Category Archives: Environment

ESG requirements for Nairobi companies

The Nairobi Securities Exchange (NSE) has launched an environmental, social and governance (ESG) disclosures guidance manual for listed companies on the Nairobi Securities Exchange. 

The guidance was developed with the Global Reporting Institute (GRI) as a proactive initiative by the NSE ahead of more formal rules expected from the Capital Markets Authority (CMA). The NSE is the fourth exchange on the continent after Egypt Nigeria and Botswana to publish guidelines.

NSE board member Isis Nyong’o said 50% of exchanges worldwide have published guidelines, and there are moves to make disclosures mandatory rather than voluntary and companies will soon not be able to attract foreign funding without ESG disclosures. She said that after a grace period, the NSE will also require companies to report annually on ESG.

The guide lists benefits of ESG reporting as more effective capital allocation, access to new sources of financing from sustainability-conscious investors such as DFI’s and P/E funds, more efficiency, better regulatory compliance and better supply chains.

ESG reports are to be prepared following the GRI standards. Companies are advised to recruit ESG champions from across their organization, familiarize their teams with the ESG reporting requirements, provide resources, raise awareness, and develop management plans. They are also to map out and engage with stakeholders – both low-influence such as customers and suppliers, along with the high0influence ones who are regulators and investors.

Companies are to publish their ESG reports and seek external assurance from third-parties to enhance credibility and accuracy and can also integrate their ESG reporting with the Sustainable Development Goals (SDG) they have prioritized – whether they are in banking, investment, manufacturing, agriculture, energy & petroleum, construction, commercial & services, insurance, or telecommunications sectors.

For banks, the Kenya Bankers Association has already produced sustainable finance principles for the industry while the Central Bank has developed guides on climate risk management. Some ESG areas that banks could report on are: 

  • General measures including; governance, strategy, ethics, stakeholder engagement, business models, risk management & controls.
  • Economic measures including; financial return versus economic viability, community investments and taxes. 
  • Social measures including; working conditions, financial products information to customers, consumer protection, inclusivity, political funding, and cyber security.
  • Environmental measures including; materials sourcing, emissions, energy-choice, waste management, electronic waste management, and environmental impact assessments. 

It is expected that adhering to the ESG reporting approach can be used to meet the reporting requirements of the CMA’s corporate governance code for listed companies. Currently, ESG, as measured by sustainability reports, is largely the preserve of larger institutions including Safaricom, Bamburi (parent is Lafarge), East African Breweries (parent is Diageo) and Absa, KCB, Cooperative and Stanbic banks.

The NSE plans to have more training and capacity building sessions about the ESG guide manual which can be downloaded from their website.

Absa Kenya’s Sustainability Push

Absa Bank will plant ten million trees over the next five years with partners and stakeholders as part of a broad plan to promote sustainability and the wellbeing of Kenyans. This is the latest initiative by the bank that has identified three areas of climate action, recycling and sustainable resourcing to champion.

Jeremy Awori, the Absa Kenya Managing Director, said that while companies have historically engaged in corporate social responsibility (CSR) as philanthropic ventures, these initiatives are now going through a transformation to make them more sustainable and impactful by making them a part of the core business.  

Absa has tied its initiatives with the United Nations Sustainable Development Goals on quality education (SDG 4), economic growth (SDG 8) and responsible consumption (SDG 12). The bank has also signed on to the Sustainable Finance initiative, championed by the Kenya Bankers Association, UNEP’s Principles for Responsible Banking initiative, and has also joined the Kenya Green Building Society with a plan to be carbon neutral by 2040.

Its suppliers, 90% of who are local, are undergoing training on sustainable business and the bank plans to have them all sign up with the UN Global Compact in 2021. The bank’s enterprise supply chain development program has provided unsecured loans to small and medium enterprises and a ready to work program has trained 415,000 people.

Caroline Ndungu, the Marketing Director, said old computers and furniture at the bank are being repurposed by Computers for Schools Kenya and Fun Kidz to equip labs at 66 educational institutions with 1,000 computers. Absa is also replacing water dispensers with water purification systems and will recycle billboard branding materials from the Barclays transition into school bags. The bank will also do tree planting exercises as they hand over the labs.

