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Greening financial reporting: Kenya Bankers Association's leap towards IFRS S1 and S2 implementation

April 23rd, 2025

In recent years, the adoption of sustainable finance practices has emerged as a key driver of promoting a resilient and transparent financial services sector.

At the forefront of this shift in Kenya is the Kenya Bankers Association (KBA), spearheading initiatives that embed sustainable finance practices within the banking industry. Supported by FSD Kenya and Worldwide Fund for Nature (WWF) Kenya, KBA has developed the IFRS S1 and S2 reporting guide template to facilitate industry-wide adoption of sustainability reporting standards. This latest collaboration marks a critical step in aligning Kenya’s financial sector with global sustainability standards.

The International Sustainability Standards Board (ISSB), formed in 2021 under the IFRS Foundation, aims to establish a global baseline for sustainability-related financial disclosures. In June 2023, the ISSB launched two pivotal standards:

These standards empower businesses worldwide to transparently disclose their sustainability impacts, enhancing decision-making and investor confidence.

KBA’s role in advancing sustainability disclosures is well established. In 2023, the association developed a widely adopted Task Force on Climate-related Financial Disclosures (TCFD) template to support banks to report on climate related risks and opportunities as mandated by the Central Bank of Kenya (CBK). Building on this foundation, KBA with technical support from Deloitte, in partnership and with funding support from FSD Kenya and WWF-Kenya, has now developed the IFRS S1 and S2 reporting guide template, a critical tool for harmonising sustainability reporting.

Since August 2024 significant strides have been achieved while developing the reporting template.

Deloitte created a draft sustainability reporting template using the IFRS S1 and S2 standards, which was later improved by KBA’s Sustainable Finance Initiative (SFI) team during a workshop in September 2024. The workshop included representatives from 13 banks and Institute of Certified Public Accountants of Kenya (ICPAK), who gave expert feedback. As a result, participants better understood the standards, ICPAK agreed to support adoption, and the template was updated to be more useful for the industry.

Key lessons learned from the template development process include:

  • Banks need more standardised tools to compare their sustainability performance. Right now, it is hard to measure progress across the industry because each bank reports differently. To fix this, the IFRS S1 and S2 template should align with other popular reporting frameworks like TCFD and GRI and include both financial and non-financial information for a complete picture.
  • Since many banks are still new to sustainability reporting, the template should also include learning materials to help users understand what’s required. A question-based format will make the template easier to use, while step-by-step guidance and checklists will help ensure the data collected is accurate and reliable.
  • One of the hardest areas to report on is Scope 3 emissions, especially those related to the projects’ banks’ finance. The template should offer clear instructions and tools to help banks collect and report this information, so they can better understand and manage their indirect environmental impact.

After the official launch of the IFRS S1 and S2 reporting template on 23rd April 2025, KBA will begin training its member banks with help from ICPAK and other partners. ICPAK will provide technical assistance, develop tools for different sectors, and create a system to track how well the standards are being used. The aim is to help all banks understand and use sustainability reporting, making their work more open and accountable. Creating this reporting guide is a big step forward in making Kenya’s financial sector greener. As more banks begin using it, the template will support stronger, more sustainable financial markets and help bring positive change to the wider economy.

Click here for the IFRS S1 & IFRS S2 Disclosures Reporting Template for Banks by the Kenya Bankers Association

Opening Remarks by Tamara Cook, CEO, FSD Kenya at the Sustainability Reporting Workshop for Agriculture and Banking Sectors

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