Stanbic Bank Kenya has announced a significant adjustment to its pre-credit screening threshold, revealing plans to scrutinize loans of Sh50 million and above for environmental, social, and government (ESG) compliance.

This marks a noteworthy reduction from the previous threshold of Sh300 million.

Joshua Oigara, CEO of Stanbic Bank Kenya and South Sudan, emphasized that this decision aligns with the bank's commitment to fostering sustainability in its operations.

Oigara highlighted the bank's dedication to directing a substantial portion of its loan portfolio, specifically at least 20 per cent, towards sustainable green projects within the next three to five years.

The lower screening threshold of Sh50 million is expected to cover a significant portion, approximately 85 per cent, of the bank's total loan portfolio.

Oigara pointed out that the move is not solely motivated by environmental concerns, but extends to evaluating how clients conduct their businesses.

The expanded scrutiny will encompass various aspects, including human rights, child labour, and compliance with relevant laws and regulations.

This holistic approach reflects Stanbic Bank's recognition of the broader impact that businesses can have on society beyond environmental considerations.

"The increasing severity and frequency of climate change risks mean lenders will have to elevate their accountability to society by not funding projects that aggravate the situation," Oigara stated, emphasizing the bank's commitment to responsible lending practices.

The decision to revise the screening threshold is a proactive measure in response to the evolving challenges posed by climate change.

Stanbic Bank Kenya's initiative also resonates with its adherence to the 10 principles of the United Nations Global Compact, focusing on human rights, labour, environment, and anti-corruption.

This commitment underscores the bank's alignment with international standards and its determination to contribute positively to societal well-being.

As the banking sector increasingly recognizes the importance of sustainable finance, Stanbic Bank Kenya's decision to enhance ESG screening reflects a forward-thinking approach that positions the institution at the forefront of responsible and environmentally conscious lending practices.