Patrick Njoroge: Greening Kenya's banking sector

Statement by Dr Patrick Njoroge, Governor of the Central Bank of Kenya, 4 November 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
13 December 2021

We have a problem. The recently released State of the Climate in Africa 2020 report, indicates that in 2020, the climate indicators in Africa, were characterized by extreme weather events such as floods and droughts, increasing temperatures and accelerated rise in sea-levels. The associated impact was devastating. The report also notes that by 2030, up to 118 million extremely poor people will be exposed to drought, floods and extreme heat in Africa, if response measures are inadequate. Additionally, climate change could further lower gross domestic product (GDP) in Sub-Saharan Africa by up to 3 percent by 2050. And Africa is not alone.

It is against this dire backdrop in Africa and the world that the 26th UN Climate Change Conference of the Parties (COP26) is convening in Glasgow, Scotland. It brings together governments, businesses, civil society and citizens with the expectation of commitments to ambitious actions that are needed to counter climate change. Further delays in these commitments or if they are unambitious would spell doom to our destiny.

In the build up to COP26, Kenya and other countries have been scaling up their climate actions at the sectoral and national levels. It is in this context that the Central Bank of Kenya (CBK) issued Guidance on Climate-Related Risk Management (Guidance) to the banking sector, on October 15, 2021. The Guidance is aimed at enabling banks to integrate climate-related risks into their governance, strategy, risk management and disclosure frameworks.