Moses Muthui, the Absa Country Strategy Director, said banks should exist not to profiteer from people but to profit with people. As such, along with other covid-mitigation measures, the bank has now restructured Kshs 60 billion of loans. Absa has also enabled over half their staff to work from home while still keeping all their banking channels open to provide essential financial services to customers.

Kenya had 6% forest cover in 2009 and is estimated to lose 50,000 hectares of forest each year through deforestation. Speaking at the launch, Dr Chris Kiptoo, the Principal Secretary in the Ministry of Environment called on banks to provide innovative financial solutions to promote commercial forestry by the private sector.

The Absa Sustainability Commitment report is available on the bank website.

Konza and Smart Cities in Kenya

This week saw a webinar on August 3 hosted by the Konza Technopolis Development Authority on the planning and growth of smart cities.

It featured governments speakers and urban planners led by Jerome Ochieng, the PS for ICT and Innovation and Dr Chris Kiptoo PS, Ministry of Environment and Forestry, along with Eng. John Tanui, the CEO of Konza, Dr Shipra Suri of UN-Habitat, Juliet Rita of the Architectural Association of Kenya and Karen Basiye, Head of Sustainable Business at Safaricom.

Others were John Kabuye of the Kenya Green Building Society, Enosh Onyango of the Nairobi Metropolitan Service (NMS), Ambassador Njambi Kinyungu from the Ministry of Foreign Affairs, Demola Olajide of UNFPA and Annah Musyimi of Konza – and was moderated by Constant Cap.

Excerpts on the different themes . .

Sustainable Urban Development and Environmental Conservation:

  • Nairobi has had rapid population growth and rapid urbanization – this has led to waste from mushrooming informal settlements mushrooming being discharged into rivers, dysfunctional sewers, industrial waste flowing into rivers with no treatment, overflowing manholes etc. – PS Kiptoo
  • The ecological footprint of cities extends way beyond their administrative boundaries – taking in resources and giving back waste. This has to change and things like urban agriculture are important to foods security and bringing down heat levels – Shipra
  • As part of Safaricom’s plan to be a net-zero company, they committed to plant 5 million. They joined with KFS where in planting trees at South Marmanent where they have empowered communities to do more planting. To date, they have planted half a million and will extend to tree projects to Kieni, Busia, the Mau and Mombasa – Karen
  • Urban settlements must factor in issues of the environment – John Tanui
  • Konza has been designed using a “stitch & band approach” and its developments parallel to Mombasa road have green (forest and wildlife) corridors- Annah
  • NMS identified 153 discharge points and shut them down. Also of 110 illegal dumping areas, 87 have been cleared – Enosh
  • We comingle waste, but when we separate it, we get value – Kabuye

Designing Infrastructure for Sustainable Outcomes:

  • Konza is being developed using smart city principles; each plot has its use (commercial, education, industrial, wildlife conversation), and it is being developed in phases so it grows as its population increases to eventually reach 200,000 people – PS Ochieng.
  • This is the best time now to talk about sustainable cities. The degradation of nature and land-use changes are increasing the risk of pandemics; we are paying the price of unsustainable consumption of natural resources – PS Kiptoo
  • At UN-Habitat we aim to learn from global principles and norms for Kenya to emulate – Njambi
  • Business and residential associations don’t have anyone who looks at sustainability. That has to change – John
  • If a city does not produce better outcomes, we can’t call it smart – Constant Cap
  • UN-Habitat believes people should be the focus of smart cities programs. The goal is not to go high-tech, but “smart” means you are responsive to people, think ahead and take everybody along – Shipra
  • Konza meets the needs of the current generation without compromising the needs of future generations – PS Ochieng
  • We need urban spaces that are responsive to achieve urban dimensions of the SDG’s – Njambi

Smart Solutions for Urban Planning:

