The development of the Kenya Sustainable Finance Initiative by KBA is a watershed in the evolution of our banking industry. It is the first attempt to have a unitary set of principles that banks can rely on to underpin sustainability in their day-today operations and decision-making. While the principle of sustainability is not new among Kenyan banks, its application has always been disparate, uncoordinated and largely at the level of individual institutions.

A recent study commissioned by KBA on the subject showed that there was extant need for a set of "industry-wide" guidelines on sustainable banking. It was the submission of the research that such guidelines apply to all banks and cover all their transactions and operations. The author, Mr. Francis Kariuki, called for sector-specific principles to inform lending decisions involving key sectors such as agriculture, tourism, energy and manufacturing.

The formulation and issuance of the Kenya Sustainable Finance Principles could not have come at a more opportune moment. Since the coming into force of the new Constitution of Kenya in 2010, financial sustainability is no longer a way to court morality, profit or competitive advantage among peers; it is a constitutional imperative. The Kenyan Constitution expressly requires that development be pursued sustainably by all, and that includes financial sector players.

Under Article 10 (2) of the Constitution, sustainable development is a national value and principle of governance, binding every person and state organ. Moreover, Article 69 (2) places an obligation on every citizen to cooperate with state organs and other persons to protect and conserve the environment and ensure ecologically sustainable development and use of natural resources.

While most banks have relied on their traditionally strong suites of corporate social investment (CSI) programs as a way of attaining sustainability, and while not taking away from the immense societal good some of these initiatives have spawned all over the country, corporate philanthropy cannot deliver or lead to sustainable development.

These harmonized guidelines present a great opportunity for the wide and uniform adoption of sustainability practices in the activities and operations of KBA members.This will provide a solid foundation for sustainable development in various sectors of our economy, in pursuit of the industry's role as a facilitator of growth, as outlined in Vision 2030, our flagship national blueprint.

And despite the initial cost of compliance, we believe investment in a sustainable finance infrastructure and culture within our financial services sector is sound strategic business. In the long run, as evidenced by institutional memory and recent experience from the rest of our global peerage, successful banks in the marketplace will not just be those that consistently extend financial services to viable businesses. It will be those banks that have attained an optimal balance between the pursuit of profit and shareholder value on one hand and the health of the planet and the welfare of man on the other.

Joshua Oigara
Chairman, Kenya Bankers Association (2014 – 2016)

We, the members of the Kenya Bankers Association (KBA) and representatives of the Kenyan Banking Industry, believe that in order to have long-term business success, there is a need to recognize our environmental and social responsibilities while simultaneously meeting our economic responsibilities and financial objectives. We believe that such an approach can enhance innovation, competitiveness and the quality of the credit portfolio of both individual banks and the industry.

We furthermore believe that the financial sector has a key role to play in achieving Kenya's long-term sustainable development goals as outlined in the Kenya Vision 2030. Through the integration of sustainability issues directly into our core business, we can fundamentally contribute to the greening of business and industry, job creation and social inclusion, thus helping society to address sustainability challenges such as social inequity, climate change, resource scarcity and biodiversity loss. We are prepared to take steps to ensure that our investment activities are carried out in line with international best-practices in Sustainable Finance, and with due regards to the Kenyan context.

We, hereby, commit to:

Corporate Sustainability, which means transparently managing our responsibilities for environmental stewardship, social well-being and economic prosperity over the long term, while being held accountable to our shareholders;

Setting up a Working Group (Sustainable Finance Initiafive) to prepare a set of Kenyan Sustainable Finance Principles in the next 12 months, which will be in line with international best practices and consistent with the industry's environmental and social risk management aspirations. The Principles will be relevant to the KBA General Body overall yet responsive to individual banks' credit risk policies. The KBA Secretariat will coordinate the Sustainable Finance Initiative that will report to the General Body via the Governing Council; and

Develop Internal Capacity as required to manage our environmental and social responsibilities, with focus on commercial/ credit risk management.


