Shaikha Al-Essa, Director of Public Relations at the Kuwait Banking Association, stated that KBA participated in the State of Kuwait’s pavilion at the 28th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 28), which was held during the period from December 30 to 12 in Dubai, in coordination with the Environment Public Authority and the Kuwait Fund for Economic Development. And Kuwait Petroleum Corporation. The State of Kuwait’s pavilion at the conference was opened by His Excellency the Minister of Foreign Affairs, Sheikh Salem Abdullah Al-Jaber Al-Sabah, and the KBA participated as a representative of the Kuwaiti banking sector, where the Secretary-General of Kuwait banking association, Dr. Hamad Al-Hasawi, spoke about “the role of banks in environmental, social and governance issues,” and explained that the role played by banks within the framework of Environmental, social and governance criteria (ESG) have evolved significantly in recent years. ESG criteria refer to the criteria that investors and stakeholders consider to evaluate a company’s sustainability and societal impact.
Al-Hasawi pointed out that banks play an important role in this framework by integrating environmental, social, and governance standards into their operations through financing sustainable projects, environmentally friendly and socially responsible projects, renewable energy projects, sustainable infrastructure development, and initiatives aimed at addressing social and environmental challenges. By providing financing, banks support the growth of sustainable industries and drive positive change.
Banks are also incorporating ESG factors into their risk assessment processes, where the creditworthiness of borrowers is effectively assessed by analyzing environmental and social risks, such as climate change or social inequality. These practices help banks identify potential risks and opportunities associated with environmental and social governance issues.
Al-Hasawi stressed that banks are keen to encourage their corporate clients to improve their environmental, social and governance performance by requesting environmental, social and governance-related disclosures, and enhancing reports in this regard, as this information enables banks to evaluate the company’s sustainability practices and make investment decisions accordingly. Enhancing environmental, social and governance reporting contributes to the standardization and transparency of data, which benefits investors and stakeholders alike. As well as providing guidance and resources to support companies in adopting sustainable practices, implementing responsible supply chain management, and developing ESG sustainability strategies, resulting in positive outcomes for both parties and contributing to the overall progress of ESG sustainability goals.
Al-Hasawi pointed to the financing services and products that banks are developing in this field to meet the growing demand from investors, which include green bonds, social impact bonds, and sustainable investment funds. By providing these options, banks allow investors to align their capital with environmental, social and governance goals and encourage more sustainable business practices.
On the other hand, Al-Hasawi praised KFH’s participation in the conference for highlighting its efforts and achievements in the field of environmental, social and governance sustainability as a distinguished example of what Kuwaiti banks are doing towards achieving ESG sustainability goals.
Al-Hasawi concluded by emphasizing that by enhancing environmental, social and governance principles and integrating them into banking operations, banks can drive sustainable development and contribute to a more inclusive and resilient world.
