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Companies on the NSE must adopt ESG practices to boost sustainability and trust. Key areas include ethical governance, social responsibility, and environmental action. Success stories from KCB, Safaricom, and EABL show positive impact. AI tools and ESG ratings now support transparency and performance.
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ESG considerations must be incorporated by companies to improve stakeholder trust and sustainability. The key factors include:
Governance Factors
Social Impact Factors
Environmental Factors
The NSE released the ESG Disclosures Guidance Manual in an effort to improve ESG integration. Global issues have led to an increase in investor demand for ESG information. Of the listed companies, just 25% had adopted ESG reporting in 2023. KCB Bank Group, EABL Plc, Safaricom, Bamburi Cement and Standard Chartered are notable examples of complying companies.
This report will include ratings, success stories and suggestions for Nairobi Stock Exchange companies.
ESG Ratings: To make use of the ESG GPS platform, which provides thorough ESG ratings and data for listed businesses, the NSE teamed up with Risk Insights. Better investment decisions are made possible by this AI-powered solution, which also improves sustainability performance assessments.
Growing Adoption: As sustainability becomes a more important factor for investors, there has been a discernible rise in the amount of ESG reporting among NSE-listed firms.
Examples of Success stories
a) Equity Group Holdings was named Africa's best bank for corporate responsibility at 2024 Euromoney Awards for Excellence.
b) KPLC has been fostering environmental stewardship and social responsibility, ensuring compliance with governance standards.
c) KCB screened loans worth KES 615 billion for environmental and social risks in 2023, demonstrating its commitment to sustainable finance.
d) EABL Plc, as of 2024, invested Kshs 8.5 million in forest fencing, boosting visitor numbers and revenue. It also invested Kshs 7.5 million in a borehole and solar-powered water system, providing clean water for 1,400 students and staff.
e) Bamburi Cement known for environmental stewardship, investing in ecosystem restoration projects achieved 30% lower carbon dioxide emissions, securing an eco-friendly cement range certification for its four brands.
f) Safaricom secured the largest ESG-linked debt facility in East Africa, demonstrating its commitment to community engagement and environmental sustainability.
NSE's ESG Index and AI Tools
– NSE planned to launch an ESG index evaluating companies' sustainability policies.
– The index includes carbon emissions, green revenues and governance quality metrics.
– AI tools to assess and rank sustainability reports from publicly traded companies in partnership with International Finance Corporation.
1) Set challenging ESG objectives.
2) Adapt business operations and strategy to incorporate ESG considerations.
3) Talk about ESG concerns with stakeholders.
4) ESG performance should be measured and openly reported.
5) Look for external confirmation of ESG disclosures.
NSE-ESG-Disclosures-Guidance-Manual.pdf
kcb-sustainability-report-2023.pdf
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