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About our Sustainability Report

About our theme

Absa’s 2023 Sustainability Report theme Banking on a Better, Sustainable Future is inspired by the Bank’s commitment to sustainable development and responsible banking practices. Through its partnerships, initiatives, and investments, Absa is actively contributing to the advancement of sustainable practices and the creation of a more inclusive and sustainable economy in Kenya and beyond. By aligning its operations with the United Nations Sustainable Development Goals (SDGs) and investing in initiatives that promote clean energy, responsible construction, and climate-smart agriculture, Absa is actively working towards a better and more sustainable future for Kenya and the region.

Scope and purpose

Our Sustainability report aims to communicate our impact on material Environmental, Social and Governance (ESG) issues, such as climate change, customer well-being, governance, human rights and diversity, equity and inclusion. It discloses how our business is managing ESG risks, and how the maximisation of our risk management approach in this area creates opportunities for the Bank to enhance its ability to continue lending to Kenyans and preserve value for all our stakeholders. The report outlines the ways in which Absa aims to fulfil its purpose of “Empowering Africa’s tomorrow, together ... one story at a time” by using financial expertise to do good, thereby creating value for society.

Reporting period

This report covers the financial year from January 1, 2023 to December 31, 2023. For a more detailed overview of the value we add to our stakeholders and our impact on society, this

report should be read together with the 2023 Absa Kenya Integrated Report and Financial Statements.

Disclosures

The ESG reporting disclosures at Absa Bank Kenya PLC at hand are not subject to standalone external assurance. The Audit and Risk Committee of the Board has the primary role of ensuring

integrity in non-financial reporting and audit and overseeing the maintenance of sound internal control and risk management systems. The Bank will commission external auditors, to provide assurance in its ESG reports. We have taken proactive steps in defining a structured approach for disclosing material climate-related risks, opportunities, and strategic decisions to all stakeholders, including investors and regulators. The Bank submitted the first Task Force on Climaterelated Financial Disclosures (TCFD) report to the Central Bank of Kenya (CBK) by June 30, 2023, and will be part of our annual reporting practice going forward. In a bid to reduce our carbon emissions, the Bank started measuring and disclosing Scope 1 and Scope 2 emissions in our 2022 TCFD report.

Audiences

This report is published for all our stakeholders. Our stakeholders include, but are not limited to, current and prospective clients, investors, employees, suppliers, governments, regulators and non-governmental organisations.

Reporting Frameworks

Absa Bank Kenya PLC has prepared this report with reference to the Global Reporting Initiative (GRI) Standards as well as other regulations and legislative frameworks; including the Nairobi Securities Exchange (NSE) ESG Disclosures Guidance Manual and Central Bank of Kenya’s Guidance on ClimateRelated Risk Management (Guidance) to commercial banks and mortgage finance companies. Furthermore, as the nature of ESG matters, frameworks, and reporting obligations continue to evolve, we refine our reporting approach over time to ensure that it is providing stakeholders with relevant, transparent, and timely information on our ESG performance and impact.

Absa has standardised reporting metrics for Sustainability and climate risks and opportunities. Externally, these metrics are communicated annually through the Sustainability and TCFD report (Climate report), and internally, quarterly to the Sustainability Steering Committee.

Message from the Chairman

In everything we do, Absa Bank aims to meaningfully contribute and accelerate a significant positive impact on society while also entrenching itself as a relevant brand driving a sustainable future.

The Board of Absa Bank Kenya PLC remains unwavering in its mandate to drive the successful implementation of the Bank’s sustainability strategy, which focuses on 13 key areas of consideration outlined in this Sustainability Report.

As part of our organisational commitment to this critical agenda, the Bank has instituted a comprehensive framework that ensures all ESG policies and strategies are rigorously reviewed, approved, and continuously implemented. The Board, in its role of ensuring good governance, has institutionalised several key committees, including Audit and Risk, Credit, Corporate Governance, Nominations and Remuneration, and Strategy.

We are fully committed to realising the Sustainable Development Goals (SDGs) within the next six years as a bank. As one of Kenya’s leading financial services organisations, we are proud of our progress and significant contribution to attaining the SDGs.

Our commitment to diversity and inclusion remains evident, with 15.5% of our active suppliers being women, youth, and persons with disabilities. We have also continued to enhance financial inclusion and enterprise development among the marginalised yet high-potential population segments such as women and MSMEs.

Furthermore, in 2023, we allocated KES 150 million for sustainability and citizenship-related projects, contributing positively to the upliftment of the socioeconomic status of the communities where we operate.

In education, Absa’s Ready to Work programme has continued to impact thousands of young people, equipping them with the requisite skills to transition from institutions of higher learning to the world of work, reaching 20,274 youth in the year under review. Additionally, we continued to reinforce efforts aimed at closing the digital divide through our Computers for Schools programme, installing computer labs in 65 schools across the country.

