KEPSA, led by the Deputy CEO Mr Victor Ogalo, joined other key partners in the launch of the IFC Integrated Environmental, Social and Governance (IESG) program on 23^rd March 2023 at a Nairobi hotel. The IESG Program is sponsored by the Japan International Cooperation Agency (JICA) in Kenya with the objective to increase the uptake of ESG good practices in the private sector.

The program will deliver ESG support to banks, corporates, pension funds and fund managers in partnership with KEPSA, National Environment Management Authority (NEMA), Kenya Association of Manufacturers (KAM) and Kenya Bankers Association (KBA).

The IFC Country Manager for Kenya, Ms Amena Arif, in her remarks, acknowledged the fact that many companies in Kenya have adopted ESG practices. She, however, noted that more needed to be done to ensure that many more companies are adopting by embedding ESG practices in their culture, missions and the way they look at business.

The launch was graced by H.E Okaniwa Ken, Ambassador of Japan to Kenya, who in his remarks reiterated Japan’s keen focus on the private sector development across Africa, in recent years, adding that this was informed by the recognition of the important role the private sector plays in various sectors of the economy, thereby creating and promoting economic growth. He also pointed out that most investors and funders, including JICA, were becoming more mindful of investing in activities that are aligned with ESG standards.

Mr John Elungata, Senior Director of Administration at the Ministry of Environment, Climate Change & Forestry, said that in recognition of the climate change effects, the Government of Kenya has put in place measures to mitigate and adapt to these consequences. He said that these measures include the restoration of forests, reducing the carbon footprint through several initiatives such as the National Clean Energy Fund and promoting cleaner and sustainable energy sources such as electric mobility.

“The government's working with various organizations including the US Agency for International Development to reduce greenhouse gas emissions and help Kenyans adapt to the impacts of climate change. We are also prioritizing economic growth and trade with a vision to increase the supply of access to reliable affordable and sustainable electricity.” Said Mr Elungata.

“Companies are now expected to identify developmental and social risks and impacts and design systems to help mitigate and manage them as part of sustainable business practices. Stakeholders’ expectations of companies including those of investors are also changing across the globe. Companies are expected to manage operations and their impacts, taking materials and risks into account. Indeed, corporate governance involves managing and modelling social risks and achieving long-term financial success.” Remarked Mr Mamo B. Mamo, Director General, NEMA.

In a panel discussion on the business case for the value of ESG practices in the private sector in Kenya, the KEPSA Deputy CEO highlighted the need to simplify ESG practices to be understood and practised by every individual in day-to-day activities and not only as a reserve for corporates. He also noted that more needs to be done to ensure more corporates adopt ESG practices including creating awareness and promoting such initiatives by providing incentives to firms that promote ESG.

Mr Ogalo was joined by Dr Habil Olaka, KBA CEO and Mr Anthony Mwangi, KAM CEO in a session that was moderated by Ms Tania Mansour of IFC. Some of the outcomes of the discussions included:

• The need for the ESG concept to be spearheaded right from the board level where the strategic direction is developed
• Most of the challenges we are facing as a nation are related to ESG including drought, food insecurity and corruption
• There’s a need to integrate and emphasize the importance of sustainability in the education system.
• ESG is no longer a nice-to-do but an integral part of an organisation
• The need to have a central database of information on matters ESG