Kenya Commercial Bank (KCB) Group became the first financial institution in Africa to have its reports verified by external auditors. This move marks a significant step towards greater transparency and better environmental, social, and governance (ESG) reporting.
On Tuesday, KCB Group launched its 2023 Environmental, Social & Governance (ESG) and Sustainability Report, showcasing the Group's advancements in meeting its sustainability goals.
KCB Group Chairman, Dr Joseph Kinyua stated, “Our unwavering commitment to sustainable growth is at the core of our business. We have actively identified areas for improvement and aligned with our customers and stakeholders to achieve shared goals. Through digital innovation, we drive inclusion for the unbanked and enhance the customer experience. By leveraging technology, we empower individuals to access financial services and opportunities, demonstrating our long-term vision and dedication to our stakeholders.”
KCB Group CEO Paul Russo added, “We are increasing our focus on sustainability and environmental responsibility. We are proud to announce the release of the first assured report, setting a new standard in ESG reporting in Africa.
“This report confirms that our key performance indicators and metrics accurately reflect the bank's performance, enhancing transparency and accountability. This is borne from the belief that by aligning business practices with sustainability principles, financial institutions can drive long-term value creation, enhance their reputation, and mitigate risks associated with environmental and social challenges.”
Sustainability and Environmental Impact
KCB Group's steadfast commitment to sustainability is reflected in its strategic efforts to minimise ecological impact.
In 2023, the bank evaluated loans amounting to Kshs615 billion for environmental and social risks, reinforcing its dedication to sustainable finance.
This represents half of the Group’s total loan portfolio, showcasing its proactive approach to backing projects that yield positive environmental outcomes.
The bank also granted green loans amounting to KSh21.4 billion, which account for 15.5% of its total loan portfolio.
These funds were directed towards projects in e-mobility, climate change adaptation and mitigation, energy efficiency, and renewable energy.
KCB’s ambitious tree-planting programme further demonstrates its green initiatives. In 2023, KCB Group planted over 300,000 trees in Kenya and aims to reach a target of 1.2 million trees by the end of 2024.
The bank also achieved an 11.14% reduction in carbon footprint intensity per staff member and boosted the installation of LED lighting by 50% across its branch network.
Social and Economic Impact
In 2023, KCB Group's socio-economic initiatives highlighted the crucial role of ESG factors in fostering inclusive growth.
2jiajiri Programme
The KCB Foundation's 2jiajiri programme has made notable progress in empowering youth and creating jobs. It has supported 2,877 young entrepreneurs and led to the creation of 13,352 direct jobs.
2jiajiri acts as a powerful catalyst for sustainable development by equipping youth with technical skills, business development support, and financing opportunities. This enables them to either find employment or start their own businesses.
Since its launch in 2016, the programme has trained over 22,000 young people, incubated 6,395 businesses, and disbursed loans totalling Kshs260 million.
In partnership with organisations such as the German Development Cooperation (GIZ), the programme has specifically targeted 4,000 young people in the informal agribusiness and construction sectors. This collaboration has significantly contributed to societal progress and the development of a sustainable and inclusive future.
The Foundation places a strong emphasis on supporting children with disabilities, teen mothers, and young boys and girls at risk of missing out on education due to harmful cultural practices. To promote diversity and inclusion, these groups have been awarded a total of 227 2jiajiri scholarships.
This success has led to the expansion of the 2jiajiri programme into KCB Group’s subsidiaries, with plans to launch the initiative in Burundi, South Sudan, and the Democratic Republic of the Congo.
“By expanding and accelerating our youth empowerment and job creation initiative regionally, we aim to make a positive impact in the lives of more young people and contribute to the economic growth of these countries,” the report says.
The KCB Foundation seeks to enhance employment opportunities and financial inclusion for 195,000 youth and women over the next five years by targeting sectors such as construction, manufacturing, and sustainable agriculture. This effort aligns with the United Nations (UN) Sustainable Development Goal 8 which envisions Decent Work and Economic Growth while Promoting Social Equity and Inclusion.
The KCB Foundation is dedicated to fostering a more diverse and inclusive future for the communities it supports.
Testimonials
Laban Koech's life changed dramatically when he came across an opportunity through the KCB Foundation's 2Jiajiri programme, in partnership with the German International Agency (GIZ). Despite financial difficulties and challenges in finding accommodation, he enrolled in a Masonry and Brickwork course at Comboni Polytechnic in Gilgil and successfully completed his studies in April 2022.
The skills Laban gained through the 2Jiajiri programme provided a solid foundation for his livelihood. With the toolkit he received upon graduation, he started his own business, BizLaJaSh Construction, which now employs five people and ensures a stable income for his family.
"The E4D project was very timely. The skills I acquired from it have been my source of livelihood ever since. I currently have four school-going children under my care,” Laban says.
Despite facing challenges, Laban remains hopeful about the future of BizLaJaSh Construction. He believes that with additional support, such as incentives or low-interest loans, his business could grow further, improving both his family's prospects and contributing to the development of the wider community.
Like Laban, Zedekiah Wale's dream of becoming an engineer was almost shattered by financial difficulties and life's uncertainties.
Zedekiah, who was born and raised in Mtepeni, Mtwapa, faced a challenging upbringing with his single mother. After completing high school in 2018, he was unable to pursue further education due to financial constraints.
Despite getting a job as a fuel attendant in 2019, Zedekiah was out of work by early 2021. Determined to make a living, he tried farming, but quickly realised it wasn’t a sustainable source of income.
