Central Bank of Kenya Advances Green Finance Initiatives

NAIROBI – The Central Bank of Kenya (CBK) has reaffirmed its initiative to foster sustainable practices within the Kenyan financial sector, urging stakeholders to adhere to its guidance on climate-related risk management.

According to Kenya News Agency, Governor Dr. Kamau Thugge addressed the conclusion of the Africa Climate Business Forum (ACBF) in Nairobi, where he underscored the advancements made by commercial banks in integrating the October 2021 guidelines into their operations. The guidelines aim to embed climate-risk considerations into banks’ governance, strategy, and risk management protocols, as well as to establish clear disclosure practices.

Dr. Thugge highlighted the beginning of a second phase of reforms, centering on the development of a green finance taxonomy. This taxonomy will define eco-friendly activities and investments to guide banking operations. An additional disclosure framework aligned with international standards, including those of the International Sustainability Standards Board (ISSB), is also under development to bolster transparency and attract investment in Kenya’s green economy transition.

Emphasizing the economic opportunities the transition presents for businesses of all sizes and households, Dr. Thugge expressed confidence that these reforms will encourage domestic and international investment. He also noted the CBK’s membership since April 2022 in the Network of Greening Financial Systems (NGFS), which comprises over 100 central banks and financial supervisors worldwide, dedicated to fulfilling the Paris Agreement objectives and supporting sustainable development through the financial sector.

The CBK governor remarked on the timeliness of the ACBF, following the Africa Climate Summit in Nairobi and preceding the COP 28 summit in Dubai, UAE. Dr. Thugge stressed the collective efforts of central banks in shaping Africa’s voice in global climate solutions, as envisioned in the Nairobi declaration from the summit.

Dr. Thugge concluded his remarks by commending the International Finance Corporation (IFC) for their collaborative efforts in making the ACBF a success and expressed optimism for Africa’s representation at the upcoming COP 28.

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