In a time of accelerated climate change and heightened social and sustainability concerns, Absa Bank continues to execute our

climate action and environmental conservation efforts. We are dedicated to transitioning our Scope 1 and 2 emissions to net zero by 2040 and Scope 3-financed emissions by 2050.

The Board acknowledges the management team’s efforts in executing the Bank’s strategy, bringing Absa closer to its 2030 environmental action plan. Part of this plan includes incorporating sustainable financing into the lending envelope and aligning with the Central Bank of Kenya’s Guidance on Climate-Related Risk Management. In 2023, the Bank allocated KES 63 billion to sustainable finance, with 84% of the allocated KES 26 billion for climate financing taken up. Of this, KES 2 billion was specifically allocated for climate-smart agriculture.

For our customers, our unwavering dedication remains to offer convenient, safe, and easily accessible solutions and services to meet their diverse needs and aspirations.

As a vote of confidence in our efforts, in 2023, we were honoured to be the 1st runner-up in the Best Internal Customer Experience category at the Service Excellence Awards. This achievement highlights our commitment to delivering exceptional customer experiences. We have made significant improvements compared to 2022, with a retail banking composite score of 69% in 2022, increasing to 93% in 2023. The customer experience index also rose impressively from 86% in 2022 to 110% in 2023.

To sustain our growth momentum, we understand the importance of serving our customers with excellence. This includes resolving grievances promptly, enhancing system reliability, and providing the flexibility to transact through preferred channels.

For us, it is not only about the big numbers but also about the big picture – bringing the world one step closer to zero emissions while addressing socioeconomic challenges to ensure a better future for our stakeholders. Our sustainability future has now become fundamental to our business and the value we provide. Together, we shall continue to forge ahead and address the challenges of climate change, ensuring a brighter and greener future for Kenya and beyond.

Thank you for being with us on our journey of common prosperity for all.

Message from the CEO

Dear Stakeholders,

Sustainability has been an integral part of Absa Bank Kenya’s operations, which we believe has contributed to our success over the years. We have evolved with the times, keeping our compass fixed on the direction of environmental, social responsibility and governance.

In 2023, we made significant strides in advancing our sustainability efforts. This edition of our Sustainability Report’s theme, “Banking on a Better Sustainable Future,” aptly reflects our transition towards a forward-looking, net zero future. Living in a time of unprecedented change, we are constantly evaluating our strategies. We understand that the geopolitical, social, environmental, and technological shifts of the next decade will have far-reaching effects. In response, we remain resolute in our commitment to turning our words into action, implementing strategies that will positively impact the environment, enhance customer experiences, and support the communities we serve.

Living in a time of unprecedented change, we are constantly evaluating our strategies. We understand that the geopolitical, social, environmental, and technological shifts of the next decade will have far-reaching effects. In response, we remain resolute in our commitment to turning our words into action, implementing strategies that will positively impact the environment, enhance customer experiences, and support the communities we serve.

Advancing environmental conservation with community partnerships

Last year, we made significant progress in environmental conservation by partnering with the Kenya Forest Service to launch a nationwide tree-planting initiative. This project involves Community Forest Associations, including groups representing women, youth, and persons with disabilities (PWDs). It aims to plant 10 million trees by 2032 while creating employment opportunities for these communities. In alignment with the Kenyan government’s goal of planting 15 billion trees by 2032, we have already planted 10,000 trees at Njukiini Forest in Embu County.

Additionally, recognising the need for a conducive environment for sports, we collaborated with Athletics Kenya, Safaricom PLC, and the Stockholm Environment Institute to plant over 2,500 trees at Kasarani Stadium.

Promoting growth and inclusion through strategic initiatives

As a purpose-led institution, our mission is to help stakeholders navigate challenges and embrace opportunities for growth. We support small and medium-sized enterprises (SMEs) by

monitoring their evolving needs. Our See Her Empowered (SHE) Star Programme has empowered over 35,000 women entrepreneurs, promoting financial inclusion. Our Women in Business initiative, backed by a KES 10 billion fund, aims to enhance credit access for women-owned SMEs by 2025.

We prioritise gender equality in our inclusive workplace and support persons with disabilities (PWDs) through our PWD Roadmap, targeting 5% of our suppliers by 2025. Expanding banking access is crucial; our Timiza platform has attracted over five million customers since 2018, disbursing KES 21 billion in 2023, including 1.5 million loans to 300,000 women customers.

Delivering sustainable economic impact

Our initiatives demonstrate our commitment to economic impact, with total contributions rising from KES 372.76 billion in 2022 to KES 478.9 billion in 2023. We increased employee wages and benefits to KES 11.7 billion, supporting our recognition as a top employer in Kenya and Africa. Payments to capital providers reached KES 8.4 billion, while corporate tax payments rose to KES 16.2 billion. Our investments in green initiatives grew to KES 26.9 billion, and local procurement spending reached KES 4.5 billion. We also equipped 65 computer labs and donated KES 25 million to enhance education, fostering sustainable development in our communities.