In May 2021, a friend told Zedekiah about the KCB Foundation's E4D programme, which offered scholarships for welding and plumbing courses. He applied and was accepted into the welding course at Mabati Technical Training Institute in Mariakani. Despite financial challenges, including the costs of moving and daily expenses, KCB Bank provided him with a Kshs10,000 stipend.
After finishing his course in April 2022, Zedekiah started his own business, Siloam Classic Welding and Fabrication. He opened his first workshop in Likoni and launched a second one in Mtwapa in early 2023.
“All I can say is that I am happy with my leap in life from where I didn’t have a source of income, and now I have a place where I can say I get my daily bread,” he said, adding that he is grateful for the transformation the E4D programme brought to his life.
Despite struggling with cash flow issues, Zedekiah remains hopeful about the future. He plans to expand his business nationwide and add vehicle bodywork to his services.
Empowering Women and Promoting Inclusivity
In 2022, KCB Bank Kenya committed Kshs250 billion over five years to support women entrepreneurs. This investment highlights the bank’s dedication to driving economic growth and promoting gender equality in business.
Through its Female-Led and Made Enterprise (FLME) platform, the bank pledged an annual investment of Kshs50 billion to foster entrepreneurship, create jobs, and focus on specific market segments, especially businesses owned or managed by women.
This initiative comprises offering financial resources, support services, and customised solutions to promote inclusive economic growth and help women achieve their full potential.
So far, the bank has issued loans totalling Kshs115 billion, benefiting 683,887 FLME customers. KCB has also invested in training programmes, with over 3,000 women receiving skills development to improve their business management. This is part of KCB’s wider strategy to encourage sustainable and inclusive growth across its areas of operation.
MSMEs
The bank has also provided Kshs100 billion in loans to Micro, Small, and Medium Enterprises (MSMEs), a vital sector for economic development in the region.
KCB’s commitment to financial inclusion is evident, with Kshs46 billion in KCB M-Pesa loans disbursed, reaching a broad customer base.
Education Access and Support Initiatives
The KCB Foundation's education programme is a key part of its social impact strategy, aiming to offer educational opportunities to 22,000 vulnerable children and young people by 2027.
This initiative mainly targets school graduates from economically disadvantaged backgrounds, with a special focus on female students and people with disabilities.
By directly supporting SDG 4 (Quality Education) and SDG 10 (Reduced Inequalities), the programme aims to tackle social disparities and encourage inclusive education throughout Kenya.
The Foundation is also aiming to raise its funding to Kshs2.5 billion annually, boosting its implementation capacity by 30% to ensure it can effectively deliver on its sustainability goals.
In 2023, the Foundation awarded 1,326 scholarships to talented students in need, including 640 female and 686 male students. The programme has grown to offer both high school and university scholarships, now providing 1,000 scholarships annually, up from 240 previously.
The Foundation's dedication to education is further demonstrated by its 99% completion rate from Form 1 to Form 4 and an 84% transition rate for students who finished high school in 2022. These accomplishments underscore the Foundation’s commitment to supporting students throughout their educational journey, equipping them with the skills and knowledge needed to thrive.
Beyond scholarships, the Foundation’s investment in educational technology has been transformative. By distributing laptops and desktops to underprivileged students and providing technology tools for community training centres, the Foundation is actively working to bridge the digital divide.
Additionally, the Foundation’s mentorship programmes in schools reflect its holistic approach to nurturing talent and promoting educational excellence, forming a well-rounded strategy for community development.
Through KCB Bank Kenya, over Kshs32 million has been invested in enhancing learning environments across 25 schools. This includes providing water tanks, building sanitation facilities, and donating desks and chairs. This comprehensive approach ensures that every student is included and supports the Foundation's broader goal of advancing sustainable development in the region.
Corporate Governance and Standards
KCB Group operates with a focus on good governance, which means being transparent, accountable, and ethical.
The bank follows rules and standards to maintain integrity and protect the interests of everyone involved.
Its governance approach is aimed at ensuring long-term success while staying aligned with its goals.
Awards and Recognition
KCB Group’s dedication to sustainability and social responsibility saw it win several awards in 2023.
At the Global Business and Finance Magazine awards, NBK was named Best CSR Bank Kenya 2023.
KCB Group was honoured as the Best Sustainable Bank Kenya 2023 at the Finance Derivative Banking Awards.
At the 2023 Think Business Banking Awards, KCB Bank Kenya won the Best Bank in Sustainable Corporate Social Responsibility award and was named 1st Runners Up for Best Bank in Customer Satisfaction.
At the same event, NBK was named 1st Runners Up for Most Customer-Centric Bank and Best Bank in ESG, and received 2nd Runners Up for Best Bank in Agriculture and Livestock Financing.
Additionally, KCB Kenya's product relaunch was celebrated as Product Re-Launch of the Year at the MSK Gala Awards, and KCB Group was honoured as the Best Brand for Inclusive Banking at the Marketing World Awards.
BPR earned 1st Runners Up for Financial Inclusion at the Inclusion Financial Institution Awards, and NBK was named Best SME Bank Kenya 2023 at the World Business Outlook Awards.
Future Outlook
KCB Group is committed to advancing sustainable finance, aiming to allocate 25% of its total loan portfolio to sustainable projects by 2025.
The bank’s continuous efforts to cut its carbon footprint, support inclusive growth, and maintain robust governance standards establish it as a leader in sustainable banking and set a high standard for the financial industry.