Co-op tops KBA awards as lenders embrace sustainable practices

Co-operative Bank's representatives receive the Overall winners' award of the 2023 Sustainable Finance Catalyst Awards on November 15, 2023. [Wilberforce Okwiri, Standard]

Co-operative Bank of Kenya emerged the overall winner in this year’s Sustainable Finance Catalyst (SFI) Awards organised by the Kenya Bankers Association (KBA).

Equity Bank Kenya emerged second overall as Absa Bank Kenya came third.

The awards recognise firms in the banking sector whose efforts aim to create long-term value not only for their clients but also for the environment.

The award ceremony in Nairobi yesterday was graced by Nairobi Securities Exchange Chief Executive Geoffrey Odundo, Financial Sector Deepening (FSD) Kenya CEO Tamara Cook and KBA’s Habil Olaka.

Mr Odundo said as banks pursue profitability, the business environment is changing with investors becoming more interested in sustainable business services to guide their decisions.

“How you handle environmental, social and corporate governance becomes a key parameter for you to get any funding,” he said.

“We are seeing investors coming for business opportunities but we also see others migrating because they want institutions and companies that are conscious on climate risks.”

He said the SFI awards are a good commitment of the sector towards sustainability.

The awards sponsored by FSD Kenya had eight categories. Absa Bank Kenya was the winner in the Best Sustainable Finance and Best Bank Operation categories.

Equity Bank Kenya emerged as the best in the Retail MSME category.

Best Client Case Study-Commercial category was won by Co-operative Bank of Kenya which also won Most Innovative Bank, Best Client Case Study -Gender Inclusivity and emerged best as well in Promoting Persons with Disabilities Accessibility category.

Ms Cook underscored the key role sustainability has to play in the current economic challenges citing it as the breakthrough path for financial institutions.

“We are in tough times now, in Kenya and globally, due to the inflation rate, interest rates and the whole economic situation; everything is tough. “But it is tougher for people who are affected by climate change in arid and semi-arid lands and remote regions.”

She said sustainability is the way out for financial institutions and if they can reconfigure their credit scores to intentionally target small enterprises, women and agriculture, then their business can last beyond the trying period.

“Sustainability will give you the competitive edge to last the tough times,” said Cook, adding that banks have struggled to reach these populations because they do not understand their risks.

KBA chief executive Olaka said the industry has played a leading role in encouraging sustainable operations.

He quoted the Sustainable Finance in Kenya Banking Business Report 2020, which shows that 85 per cent of banks indicated that their credit policy ensures responsible lending that promotes sustainable development.

The same report also indicated that 76 per cent of banks had integrated environmental and social management systems.

“The statistics are a clear indicator of the encouraging progress the banks have made in addressing sustainable banking practices and managing related risks,” he said. Dr Olaka noted, however, that 57 per cent of banks were publishing sustainability reports that were not integrated with their financial results.

“The scale of the negative impact of climate change is increasingly becoming real day after day. We do not have the luxury to sit pretty.

“Transitioning to a low carbon economy is not only inevitable but also urgent.”

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