The UN COP26 Climate Summit Should Inspire Us to Redouble Our Climate Efforts

This week, governments, business leaders, and sustainability experts are meeting in Glasgow for the UN Conference of Parties (COP26); a world-leading summit that seeks to promote in-depth discussions on climate matters. At the top of the agenda will be discourses touching on strategies on how to achieve below 1.5C warming target, mobilization of public and private funds to tackle the deficit in climate finance and best interventions strategies in approaching climate change.?

The summit brings parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change.

All countries need to take climate action. COP26 will be an opportunity for the global economy to assess the progress since the 2015 Paris Agreement. As such, COP26 charts a new course in the global climate effort.

The business case for sustainability – including environmental sustainability and climate risk management – has never been stronger. And the private sector have a role to play in climate change mitigation and adaption as part of every country’s?

In today’s ever-evolving world, debating whether to incorporate sustainability into your business strategy is no longer an option. Successful business strategies now include doing well and doing good. A business’ ability to participate in solving social and environmental factors is a major indicator of success.?

It is this invaluable goal that the Sustainable Development Goal 13; Climate Action aims to accelerate fight against climate change by intensifying the actions and investments needed for a sustainable low-carbon future.?

Over the years, Kenya has taken great strides in this quest, leading to the country increasing its emissions reduction target from 30% to 32% by 2030 in its 2020 Nationally Determined Contribution (NDC) to the Paris Agreement. This commitment set the country below the baseline of 143Mt of CO2 eq— excluding land and land-use change).

From an industry perspective, the financial sector is at the core of driving inclusive economic growth, directly and indirectly impacting the economy. We are, therefore, required to show leadership towards Sustainable Development Goals and play our role in influencing sustainability performance across various sectors.?

At KCB Group, we are committed to best practices; embedding the UNEP FI Principles for Responsible Banking while ensuring that our strategic initiatives are aligned with the UN SDGs, the Paris Climate Agreement, UN Global Compact Principles. Our ambition is to not only contribute but lead the region in which we operate, in the race towards net-zero by 2050.

Additionally, the Green Agenda runs in our entire business from identifying new strategic partnership opportunities, financing solutions, to funding mechanisms and best practices that can be deployed by our customers.??We continue to ensure that our funding is geared towards supporting initiatives that work towards the achievement of SDGs having adopted 9 of the 17 SDGs. We have gone further to put in place a Social and Environmental Management System policy and Sustainability policy to help us integrate the social and environmental risk assessment into our operations and we monitor this on a quarterly basis to ensure that we are cognizant of our environmental and social risk. On an annual basis, we conduct an assessment on the percentage of the corporate book that is Environmental and Social Impact Assessment (ESIA) compliant.?

It is this commitment that saw us emerge as the regional winner for Outstanding Leadership in Sustainable Loans in the Sustainable Finance Awards 2021 - an award program established to recognize leadership in Sustainable Finance that includes funding for initiatives designed to mitigate the negative impacts of climate change and help build a more sustainable future for humanity.

We now have an enhanced opportunity for portfolio re-imagining in the green lending space. We are looking at increasing our green finance portfolio by 15% over the next 5 years. Cumulatively, green projects estimated within our corporate and SME portfolio combined stood between approximately US$ 162 million and US$ 188 million in 2020. This equates to at least 4.2% of the net loans issued by the Group.

Additionally, we are taking decisive action to reduce carbon emissions from our owned sources, as well as our direct and indirect resource consumption. In 2020, we recorded a 23% reduction in our internal carbon emissions against a target of 10%. We aim to reduce emissions from our lending portfolio and to be a net zero by 2050 on our scope 3 emission by 2050.

As such, the KCB Group is thrilled to join COP26 this week as an opportunity to learn and network with other like-minded organizations as well as share the case studies of how we have contributed to this agenda. Furthermore, having signed to be part of the net-zero emitters by 2050, we will be keen to support the adoption of the Net-zero emissions policy that Australia’s Prime Minister Scott Morrison will be presenting to the COP26 climate summit. We believe there’s a lot that we can learn from Australia’s plans and strategies being that it very heavily relies on coal and carbon-producing industries.

Whether you are a startup, MSME, or large corporate, COP26 offers us an opportunity to strategically unite for a common purpose. And indeed, concerted efforts are the impetus in the race towards net zero in this decade – the decade of action. Let’s join hands, make commitments and take this first step towards a brighter tomorrow.