In this interview with CFO East Africa, Stanbic Bank Kenya head of sustainability Priscilla Were reflects on navigating the shift towards mandatory IFRS S1 and S2 adoption and steering the bank through the evolving green finance landscape.
Priscilla also reveals how early movers can use compliance as a competitive advantage rather than a burden.
Global standards such as IFRS S1 and S2 are taking hold. Kenya has also set mandatory adoption dates. How should organisations prepare for compliance and integration into financial reporting?
In the Kenyan market, the shift toward mandatory IFRS S1 and S2 adoption marks a transition from voluntary disclosure to a strategic imperative. Organisations should approach this not as a compliance hurdle but as an opportunity to embed sustainability into their business models.
Preparation begins with a rigorous gap analysis. This assesses current reporting capabilities against global benchmarks. It is followed by the establishment of cross-functional governance structures. These coordinate finance, sustainability, risk, credit, and governance functions.
Strengthening board-level oversight and aligning sustainability with corporate strategy are critical. Finance professionals must be upskilled to translate ESG impacts into financial terms. At the operational level, companies must build robust systems for ESG data collection, verification, and integration into financial reporting.
Early stakeholder engagement and voluntary disclosures help refine processes. A phased implementation ahead of the 2027 deadline mitigates compliance risks. This ensures the smooth integration of sustainability disclosures into audited financial statements.
What are the most persistent misconceptions about linking sustainability initiatives to financial performance?
A persistent myth in our regional landscape is that sustainability acts as a philanthropic cost centre rather than a driver of core financial value. On the contrary, sustainability initiatives catalyse revenue growth. They drive operational efficiencies and cost savings through optimised resource consumption and new revenue streams.
Furthermore, the belief that benefits are exclusively long-term is a misconception. Proactive ESG management yields immediate gains in brand reputation and talent retention. It also delivers a measurable reduction in regulatory risk.
How can finance leaders make a compelling case for sustainability to boards and investors?
Finance leaders must move beyond the moral argument. They need to present sustainability in the language of capital allocation and risk management. Leaders quantify the financial impact to build a compelling case. They demonstrate how initiatives drive revenue growth from green products. This also lowers the cost of capital by attracting ESG-focused investors.
Utilising scenario analysis is essential for board-level buy-in. This contrasts the competitive advantage of proactive engagement against the financial risks of inaction. Such risks include stranded or damaged assets, carbon taxes, or supply chain volatility.
What innovative instruments or partnerships are emerging to help fund the green transition?
The green finance ecosystem is evolving rapidly to support the transition. At Stanbic, we actively deploy capital in transformative ways. Since 2024, we have issued over KSh 700 million in solar financing to individuals and businesses. This directly supports Kenya's renewable energy transition. In 2025, we issued KSh 2.5 billion in climate-smart agriculture loans.
We structured a landmark $25.9 million facility for Gateway Real Estate Africa. This funds the completion of Eneo at Tatu Central. It is a green-certified commercial development that prioritises energy efficiency, water conservation, and sustainable materials. This transaction exemplifies how we deploy capital to de-risk sustainable infrastructure while generating returns.
Our approach is sector-specific. Nine percent of our loan book supports agriculture value chains. Our infrastructure portfolio includes renewable energy and sustainable transport projects like the Nairobi Expressway.
Data quality remains a barrier to ESG reporting. What systems can improve reliability and comparability?
Data quality remains the cornerstone of investor trust. Organisations implement centralised ESG data management platforms to overcome current barriers. These integrate with existing financial systems to automate validation and reduce manual error.
Firms establish clear data protocols aligned with GRI, IFRS and industry-specific standards. They apply the same internal controls and external assurance used for financial reporting. This ensures their sustainability disclosures are both comparable and audit-ready.
The key is training both frontline and back-end staff. We invest in equipping every relationship manager and our credit origination teams. They learn to identify ESG risks during client conversations. This turns data collection from a compliance burden into a value-added advisory opportunity. It ultimately strengthens client relationships.
Regulators across Africa are increasing pressure on disclosures. What changes do you expect in the next three to five years?
We anticipate an intensified regulatory push across Africa. This moves rapidly from voluntary frameworks to mandatory disclosures. Expect a focus on the harmonisation of Kenyan regulations with international standards. This ensures global market competitiveness.
Future mandates will likely extend beyond climate to include nature, biodiversity and human rights. Regulators increasingly demand the digitalisation of reporting to enhance transparency and enforcement.
For teams facing resource constraints, what practical first steps can embed sustainability into the finance function?
Speaking from experience in the East African market, even well-resourced institutions start pragmatically. They leverage existing financial reporting systems to track simple sustainability metrics, such as energy costs, travel expenses, and paper usage. Focusing on material issues enables the strategic deployment of resources where financial and impact returns are clearest.
Institutions integrate rather than duplicate efforts. We embed E&S risk screening into existing credit approval workflows for material transactions rather than creating parallel systems. Relationship managers complete enhanced checklists during normal client due diligence. This ensures minimal disruption and maximum integration.
It is also important to build on quick wins. Our waste recycling programme achieved a 99.92 percent diversion. We also eliminated bottled water across 98 percent of locations. These initiatives require minimal investment but generate immediate cost savings and employee engagement. These visible successes build organisational momentum for larger initiatives.
Finally, we invest in people. We direct training budgets toward equipping current staff with ESG risk and opportunity identification skills rather than building specialised teams.
