NAIROBI, Kenya, Sep 29 – Retail traders in the country have a great potential to crack financing for Environmental, Social and Governance (ESG) objectives and priorities if some hindrances are resolved, a report by Standard Chartered indicates.
The Sustainable Banking Report 2022 themed ‘Mobilizing retail investor capital through sustainable investing’ found that investors in Kenya have the potential of channeling Sh2trillion to finance the climate transition in addition to bridging the funding gaps in ESG’s important considerations such as food and water security, human rights and poverty.
From the findings of the study, Kenya’s large population and the rising domestic wealth gives it a high potential of raising over Sh2trillion in sustainable retail investment by 2030 as close to 40 per cent of investors in the country are willing to inject some funds towards addressing the climate issues.
Moreover, the study found out the top ESG priorities for investors in Kenya included climate change and carbon emissions; food and water scarcity which accounted for 36 per cent, poverty and income inequality at 32 per cent and human rights at 24 per cent.
The report further indicated that comprehensibility (48 per cent), accessibility (48 per cent) and comparability (47 per cent) were the top barriers that investors in Kenya faced and they need to be addressed for them to unlock the Sh2trillion financing for sustainable investments.
“We know that a rapidly growing number of our clients want their investments to make a positive impact on the environment and in society and there is a significant appetite to take ESG investment from a niche play to a mainstream investment strategy. As a bank, we have the expertise and solutions to help investors achieve both profit and purpose. Importantly, we need to enable the shift now for a more sustainable future,” said Paul Njoki, Head of Affluent Banking and Wealth Management in Kenya and East Africa at Standard Chartered Bank.
The report indicates a need for democratizing access to sustainable investments for investors by relying on digital platforms to offer solutions available in the market in addition to addressing investor apprehensions and providing data-led advice on how to match their ESG priorities with the appropriate solutions.
The research which was commissioned by Standard Chartered and conducted by PwC Singapore carried out a survey among some 3113 individuals across 10 markets and three investor segments to understand retail investors’ behavior traits, interests in, motivations and barriers towards sustainable investments.
