In Summary
- The newly launched reporting template seeks to boot sustainability in the banking sector.
- Kenya is among the african countries adversely affected by climate change
Kenya Bankers Association (KBA) on Thursday launched the climate-related financial disclosure reporting template that provides an outline of how the country’s commercial lenders can manage financial risks associated with climate change.
Habil Olaka, chief executive officer of the KBA, said that the template is anchored on the four pillars that underpin banking operations, including governance, strategy, risk management, and targets.
“By adhering to these disclosures, the banks can enhance transparency and communicate their approach to climate-related risks and opportunities,” Olaka said during the Africa Climate Week conference.
Kenya is among African countries that have borne the brunt of the climate crisis as witnessed by severe droughts, water stress, and food insecurity.
Olaka said the financial disclosure reporting template will provide procedures on how banks can undertake hazard mapping to manage the impact of climate risks such as floods and droughts on its assets.
Paul Russo, governing council member of the KBA, said the financial disclosure reporting template contains risk identification and assessment tools that ensure that commercial lenders reduce their energy consumption as well as minimize wastage of resources.
Russo noted that the guidelines will ensure banks operating in Kenya maintain sufficient capital to enable them to withstand extreme climate events.
He said the financial disclosure reporting template also guides financial institutions to disclose metrics that will be used to measure the amount of carbon emitted by the assets they have financed their client.