Commitment to innovation and sustainability

At Absa, innovation and sustainability are central to our mission. We recognise the significant impact of our actions on the environment, society, and our long-term success. By leveraging advanced technologies and insights, we aim to mitigate risks, seize opportunities, and create lasting value for all stakeholders.

We are uniquely positioned to address critical business and economic challenges for our clients. We act with urgency and accountability in all our endeavours. I invite you to read the following report to learn how we are strengthening our business and supporting our communities. From driving net zero to expanding financial inclusion and investing in infrastructure, we are committed to action and measurable results, positioning Absa for future success.

Our Values

Our values act as guiding lights, providing direction and inspiration. As we embark on this journey of sustainable outperformance, our culture becomes the foundation upon which we engage with the world and shape our future.

Absa Kenya at a glance

Overview of Sustainability Performance in 2023

Corporate Governance

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Effective governance is at the core of Absa’s ability to navigate the volatile and complex operating environment successfully. Absa’s Board of Directors (“the Board”), ultimately responsible for governing the Company, believes that good corporate governance and strategic decision-making are inextricably linked.

The Board is committed to the highest standards of corporate governance, which it believes are critical to achieving the business objectives and maintaining the trust of its investors, customers and other stakeholders. Please refer to pages 81-109 of our 2023 Integrated Annual Report for a detailed discussion of our governance practices.

Sustainability Risk Policy Overview

Our Sustainability Risk Policy specifies the broad principles and control requirements for managing sustainability and climate-related risk management
“At Absa Kenya, we strive to be an active force for good in everything we do”

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Materiality Topics

Our organisation focuses on the most significant environmental, social, economic, and governance issues that have an impact on us and our stakeholders. This section explains these important topics, how they affect us, and how we address them. In line with our dedication to the Sustainable Development Goals (SDGs), we have identified and included references to the SDGs that we prioritise and that are most applicable to each chapter

The Global Reporting Initiative (GRI) updated its standards in 2023 to align with the new Universal Standards. The GRI Topic Standards have been revised, and the previous groupings of 200 (Economic), 300 (Environmental), and 400 (Social) were eliminated. Instead, there are now 31 separate Topic Standards that companies should follow when reporting on Material Topics

The material topics for Absa Kenya have been prepared in accordance with the relevant GRI Topic Standards. These standards guide reporting material topics and disclosing the impacts identified through the materiality process. By following the GRI Standards, we are able to demonstrate our commitment to transparency and sustainability reporting.

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Environment KPI Summary

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2023 Citizenship Achievements

Diversity and Inclusion

Equal Opportunity and Diversity at Absa At Absa, we are committed to being an equal-opportunity employer that values and promotoes diversity and inclusion. These principles are integral to our sustainability agenda and are deeply ingrained in our people’s function policy. Beginning with the recruitment process, we strive to attract and onboard individuals from all backgrounds.

Inclusion of the Differently Abled In our efforts to foster inclusivity, we have actively encouraged differently-abled individuals to apply, increasing the number of differently-abled employees within our workforce. Currently, we are proud to have 29 colleagues with disability, accounting for approximately one percent of our entire workforce. However, our target is to achieve a 5% representation of persons with disabilities (PWDs).

Gender Diversity Milestones In terms of gender diversity, we have made significant strides. Among our total workforce, 51% are women and 49% are men. We are committed to maintaining gender balance at all levels of management, aiming for a 50% representation of women. We have already made progress in this area, with 51% of women in junior management roles, 47% in middle management, and 40% at the board level in 2023. Our ultimate goal is to achieve a 50% representation of women by 2025.

Employment & Wellbeing

At Absa, employee wellness and safety are top priorities. We have developed various programmes to support the emotional and mental health of our employees. These initiatives extend to colleagues who work remotely as well. For example, we provide support for purchasing ergonomic furniture to ensure their comfort.

To promote emotional intelligence, we organise regular sessions led by our HR department. These sessions aim to equip employees with the necessary skills for emotional well-being. In 2023, our employee wellness programmes focused on promoting work-life balance. We encouraged employees to engage in physical exercise for their mental and physical fitness. As part of this initiative, we provided equipment such as skipping ropes to help them stay fit. Additionally, we hired a physical fitness coach who conducted virtual training sessions for employees between 5pm and 6pm.

We also extended our wellness initiatives to include employees’ nannies by offering training on first aid. Furthermore, we facilitated the process of obtaining new car number plates for our employees to reduce the inconvenience caused by a recent directive from the National Transport and Safety Authority. Post-pandemic, we have implemented flexible working hours