Environmental, Social, and Governance (ESG) reporting is quickly becoming a defining standard for Kenyan businesses. Once considered a “global buzzword,” ESG has shifted into the mainstream, with regulators, investors, and consumers demanding more transparency from companies across sectors.
In December 2021, the Nairobi Securities Exchange (NSE) issued new guidelines requiring listed firms to disclose non-financial metrics on environmental impact, labor practices, and governance standards. Since then, adoption has been slow but steadily rising. By mid-2023, only 29 out of 61 listed companies, about 46 percent, had integrated ESG disclosures into their annual reports, according to the Capital Markets Authority. NSE Chairman Kiprono Kittony noted at a 2023 forum that “the business case for sustainability is no longer in question. ESG is now a license to operate.”
For Kenyan companies, ESG reporting is about more than compliance. It has become an important gateway to capital, a marker of good governance, and a way to strengthen consumer trust. Investors are increasingly tying funding to sustainability commitments. In September 2023, Safaricom Plc secured a KES 15 billion sustainability-linked loan, the largest in East Africa, to finance its green and social impact projects.
Regulators are also tightening requirements. The Institute of Certified Public Accountants of Kenya (ICPAK) has announced a roadmap to align with the International Sustainability Standards Board (ISSB). Public interest entities will be required to comply by 2027, with large private firms following in 2028 and SMEs by 2029.
At the same time, consumers are rewarding businesses that demonstrate responsibility. “Sustainability reporting is not just a corporate responsibility but an essential pillar of our business strategy. Being accountable on Environmental, Social, and Governance (ESG) ensures that we remain committed to our core mission of transforming lives,” said Safaricom CEO Peter Ndegwa at the release of the company’s 2023 Sustainable Business Report.
A handful of Kenyan companies are already setting the pace. Kakuzi Plc has published stand-alone ESG reports since 2021, detailing its carbon footprint, community projects, and governance policies.
“Since 2017, we have scientifically tracked and measured our carbon footprint and published this as part of our annual ESG report. We support environmental sustainability and biodiversity and continue to identify the environmental impacts of our activities to minimise and mitigate them responsibly,” said Kakuzi Managing Director Chris Flowers when launching the firm’s fourth ESG report.
Safaricom, which has consistently published sustainability reports for over a decade, continues to highlight the social and economic impact of its operations. “Safaricom’s operations have become a lifeline for many Kenyans, and M-PESA continues to transform lives by offering solutions that impact a large part of our population,” added Ndegwa during the launch of the FY24 Sustainable Business Report.
Other brands are also stepping forward. Kenya Airways unveiled its first stand-alone sustainability report in 2024, with a commitment to make aviation greener. “We are building a more sustainable and inclusive future, not only for Kenya Airways but for aviation in Africa,” the airline noted in its statement. Local consumer brands are equally taking action. “As we continue on our journey toward sustainability, our focus is on creating a positive impact in every facet of our operations,” said Bio Foods CEO Joachim Westerveld as the company launched its latest sustainability report.
These examples show how ESG reporting is spreading beyond the Nairobi Securities Exchange to touch nearly every sector of the Kenyan economy.
Despite this momentum, hurdles remain. A 2024 WWF Sustainable Banking Assessment showed Kenyan banks scoring an average of 43.7 percent on ESG integration, a sign of progress but also of limited depth and transparency. For most companies, the barriers are significant. Many lack standardized data collection systems. Others find the costs of compliance too high, especially small and medium enterprises. A shortage of in-house expertise also means that most firms continue to rely on external consultants. “The biggest challenge is not intent, but capacity. Many businesses know ESG is important but lack the systems to measure and report reliably,” said ICPAK CEO Edwin Makori earlier this year.
As 2025 unfolds, ESG reporting is no longer optional in Kenya. It is becoming a strategic imperative. Companies that embrace it will unlock access to capital, stay ahead of regulations, and earn consumer trust. Those that delay risk penalties, lost opportunities, and reputational harm in a marketplace that is becoming greener, more transparent, and less forgiving.
