Wananchi Opinion: Let's embrace a greener and more resilient future

Kenya, like many other African countries, is confronted with the need of a viable approach on how to keep its economy growing and at the same time adjusting to climate change.

The cross road is clear for businesses cannot solely focus on profit but rather adopt a greener and more resilient future as well.

The blue print to this transition is conspicuous in renewable energy financing, the spread of ESG practices concept and the pronounced reality of carbon risk.

Notably, Kenya renewable energy implementation is commendable. More than 80 percent of its electricity is drawn from hydro power, solar, geothermal and wind.

This has enabled the country to be one of the top green energy producers in the world according to according to International Energy Agency (IEA) 2024 report.

However, Maintaining the status quo and scaling up requires financing. The Acorn Green Bond of 2019 is a proximal example, raising billions for sustainable student housing.

Development partners are also taking centre stage, from the Swedish-funded REACT programme injecting Sh500 million into green MSMEs, to micro-loan schemes in northern Kenya reaching over 13,000 small businesses.

Commercial banks are not lagging behind as per an article by Kenya Bankers Association that the Banking sector have exceeded their lending targets to SMEs, showing there is zeal for green financing.

Consequently, ESG practices are no longer a corporate catchword but rather becoming an integral tool of trade.

Safaricom, Kakuzi Plc, and other big firms now report on emissions, governance and employee welfare, embedding ESG in their core strategies.

Nonetheless, for most small businesses, ESG is still an abstract idea. Many see it as a costly idea, with little practical support to implement it.

Without stronger incentives, training and regulatory clarity, SMEs will continue to lag behind and with them, Kenya’s broader sustainability goals.

The most pressing risk is carbon. Around the world, markets are beginning to price emissions, and buyers are holding suppliers accountable.

Kenyan exporters are already at risk, studies suggest they could lose nearly $4 billion if they fail to meet their clients’ net-zero targets.

For horticulture growers and manufacturers seeking European markets, carbon footprints are now a major aspect. They determine competitiveness. Ignoring carbon risk is not an option.

Companies that embrace energy efficiency, low-carbon processes or carbon credits can gain a competitive edge, securing both reputation and revenue.

Government and financial institutions are aligning. Strategies are underway for a $500 million sustainability-linked bond, linking Kenya’s debt to measurable green and social outcomes.

Green bonds are being considered for Nairobi’s water infrastructure and Konza City’s expansion per the disclosures of National Treasury and FSD Kenya’s report. Experts however are of the view that challenges are still eminent.

The outlay cost of green technology remains high, reporting standards are not strengthened, and policies often shift unpredictably. For many SMEs, simply knowing how to measure emissions is a hurdle.

The footpath to a greener future should be intentional and inclusive.

Opening up and making green finance safer for small and medium-sized businesses through smart funding options and risk guarantees that can enhance confidence and support SMEs need to grow and innovate sustainably.

In addition, clear and consistent policies must be put in place for effective operations.

Training and technical support can be embraced to enhance ESG practices and carbon management.

The transition process should also be fair, ensuring rural and marginalised populace benefit as per the Danish Industry Study Report 2024 on ESG.

For Kenyan firms, the question is no longer if to go green, but how fast they can move without losing their competitive edge.

Brian Dibogo is a green climate enthusiast.