Case study: How KCB Group works with its clients and customers to encourage sustainable practices

Stakeholder identification and consultation

Please describe which stakeholders (or groups/ types of stakeholders) you have identified, consulted, engaged, collaborated or partnered with for the purpose of implementing the Principles and improving your bank’s impacts. This should include a high-level overview of how your bank has identified relevant stakeholders, what issues were addressed/results achieved and how they fed into the action planning process.

KCB Bank recognizes the pivotal role of stakeholder engagement in ensuring business success. This entails actively connecting and maintaining relationships with individuals, groups, and organizations linked to the business. Consistent engagement throughout the year offers numerous benefits, including building trust, fostering open communication, and staying attuned to their needs and concerns. It also enables stakeholders to comprehend the company’s approach to executing its business strategy and take action on identified issues authorized by the Board. The bank collaborates with local and international partners to increase its sustainability impact.

Stakeholders partnered with to improve the implementation of the principles

African Business Leaders Coalition (ABLC)

In October 2022, KCB Group Plc joined the African Business Leaders Coalition (ABLC) to strengthen efforts in combating climate change.

Issues Addressed: By joining the coalition, KCB Group Plc demonstrates its commitment to addressing climate change and taking collective action with other African business leaders.

Results Achieved: KCB Group collaborates with other African business leaders in the coalition to collectively address climate change challenges.

Action Planning Contribution: Actively engaging in collaborative projects and initiatives enhances KCB Group’s action planning process by leveraging the expertise and resources available within the coalition.

Net Zero Banking Alliance (NZBA)

KCB Bank is a founding member of NZBA, established in April 2021, committing to becoming net zero by 2050, aligning with the goals of the Paris Agreement.

Issues Addressed: Climate Change Mitigation.

Results Achieved: Proactive steps taken by KCB Bank to reduce greenhouse gas emissions and limit its contribution to climate change, aligning with the Paris Agreement’s goals.

Action Planning Contribution: Active participation in the alliance’s collaborative efforts to develop strategies, share best practices, and establish frameworks for achieving net-zero emissions. The engagement with other banks and stakeholders helps shape the bank’s climate change action plans and targets.

United Nations Environment Programme Finance Initiative (UNEP FI)

KCB Group is a founding bank and active partner in the UN’s Principles for Responsible Banking, sharing its experiences and best practices globally to implement and align with the Sustainable Development Goals (SDGs), promote sustainable lending, commit to a net zero goal by 2050, and support the Paris Agreement’s objectives.

Issues Addressed: Sustainable Finance, Green Lending, Climate Change Mitigation.

Results Achieved: Incorporation of sustainable practices into operations, including greening the lending portfolio and aligning with the SDGs. The commitment to a net-zero goal by 2050 shows the bank’s dedication to climate change mitigation.

Action Planning Contribution: Active participation in UNEP FI offers to KCB Bank access to global best practices, knowledge sharing, and collaboration opportunities, shaping strategies for responsible banking, sustainable finance, and climate action.

United Nations Global Compact (UNGC)

KCB Bank has been committed to the UNGC’s principles since 2014, completing a four-year compliance period and communicating progress in implementing the principles since 2019.

Issues Addressed: Corporate Sustainability, Responsible Business Practices.

Results Achieved: By communicating its progress in implementing the UNGC principles, the bank demonstrates its efforts towards achieving the UNGC’s goals, including human rights, labour rights, environmental protection, and anti-corruption measures.

Action Planning Contribution: The UNGC principles serve as a framework for assessing KCB Bank’s performance and identifying areas for improvement, with progress communication helping to evaluate the effectiveness of action plans and initiatives.

Green Climate Fund (GCF)

KCB Bank Kenya obtained accreditation from GCF in 2020, to accelerate adaptation and mitigation efforts in Kenya to combat climate change.

Issues Addressed: Climate Change Adaptation and Mitigation.

Results Achieved: Access to funding and resources to support climate change adaptation and mitigation efforts in Kenya.

Action Planning Contribution: The partnership with GCF facilitates the identification and implementation of projects aligning with the bank’s sustainability goals and contributing to climate resilience and mitigation.

International Financial Corporation (IFC)

KCB Group partnered with KCB Bank Kenya to advance sustainable finance. The IFC approved a $150 million funding for KCB Bank as a lead syndicator, to support the bank’s sustainable climate finance portfolio and facilitate lending to micro, small, and medium-sized enterprises (MSMEs), including women-owned businesses.

Issues Addressed: Sustainable Finance, MSME Support, Climate Change Mitigation.

Results Achieved: The approval of funding enables KCB Bank to expand sustainable climate finance portfolio and enhance MSMEs, including women-owned businesses.

Action Planning Contribution: Funding allocation to projects and programmes aligning with the bank’s sustainability objectives and contributing to its action plans.

How did KCB Group work with its clients and customers to encourage sustainable practices and enable sustainable economic activities?

In its 2022 Principles for Responsible Banking Reporting and Self-Assessment KCB Group reports that it works with its clients and customers to encourage sustainable practices and enable sustainable economic activities as follows:

KCB Group is dedicated to involving its subsidiaries in the sustainability journey, collaborating to devise innovative solutions for clients’ sustainability objectives. As a market leader, the Group prioritizes attaining net-zero emissions by 2050 and assisting customers in transitioning to a low-carbon economy. Through the reduction of greenhouse gas emissions, KCB seeks to unleash the business potential of innovative solutions, while also promoting sound risk management practices and providing leadership in sustainability. The Group conducted qualitative on-site visits to clients to assess their environmental and social (E&S) risk profiles. This allowed the Bank to raise awareness of E&S risks with clients and share opportunities for transitioning and implementing green projects within their businesses. KCB Group’s sustainability initiatives are evident in its key policies, such as the revision of the KCB Kenya Credit Policy, KCB Group Social Environmental Management System Policy, KCB Group Sustainability Policy, and KCB Group and Kenya Risk Appetite Policies, aimed at supporting clients in their transition to net-zero. As a member of the UN Global Compact, KCB adheres to its 10 Principles and actively engages suppliers through increased procurement spending, targeting special interest groups and local suppliers. The bank has implemented a supply chain and shared services sustainability programme which included the adoption of a supply chain code of conduct, signed on by 53% of suppliers by the end of 2022.

UN Principles for Responsible Banking: Accelerating a positive global transition for people and the planet

With over 300 signatory banks representing almost half of the global banking industry, the Principles for Responsible Banking are the world’s foremost sustainable banking framework. Through these Principles, the banking community takes action to align core strategies, decision-making, lending and investment with the UN Sustainable Development Goals and international agreements such as the Paris Climate Agreement.

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References:

This case study is based on published information by KCB Group, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:

https://kcbgroup.com/wp-content/uploads/2023/10/KCB-PRB-REPORT-2022.pdfhttps://kcb

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