The Central Bank of Kenya has released the Kenya Green Finance Taxonomy and a Climate Risk Disclosure Framework for implementation across the country's banking sector. The twin frameworks are designed to guide lenders in classifying green investments consistently and in reporting the climate-related risks carried within their balance sheets.
The Kenya Green Finance Taxonomy provides a standardised classification system that defines which economic activities qualify as environmentally sustainable under Kenyan conditions. By establishing clear eligibility criteria, the taxonomy aims to reduce the risk of greenwashing and to channel capital towards projects with measurable environmental benefits across sectors including renewable energy, sustainable agriculture, green construction, and water management.
IMPLEMENTATION TIMELINE
The CBK is applying the disclosure framework on a voluntary basis for 18 months from issuance, after which compliance becomes mandatory.