According to a new report by Standard Chartered Plc, the value of sustainable investment holdings in retail in Kenya is expected to soar to 2.3 trillion shillings ($19 billion) by 2030 thanks to increased flows of capital in the fight against food insecurity, climate change and green energy.
Global lender’s 2022 Sustainable Banking Report highlights growing corporate embrace of environmental, social and governance (ESG) practices as investors demand companies take action to address climate concerns and sustainable practices more responsible business.
He notes that in Kenya, 30% of investors have more than 15% sustainable investment assets as part of their investment portfolio, a figure that is expected to rise to 50% in the next two to three years.
Sustainable investments allow an investor to achieve financial returns while promoting long-term environmental or social value through their investment.
Green finance, such as green bonds, should pave the way for sustainable investment growth in the country, as will the continued transition to green energy such as geothermal and wind power.
“Green bonds, growing wealth and government efforts to increase transparency could catalyze the growth of sustainable investments,” the lender said in the report.
“Beyond the energy transition, Kenya’s $19 billion retail capital potential could also be devoted to tackling market-specific environmental, social and governance (ESG) issues, such as food scarcity. , poverty and human rights”.
The Nairobi Securities Exchange (NSE) recently became the fourth stock exchange in Africa to publish an ESG handbook in 2021 guiding listed companies on measuring and reporting ESG issues and granted companies a one month grace period. year to start making disclosures.
Regulators are trying to prevent companies in their jurisdiction from being excluded from financing options that could destabilize operations if they cannot access local and international funds.
The report highlights that Kenya has strong growth potential in sustainable investing, largely due to its large population and growing domestic wealth.
Climate change and carbon emissions were a top ESG priority, contributing 36%, poverty and income equality 32% and human rights 24%, according to respondents polled by Stanchart. for the report.
The report also revealed the lack of information (48%), the difficulty of accessing investment opportunities without a professional financial adviser (48%) and the difficulty of comparing sustainable investments within a class of assets (47%) as some of the main barriers to increasing their sustainability. investments.