This Commitment Statement was ratified by the Kenya Bankers Association member bank Chief Executive Officers during the inaugural CEO Roundtable on Sustainable Finance on 10th September, 2013.

The SFI Working Group approach centered on "3 Ps", namely 1) defining sustainability and setting out the Priorities; 2) harmonising global and regional best practices and defining the 5 core Guiding Principles; and 3) singling out a set of Procedures and Policies that reflect the philosophy and enable the Principles.

Defining Sustainability from a Financial Sector Perspective

The process of developing the principles and building industry wide capacity is motivated by the industry's desire to support efforts towards making Kenya and the EAC region more globally competitive. It demonstrates that apart from deepening financial inclusion and contributing towards sustainable economic growth, banks in particular are also concerned about the other challenges that Africa currently faces in the areas of climate change and environmental degradation, social exclusion and resource scarcity.

Defining Sustainable Finance was therefore guided by this ambition and set out to harmonise the divergent views of "sustainability" from a financier's perspective. Economic Sustainability was therefore core, with Social Sustainability and Environmental Sustainability serving as the twin co-focus areas.

Process Towards Developing the Guiding Principles

The development of the Kenya Sustainable Finance Principles started in September 2013 with the convention of a CEO Roundtable at which banks committed to the vision. Critical to this initiative was the support of UNEP Finance Initiative (UNEP-FI), DEG (German Investment Corporation) and the Netherlands Development Finance Company (FMO).

Bank CEOs ratified the launch of the Sustainable Finance Initiative (SFI), putting Kenya at par with countries that have launched similar initiatives led by either regulators or banks.

The next step was the formation of the SFI Working Group consisting of the KBA Secretariat and 12 banks to actualize the vision, with the task of developing recommendations, including those on capacity building and the development of Sustainable Finance Guiding Principles for the East African region.

SFI Working Group Banks

  • Bank of Africa
  • Commercial Bank of Africa
  • Cooperative Bank of Kenya
  • Equity Bank
  • Gulf African Bank
  • Habib Bank
  • I&M Bank
  • Jamii Bora Bank
  • KCB Group
  • NIC Bank
  • National Bank of Kenya
  • Standard Chartered Bank

The SFI Working Group formed three teams to deal with Principles and Procedures, Capacity Building and the Green Economy. The SFI identified its priority areas as comprehensive risk management; business practice, leadership and governance; and growth through inclusivity, innovation and technology.

Subsequently, Five SFI Guiding Principles were drafted and presented for review to the Working Group and the KBA Governing Council.

The SFI’s input will also be critical in the development of a structured Capacity Building program. The primary targets are credit risk managers, business development and strategy heads and operations officers, before it is escalated into practice-sharing sessions for CEOs and Boards.

SFI Roadmap


KBA, UNEP-FI, Citibank Training for KBA member banks

2010 - 2012

Bank engagement and sensitisation

Nov. 2012

KBA Governing Council adoption of Sustainability Agenda as industrywide priority

Sept. 2013

CEO Roundtable supported by UNEP-FI, DEG and FMO

Sept. 2013

Banks Adopt Sustainable Finance Commitment Statement & Establish the Sustainable Finance Initiative convened by KBA

Nov. 2013

SFI Working Group constituted

Nov 2013

SFI Working Group courtesy call to UNEP Secretary General & UN Under Secretary

Jan. 2014

SFI commences with defining Sustainability from financial sector perspective & defining scope of the Initiative (priorities)

 Feb. – Oct. 2014

Work on the SFI Principles coordinated by KBA

July 2014

Funding by DEG &FMO for industry Capacity Building Program

July– Aug. 2014

Capacity Building Needs Assessment & Strategic Planning

Oct. 2014

External Stakeholder Engagement on Principles

 Oct. 2014

Adoption of Capacity Building Strategy

Nov. 2014

Principles tabled to General Body

Oct. 2014 – Jan. 2015

Work on SFI Best Practice Standards, with stakeholder feedback

Nov. 2014 - June 2015

Development of capacity building program 

March 2015

Industrywide adoption of SFI Guiding Principles

Chairman's Message