  • On Internet of Things (IoT), Safaricom has done smart-metering of aerial water meters with SHOFCO in Kibera (residents buy water with their phones). They are working on IoT for the PSV sector and with UNEP, are monitoring air pollution levels in Nairobi – Karen
  • Konza has been running innovation challenges on COVID and has received 516 submissions from all the 47 counties – Annah
  • Plans are not implemented because many are only prepared as a legal requirement; they are not people-oriented to give solutions. They also require changes in land use and policy, but the country’s system of land ownership makes it hard to have changes – Juliet
  • In the developed world, unless children go back to school, parents can’t go back to work. But Africa has other caregivers in the home – Demola
  • During COVID, people have locked up in spaces that were supposed to be their homes, and this had resulted in social problems – Demola
  • COVID has been the biggest advertisement of the need for well-planned and well-managed urban spaces – Shipra
  • Riparian encroachment by buildings, garages, car washes and eateries come about from not planning well – PS Kiptoo

Urban Planning in Smart Cities Management:

  • Digital streaming and collecting data using IoT will enable Konza to make real-time decisions on transport management, smart environment monitoring, smart metering water & energy – PS Ochieng
  • You can’t manage what you can’t measure. The Kenya Green Building Society has come up with a tool measure performance of buildings, neighbourhoods, and cities in terms of energy, water, waste, human experience and transportation. They have also donated sensors to Mbagathi and KEMRI to measure Co2 emissions and carbon monoxide – Kabuye
  • Planning is still very relevant. We have seen what COVID has done to cities as it is an urban-centric disease – Njambi

Conclusion: The mistakes of Nairobi’s sprawl are not unique, as Sub-Saharan African cities are the fastest-growing urban areas. It is envisaged that the smart planning and design at Konza and the use of IoT to manage the community and environment will make it a sustainable place for a population of 200,000 people. It will accommodate 30,000 residents, 17,000 who are anticipated to work in the complex.

The webinar ended with a call by PS Kiptoo have Konza set the pace for all other cities in the country to “go smart” while PS Ochieng asked more Kenyans to visit Konza to see the ongoing developments and to add to the 10,000 seedlings that will be planted every year there for the Technopolis and community.

Kenyan Companies win World Bank awards

Thirty-one environmental entrepreneurs from around the world were awarded with nearly $4 million in grants from the Bank’s 2005 Development Marketplace Global Competition. More than 2,600 applicants from 136 countries submitted proposals in the annual worldwide competition, and 78 finalists came to Washington for the final judging. To view the complete list of the winners, please go to www.developmentmarketplace.org

1. Hawkers Market Girls Centre $84,703 Kenya Environmental education and awareness:  To use education as a tool for conservation and improved livelihood for girls living in difficult and dangerous conditions. Kenya’s Hawkers Market is overflowing with large amounts of waste which has given rise to scavenging by young girls from economically disadvantaged families, who find materials that can be recycled or processed for small amounts of money.

2. Credit for Safe Collection of Used Oil $150,000 Kenya Protecting environmental health: To clean the Mukuru-Ngong River in Nairobi by encouraging vehicle mechanics to collect used engine oil instead of dumping it into the river. This project converts used oil into cash and/or loans through a credit points system, turning a pollutant into an income supplement and encouraging mechanics to collect used oil instead of discarding it.

3. Community Carbon Collectors: Briquetting in Kenya $132,773 Kenya Renewable energy and energy efficiency : To simultaneously reduce waste and energy costs in Nairobi’s slums by buying discarded charcoal dust and transforming it into low-cost, clean-burning briquettes. Fifteen percent of the charcoal, however, is discarded at urban trading sites as dust. Chardust, a company that produces fuel briquettes from charcoal dust, has teamed with an NGO that has an existing garbage collection program to encourage Kibera slum dwellers to act as “carbon collectors,” salvaging charcoal dust to sell to Chardust for processing into briquettes. Up to 300 low-income slum dwellers would earn US $900 per month (equivalent to over a year’s income) as charcoal dust suppliers, and at least 1,000 charcoal-using households would benefit from lower fuel costs.

More Tsunami relief

The Paris Club (donor nations) are offering a debt freeze and letting tsunami-hit countries suspend repayments on billions of dollars of debt. The freeze will be immediate and without conditions for those countries that request it. The five countries affected most by the tsunami pay $45 billion annually in debt repayment.

Meanwhile, Indonesia said that foreign troops must leave in 3 months, in response to the impression that it was surrendering sovereignty to outsiders. And cash-starved Zimbabwe plans to donate $3.6 million to tsunami relief efforts in Asia.