This newsletter gives you highlights of selected sustainability insights that were, perhaps, too long (you) didn’t read (TLDR) or there’s just too much out there to read. The highlights presented cover insights gleaned from a global, regional (African), and national (Kenyan) perspective. Happy reading!
GLOBAL
The US Securities and Exchange Commission Approves Climate Rules
U.S. government oversight agency responsible for regulating the securities markets and protecting investors, the Securities and Exchange Commission (SEC) approved new rules for publicly listed companies to disclose climate risks and GHG emissions. The new SEC rules have been a 2-year uphill struggle for the agency to realise and received the largest public commentary ever to date.
As of 2026, the new rules require larger companies to disclose their scope 1 (emissions from the company’s owned operations) and scope 2 (purchased energy) emissions, where these are financial material for investors. Additionally, companies will need to disclose significant risks related to climate change.
Earlier this month, the US Supreme Court ruled that companies cannot be sued e.g. for securities fraud for not disclosing climate risk. Although this is a punch in the gut for the new climate rules, the SEC still has authority to step in and take action. Senators are seeking to overturn the climate rules, so the SEC’s uphill struggle continues.
KPMG’s 2022 global sustainability reporting survey showed that only 2% of the top 100 companies in North America provided integrated reporting, all other world regions were in double digit integrated reporting.
My two-cents: Where would we be as a world without regulators – and if we had to rely only on politically elected leaders? The SEC climate rules are a vital step in the right direction (progress not perfection).
KPMG U.S. CEO Outlook Survey
KPMG recently released its United States of America CEO pulse survey, and US CEO’s are pretty optimistic! 87% are confident in US economic growth, and 78% in global economic growth and their own company’s growth, and only 4% expect workforce reductions.
For these top 100 company CEOs, geopolitics, regulatory changes, cyber security and tax as the key threats to growth. Generative AI will be a key way to help companies solve these growth challenges and gain competitive advantage. Already companies are upskilling employees, evaluating compliance, ensuring human oversight and working regulators and peers to promote responsible AI use.
Employee wellbeing, hybrid working, upskilling will be key ways to take care of their people, recognizing the strong ethical organizational culture will drive growth.
(Pleasantly) Surprisingly, executing ESG initiatives was the top priority for US CEOs in the next year, followed by prioritizing inflation, digitization, supply chain agility and improving customer experience. 75% of CEOs expect return on their sustainability investments in the next 7 years with operations being the primary focus for sustainability efforts.
My two-cents: It’s welcome to see US CEO’s aim to move forward with ESG, employee wellbeing and technology to cement their business’s future (irrespective of the news, stories are out there). It would be unrealistic to deny these 3 macro-trends or issues as non-essential to business resilience and survival.
AFRICA
End Natural Resource-back Loans
The Africa Development Bank(AfDB) boss, Akinwumi Adesina, is asking African leaders to stop natural resource-backed loans, and if any exist to seek the AfDB’s support to re-negotiate them.
Natural resource-backed loans are where governments or state-owned entities receive funds(loans) for future production or delivery of a resource. Often resource-backed loans are promoted as a way for countries to fund infrastructure and development, but they come with significant risks and consequences. (Extractive Industry Transparency Initiative).
The AfDB highlighted that: one cannot price the asset properly; assymetric negotiations and power imbalances between the country and the lender; lack of transparency; potential for corruption; lack of sustainable debt managements; as some of the critical and long term issues with resource-backed loans.
About 11 African countries have taken resource-back loans in the 2000s from policy banks, state-linked companies, western commodity traders, etc. The AfDB and IMF have stepped in to help Chad, Angola and the Republic of Congo renegotiate their natural resource-back loans with lenders as these loans are having significant negative repercussions to the countries e.g. Chad’s financial crisis following an oil-back loan with a commodity trader has the country using all its oil proceeds to pay its debts.
This call to stop these loans is not new, in 2023 the IMF and AfDB jointly warned African countries against natural resource back loans.
African countries continue to face significant debt repayment challenges due to impacts from C-19, inflation, infrastructure investment needs. This year, African countries will pay USD 74Bn debt servicing compared to USD 17Bn in 2010. African countries also face staggeringly higher premiums at international capital markets yet evidence shows the region has a lower default rate than other regions.
