmental and social benefits in line with national sustainable development priorities, strategies, targets, and the size of sustainable investment needs, and taking into account the local barriers to scaling-up sustainable finance?
Yes
Source Reference Detail
Kenya Sustainable Finance Principles and Guidelines (KBA, 2015), page 14 & Kenya’s Green Bond Programme is endorsed by the National Treasury, Central Bank of Kenya and the Capital Market Authority Central Bank governor launched the Principles and Collaboration with external stakeholders as part of the Green Bonds Principles drafting
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 Green Bond Guidelines Background Document
Source Reference Description
–
P 3.56 – Does any inter-agency data sharing currently exist related to stimulating and monitoring sustainable finance flows?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 3 - Financing Sustainability - Strategic Alignment
Overall Approach & Strategy
P 3.57 – Does the Framework require/ask the regulator or industry association to establish mechanisms to identify and encourage the allocation of capital to sustainable sectors, assets, and projects?
Yes
Source Reference Detail
–
Source Reference Document
National Treasury Climate Finance Policy, 2016
Source Reference Description
–
Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions
Technical Guidance
P 3.58 – Does the Framework require/ask the regulator or industry association to establish mechanisms to identify and encourage the allocation of capital to sustainable sectors, assets, and projects?
Yes
Source Reference Detail
–
Source Reference Document
Kenya Green Bond Guidelines Background Document (Kenya Green Bonds Programme, 2019), page 7, 8, 12 & Listing Rules (NSE, 2018) 18
Source Reference Description
–
P 3.59 – Does the Framework provide guidelines for extending green, social or sustainability-focused loans (excluding bonds)?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 3.60 – Does the Framework provide guidelines for issuance of green, social or sustainability bonds?
Yes
Source Reference Detail
Kenya Green Bond Guidelines Background Document (Kenya Green Bonds Programme, 2019), page 10 & NSE Listing Rules (NSE, 2018), page 8
Source Reference Document
Kenya Green Bond Guidelines Background Document NSE Listing Rules (NSE, 2018)
Source Reference Description
(1) Page 10 (2)Page 8
P 3.61 – Does the Framework require/ask for external party verification to ensure the credibility of sustainability instruments?
Yes
Source Reference Detail
Kenya Green Bond Guidelines Background Document (Kenya Green Bonds Programme, 2019), page 8 (2.) & page 11 (Part 5.) & Listing Rules (Nairobi Stock Exchange, 2018), page 20 (Procedure for admission to listing for Green Bonds – 2.13.1)
Source Reference Document
Kenya Green Bond Guidelines Background Document NSE Listing Rules (NSE, 2018)
Source Reference Description
(1) Page 8 point 2, Page 11 Part 5 (2) Page 20 – 2.13.1
Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions -
Supervisory activities & incentives
P 3.62 – Does the regulator or industry association monitor information reported by FIs related to green/social/sustainability investment, lending, and other instruments to prevent greenwashing and social-washing?
Yes
Source Reference Detail
The POLICY GUIDANCE NOTE ON GREEN BONDS states: “In instances where greenwashing has occurred, the action may constitute a fraud on, or misrepresentation to investors and therefore may be punishable under the Laws of Kenya.”
Source Reference Document
NSE Listing Rules (NSE, 2018)
Source Reference Description
Page 9 clause 2.15
P 3.63 – Are there any financial or non-financial incentives for FIs to develop and grow green, social, or sustainability finance instruments?
Yes
Source Reference Detail
The governance exempt investors from paying withholding taxes on their interest earnings from such bonds; The Kenya Green Bond Market Issuer’s Guide p25.
Source Reference Document
Green Bond Market Issuers Guide, NSE, 2018
Source Reference Description
Page 25
Pillar 3 - Financing Sustainability - Regulatory and Industry Association Actions -
Tracking & Aggregated Disclosure
P 3.64 – Does the regulator or industry association collect and/or publish data from FIs or other sources about allocation of capital to green/social/sustainability assets, projects, or sectors?
