KENYA Trends and Developments Contributed by: Sammy Ndolo, Brian Muchiri and Damaris Muia, Kieti Law LLP
Cliffe Dekker Hofmeyr (Kieti Law LLP) Merchant Square, 3rd floor, Block D Riverside Drive P.O Box 22602-00505 Nairobi Kenya Tel: +254 710 560 114 Email: cdhkenya@cdhlegal.com Web: www.cliffedekkerhofmeyr.com Introduction Kenya’s corporate governance landscape has undergone a profound transformation in recent years, reflecting a growing emphasis on sustain - ability, transparency, and accountability. A con - fluence of factors – including increased investor scrutiny, regulatory developments, and a height - ened awareness of the social and environmen - tal impacts of corporate activities – has driven this evolution, and the transformation has been marked by a series of legislative, regulatory, and institutional reforms that have sought to align Kenya’s corporate governance framework with international best practices. The Evolution of ESG Reporting and Integration Regulatory drivers of ESG integration Integrating Environmental, Social, and Gov - ernance (ESG) factors into corporate govern - ance has become a paramount consideration in Kenya. Driven by growing investor concerns about climate change, social impacts, and ethi - cal business practices, companies increasingly recognise the imperative of adopting sustain - able strategies and reporting on their ESG per - formance.
Regulatory bodies have played a pivotal role in shaping the ESG landscape in Kenya. The Nai - robi Securities Exchange (NSE) and the Capital Markets Authority (CMA) have issued guidelines and codes that mandate ESG disclosure and reporting for listed companies. These regulations require companies to disclose information on their governance practices, environmental and social risk management, stakeholder engage - ment, economic performance, anti-corruption efforts, occupational health and safety, diversity, data privacy, and emissions. Board-Level Oversight and Sustainability Committees A notable development in the ESG space has been the NSE’s encouragement of listed compa - nies to establish dedicated sustainability com - mittees at the board level. These committees oversee the implementation of ESG strategies and ensure sustainability is embedded in cor - porate decision-making. The formation of such committees signals a shift from ESG being a peripheral concern to becoming a central pillar of corporate governance. The CMA’s Code of Corporate Governance Practices for Issuers of Securities to the Public
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