Although the global financial architecture remains heavily skewed against African countries, opaque natural-resource-backed loans will not secure Africa’s own future.
My two-cents: This piece of information has me questioning who ‘owns’ a country’s natural resources, and the role of government as a ‘caretaker’ rather than ‘owner’ or ‘sole decision-maker’. In some countries, natural resource ownership it is enshrined in constitutions that these resources belong to the citizens e.g. in South Africa the people own the resources, the government is the custodian. In Ghana responsibility for natural resources is vested in the President in trust for the people. In other countries it may not be as clear, let alone known by the people. These are interesting times ahead for citizens, the leaders they elect to represent them, and the responsible protection and management of the peoples’ natural resources.
Electricity to 300 million Africans by 2030
The World Bank and African Development Bank (AfDB) president’s recently met and announced their commitment to connect 300 million people on the African continent with electricity in the next 6 years.
600 million Africans (43% of the continent’s population) lack electricity. Africa’s best source of electricity is solar, but only 1% is installed solar PV capacity – despite it being the cheapest electricity source on the continent. (IEA, 2022). For example, in 15 years, Rwanda increased access to electricity in households from 9% in 2009 to 75% in 2024, this also includes connecting health centres, schools, etc. Rwanda’s is one of the fastest electrification expansions on the continent. Additionally, Kenya and Ethiopia are also electrifying at pace with Rwanda – with all three countries prioritizing renewable energy for their electricity. Ghana has reached over 85% access to electricity through its significant hydropower generation.
Access to electricity is integral to human development – human development is measured against: 1) long and healthy life, knowledge, and decent standard of living. Electricity is so essential to sustainable development that it is SDG7: affordable and reliable energy for all. Electricity is essential for health care, education, digital inclusivity, reducing in-door air pollution, job creation, and so much more.
The World Bank has committed to connecting 250 million people and the AfDB 50 million people through distributed renewable energy systems. To achieve this, governments, multilateral banks and private sector will need to also come to the table to deliver development opportunities to 300 million people.
According to the IEA’s Africa 2022 Outlook, extending national grids; solar mini-grids and stand-alone systems particularly in rural areas are the continent’s better solutions for electricity access.
My two-cents: This brightened my day (pun intended!). Possibilities and quality of life changes greatly with electricity – life is tougher without it. In 6 years’ time, 300million people on the continent will have electricity. That’s like the entire populations of the UK, France, Germany, South Korea, Australia; with access to electricity, imagine that! And before some readers’ panic, yes – renewable energy sources are key to the electrification plan’s success.
KENYA
Kenya To Pioneer Sustainability Linked Bonds (SLB)
Working with World Bank, Kenya is aiming to issue Africa’s first Sustainable Linked Bond by the end of this year, 2024.
Kenya is positioning itself as a regional and international climate action champion, with ambitious policy and rhetoric towards its sustainable development. The new financing from this SLB totaling USD 500 million (Kshs 66Bn), will be used to bridge the country’s budget deficit of about 4% of GDP 2024/2025. Climate impacts already impacting the country are estimated at about 3% of the GDP.
Sustainability-linked bonds have a concrete sustainability performance framework with timelines and KPIs to ensure sustainability commitments are being met for the financing received.
Kenya also plans to issue additional bonds in Japan (Samurai bond) and China (Panda bond) later this year to finance the budget deficit, infrastructure development and e-mobility.
Chile was the first country in the world to take an SLB valued at USD 2 Billion in 2022 with the World Bank and Uruguay also issued an SLB for 1.5 Billion in the same year. For Chile, sustainability terms included increased interest rates if the country missed targets on emissions reduction and expanding renewable energy. For Uruguay, interest rates will vary depending on its emissions reduction and forest targets.
Kenya’s private sector has already been making headway with sustainability-linked financing e.g. Safaricom, M-KOPA and Greenlight Planet Kenya, have all leveraged SLBs, and Acorn Holdings was the 1st Kenyan company to successfully issue a green bond in 2019.
My two-cents: It’s good to see new sovereign sustainability-relevant financing instruments at play. I hope this will inspire and increase the pace for domestic sustainable financing (lending and investment) opportunities within Kenya. I can’t deny the ‘debt burden’ worry playing up at the back of my mind, but I’m not an expert so I won’t go there here.