Yes
Source Reference Detail
SFI voluntary reporting
Source Reference Document
Report on the State of Sustainable Finance in Kenya’s Banking Industry
Source Reference Description
Page 4
Pillar 3 - Financing Sustainability - Expectations of FI Actions
Strategy & Governance
P 3.65 – Does the Framework require/ask FIs to establish a strategy, governance, or high-level targets, including at the Board of Directors level, for capital allocation to sustainable assets, projects, or sectors?
Yes
Source Reference Detail
Principle 5 “In the board planning process, there is the need for reorienting growth strategies and the organisational vision, mission and objectives to ensure that equal weight is given to the economic, social and environmental dimensions of organisational sustainability.”
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Principle 5
Pillar 3 - Financing Sustainability - Expectations of FI Actions
Organizational Structure & Capacity Building
P 3.66 – Does the Framework require/ask FIs to define internal staff roles and responsibilities to encourage finance flows to green, social, and/or sustainability-focused investments?
Yes
Source Reference Detail
“Review of job profiles, roles and responsibilities should incorporate SFI Principles and Procedures across targeted departments, including finance, credit risk, business department, operations and compliance.”
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 32
P 3.67 – Does the Framework require/ask FIs to develop and maintain internal staff capacity on green, social, or sustainability products through regular training and learning?
Yes
Source Reference Detail
Talks about “Board and management capacity building on best practice in Sustainable Finance.” pg 33
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015
Source Reference Description
Page 33
Pillar 3 - Financing Sustainability - Expectations of FI Actions
Policies & Procedures
P 3.68 – Does the Framework require/ask FIs to put in place policies and procedures for defining, issuing, managing proceeds, tracking performance, and reporting on green, social or sustainability-focused products?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 3.69 – Does the Framework require/ask FIs to appoint an independent external reviewer to confirm that the FI’s internal framework meets the requirements of the recognized national framework and regulations, or aligns to international standards?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 3.70 – Does the Framework require/ask that FIs create incentives for managers to increase sustainable loans or investments in the portfolio?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
Pillar 3 - Financing Sustainability - Expectations of FI Actions
Tracking, reporting & disclosure
P 3.71 – Does the Framework require/ask FIs to publish annual updates on the performance and impacts of the sustainability instruments in compliance with relevant national and/or international standards?
Yes
Source Reference Detail
“The board of directors and management should adopt to publish a comprehensive sustainability report once every two years (at a minimum). Reporting on the institution’s contribution to sustainable economic development (beyond financial performance) and progress towards realisation of the “Sustainable Finance Principles” should be incorporated in the annual integrated financial reports.” Also, Kenya Green Bond Guide asks issuers to publish annual green bond reports.
Source Reference Document
Sustainable Finance Principles and Guidelines, KBA, 2015 Green Bond Guidelines Background Document
Source Reference Description
Principle 5
P 3.72 – Does the Framework require/ask FIs to obtain and disclose independent review of metrics reported annually in relation to the social and environmental outcomes and impacts achieved through the sustainability instruments?
Yes
Source Reference Detail
“Board and management evaluation and reporting of performance against Sustainable Finance priorities as defined by the board and management through consultation. May include an independent, third-party assessment.”
Source Reference Document
–
Source Reference Description
–
P 3.73 – Does the Framework require/ask FIs to obtain and disclose independent review of metrics reported annually in relation to the social and environmental outcomes and impacts achieved through the sustainability instruments?
No
Source Reference Detail
–
Source Reference Document
–
Source Reference Description
–
P 3.74 – Does the Framework require/ask FIs to report to the regulator(s) or industry association(s) on green, social, and/or sustainability bonds or other positive impact investments?
Yes
Source Reference Detail
Submission of the Information Memorandum
Source Reference Document
NSE Listing Rules (NSE, 2018)
Source Reference Description
–
P 3.75 – Does the Framework require/ask FIs to report publicly on their green, social and sustainability-focused finance activities and positive outcomes or impacts (i.e. not only to the regulator or shareholders)?
Yes
Source Reference Detail
“The board of directors and management should adopt to publish a comprehensive sustainability report once every two years (at a minimum). Reporting on the institution’s contribution to sustainable economic development (beyond financial performance) and progress towards realisation of the “Sustainable Finance Principles” should be incorporated in the annual integrated financial reports.”
Source Reference Document
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Source Reference Description
Principle 5
