Absa Bank Kenya PLC will double its sustainability financing to Ksh. 120 billion to refresh the bank’s sustainability commitment. This was announced in the bank’s sustainability report launch for the year ending in December 2022. During the launch, Absa Bank CEO Abdi Mohamed revealed that they had already disbursed Ksh. 60 billion in green financing.
Expanding sustainability investment will support growth in all economic sectors. The boost will enable the bank to play a bigger, bolder role in sectors, such as renewable energy, efficiency, green building, and climate-smart agriculture. This is part of the commitment to the Sustainability Agenda launched in 2020.
The benefits of Absa Bank’s sustainable financing
In addition, the bank acknowledges that Kenya only contributed to 0.1% of greenhouse gas emissions. However, transitions still need to be made to reduce the impact of climate change within the country. The expanded sustainable financing will help investors ensure they can make the transition without sacrificing income generation. Absa Bank’s sustainable financing comes with incentives to keep customers on the sustainability path. The bank also provides discounts for banking fees for customers who choose paperless statements. They additionally get preferential interest rates to customers who commit to the achievement of sustainability-linked targets.
The bank will provide online tools to enable customers to track their environmental impact and a mobile app where customers can monitor their carbon footprint. Customers will also get the opportunity to invest in sustainable bonds to finance environmentally forward projects such as renewable energy.
Sustainability framework, and achievements
Absa Bank’s sustainability framework involves the environment, social wellness, governance, advocacy, and public policy. Since 2020, the bank has remained steadfast in meeting these goals. In 2021, the bank streamlined and trained its employees to meet the needs of the sustainability goals. In 2022, Absa created a climate-related risk management framework, and finally, in 2023, the bank approved a sustainable finance strategy.
This is in line with the UN Sustainable Development Goals. Absa Bank’s SDGs include education, decent work, reduced inequalities, economic growth, and responsible production and consumption. The bank also acknowledges the roles of major institutions in mitigating the effects of climate change.
Thus far, the bank has converted 20% of its financial portfolio to invest in sustainability. They also have 50:50 gender parity with a 46:54 ratio in leadership. 72,000 students benefited from the Computers for Schools program while 247,000 youth were empowered by the Ready to Work initiative. 1 million trees have been planted so far with a target of 10 million trees by 2025, and increase the country’s forest cover by 15 billion by 2032. All head offices are certified green. The company has goals to achieve net zero carbon emissions by 2040. The bank has also created a circular economy with its Bombolulu initiative and recycling branding materials. It also increased internal efficiency by reducing its carbon footprint by 26%.
The bank has noted its environmental impact by adhering to the Equator Principles which determines the environmental risk in all projects. In 2019, the bank signed on to the UN Principles for Responsible Banking. This ensures the bank’s role in meeting the UN’s SDGs. The bank saw a 13% reduction in its energy footprint. The bank also saw energy consumption savings when it achieved IFC EDGE certification in five stations in 2022. These are Westend Headquarters, Bishops Gate Offices, Queensway, Nkrumah Road, and Kisii branches. 48% of waste was recycled in 16 of the bank’s Nairobi sites. Absa Illustrates The Importance Of SDGs & Its Actions Towards Becoming A Force For Good For Its Customers & Community
Absa Bank was also the first to join the Kenya Green Buildings Society with an aim to reduce pollution, improve lives, and foster economic growth. It is also changing its procurement methods, ensuring that suppliers are trained in sustainability. The bank also ensured that it gained more inclusivity within its supply chain, offering more opportunities to youth, women, and persons with disabilities. Collaborating with the International Finance Corporation, the diversity of the supply chain increased from 6% in 2021 to 10% by 2022.
Ultimately, the bank hopes to be the leading African financier in sustainable finance. Absa Bank will also incorporate climate change risk into the business. The bank also intends to create a net positive impact on the community and environment. The bank has also committed to promoting the restoration of degraded forests. It has also mobilised financing to finance sustainable forest management. The bank also has goals to retrofit existing infrastructure to become greener and more efficient. It will also support sustainability by financing the building of sustainable buildings using local materials.
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