The Kenya Bankers Association (KBA) partnered with FSD Kenya and the International Union for Conservation of Nature (IUCN) to undertake a study on the environmental risk exposure in the Kenyan banking sector.
The study report has identified several gaps and challenges in the environmental management sector, which have a huge implication on the risks financial institutions are exposed to. These range from inconsistencies in the existing environmental regulations (e.g., riparian land zoning rules); to institutional overlap with conflicting roles of different government agencies (e.g., the role of the National Environmental Management Authority (NEMA) viz-a-viz that of other institutions such as county governments is often not clear); and to limited and/or effective public participation in the undertaking of environmental assessments, as required by law.
Others include institutional challenges such as deficient environmental and social impact assessments, unethical behaviour among clients/borrowers, inadequately constituted environmental impact assessment (EIA) consultancy teams and an unfavourable business climate for the manufacturing sector, making it unsustainable to comply with the requirements of the Environmental Management and Coordination Act (EMCA), 1999 and its subsidiary legislations.
For more details, click here to read the full Environmental Risk Exposure in the Kenyan Banking Sector Report.
You can also read a summary of the report’s findings in this presentation.