Across the world, banks are no longer settling for the role of financial intermediaries, they are fast evolving into architects of the future. And with calls for climate-conscious decisions growing even louder, corporates, including banks in Kenya are making their mark.

Last year, financial institutions in Kenya took steps toward steering the country's sustainability agenda, with Absa Kenya playing a lead role in powering green transformation.

Absa Bank's 2023 Sustainability Report shows that the lender disbursed KES60 billion to organizations and individuals to cultivate a sustainable future for the country. Out of this funding, KES22.3 billion was channeled towards climate and sustainability-linked finance initiatives.

For instance, Absa was one of the financiers involved in financing telco giant Safaricom PLC’s KES20 billion sustainability-linked loan in 2023.

The report shows that borrowers undertaking renewable energy, climate-smart agriculture, and green building initiatives were some of the biggest beneficiaries.

“In today’s world, our stakeholders—whether they are investors, regulators, or customers - expect more from us. They want to see the bigger picture, understanding not only how we create value for our shareholders but also the broader impact we have on society and the environment,” noted Absa Bank Managing Director and CEO Abdi Mohamed during the report launch.

Absa Kenya Foundation

“We remain committed to providing sustainable financial solutions that support businesses, hence facilitating economic growth. Our sustainability journey is a testament to our commitment to making a positive impact on society and the environment,” the CEO added. Further, this year, the Pan-African bank is close to launching Absa Kenya Foundation, an initiative which Mr Mohamed said will be a key vehicle in the financial services institution's sustainability journey in the years ahead.

Across the world, lenders are increasingly integrating climate risk into their financing portfolios, an area that Absa Bank has taken a keen interest. In 2023, the bank devoted KES14.1 billion towards renewable and clean energy, effectively aligning with international trends.

During the year under focus, Absa Bank partnered with SunKing in a KES2 billion undertaking, further driving the adoption of solar-powered products targeting communities living in areas away from the main electricity grid.

At the same time as the trend in the construction industry sought sustainable buildings, Absa Bank Kenya disbursed KES2.9 billion to borrowers undertaking green building projects. With this initiative, the lender is increasingly ensuring that structures in Kenya embody the principles of sustainability in energy usage, water consumption, and the materials used in their construction, too.

Read also: Sowing the seeds of sustainability with green financing

Increasingly, green buildings are gaining traction as individuals and organizations roll out plans to cut emissions. By Absa Bank retrofitting 85 of its sites in 2023 with energy-saving technology, the lender further enhanced its programmes to sync with global standards of cutting its carbon footprint.

Speaking at the event, Dr. Eng. Festus Ng’eno, the Principal Secretary, State Department of Environment and Climate Change, said: “Absa’s dedication to integrating sustainability into its core operations sets a precedent for other financial institutions and indeed, for all sectors of the economy.”

What's more, an 8 per cent cut in the lender’s emissions might sound modest, but for an organization with a presence across Kenya, this is a critical step that takes it closer in meeting its net-zero status by 2050.

Absa's trajectory mirrors international pledges, such as the Paris Agreement, which calls for cuts in CO2 emissions to combat the adverse effects of climate change.

Absa Bank Kenya Sustainability Journey 2021-2024 highlights

In 2023, Kenya’s agriculture industry, which is one of the sectors in the country under the constant threat of climate change, also benefitted. The bank directed KES2.2 billion toward climate-smart agriculture, enabling farmers to enhance their resilience.

Farmers in Kenya, just like in most parts of the world, are increasingly facing the negative effects of unpredictable weather patterns, threatening the livelihoods of millions of people. By offering farmers the capital to build resilience, Absa is playing a critical role in buttressing Kenya's food security initiatives at a time of extreme weather events.

Kenya's small scale business segment also benefitted from Absa's green financing initiatives. The 2023 sustainability report shows MSMEs received a total of KES36.9 million, offering much needed capital to a sector that has traditionally experienced underfunding, thereby offering these traders a pivot to enhance sustainable development.

In the bank's See Her Empowered (SHE) Star program, up to 35,000 women-led businesses were empowered in 2023. With this initiative, Absa Bank is not only leveling the playing field but also taking a step in offering women-led businesses a hand-up to succeed in a competitive economy.

A further 14,000 entrepreneurs drawn from different industries received specialized business training and capacity-building coaching to power growth, the lender’s sustainability report shows.

Seeds of sustainability

Absa's environmental goals are aligned with Kenya's plan to plant 15 billion trees by 2032. This move is poised to increase the country's forest cover and help reverse the adverse impacts of global warming on the country’s climate. In 2023, Absa planted over 728,000 trees, making a mark in Kenya's broader forestry agenda.

As simple as it may sound, tree planting is one of the most powerful tools in the fight against climate change and global warming. Across the continents, reforestation projects are playing a vital role in sequestering carbon, thereby restoring ecosystems.

In the Birdies for Trees project, for instance, Absa undertook to plant 100 trees for every birdie scored during the Magical Kenya Open, a fun and exciting way of championing climate action. Beyond that, the bank extended its partnerships, working with Athletics Kenya to plant 2,500 trees at Kasarani Stadium.

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