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ESG stands for Environmental, Social, and Governance, and it is a framework that helps stakeholders understand how an organization is managing risks and opportunities related to these critical criteria. ESG takes a holistic view that sustainability extends beyond just environmental concerns. It encompasses how a company manages its environmental impact, how it handles social relationships with employees, suppliers, customers, and communities, and the quality of its governance structures. Environmental criteria within ESG evaluate how a company safeguards the environment. This includes corporate policies addressing climate change, energy use, waste management, pollution, natural resource conservation, and treatment of animals. It also involves assessing how a company manages its greenhouse gas emissions, toxic waste, and compliance with environmental regulations. Social criteria examine a company's relationships with both internal and external stakeholders. Socially responsible investing (SRI) is a facet of ESG that emphasizes diversity, inclusion, community-focus, social justice, and corporate ethics. It seeks to promote ethical and socially conscious themes, including the fight against racial, gender, and ethnic discrimination. On governance, ESG standards ensure that a company uses accurate and transparent accounting methods, pursues integrity and diversity in selecting its leadership, and is accountable to shareholders. Companies adhering to ESG governance standards are expected to avoid conflicts of interest in their choice of board members and senior executives, abstain from using political contributions for preferential treatment, and engage in legal conduct. The concept of ESG has been around for a while. In the 1980s, organizations in the United States began considering how to use regulation to manage or reduce pollution and improve labor and safety standards. The movement evolved into Corporate Sustainability in the 1990s, as some companies wanted to reduce their environmental impact beyond legal mandates. It then evolved to Corporate Social Responsibility (CSR) which integrated social issues into the sustainability framework in the early 2000s. However, it was only in the late 2010s and the 2020s that ESG emerged as a proactive, rather than reactive, movement. The ESG landscape in Kenya is still in its nascent stages. However, there have been significant developments. In November 2021, the Nairobi Securities Exchange (NSE) issued the ESG Guidance Manual in response to investor demand for comprehensive ESG disclosures and reporting. This manual aims to standardize ESG disclosures and reporting by entities listed on the NSE, encouraging sustainability integration into businesses. Furthermore, discussions are underway between the NSE and the Capital Markets Authority (CMA) about launching an ESG index in the future. ESG indices are designed to support common approaches to ESG investing and help investors benchmark ESG investment performance. The Central Bank of Kenya (CBK) issued guidance on climate-related risk management in 2021. It directed financial institutions to integrate climate-related management into their business decisions and activities, giving them until June 2022 to provide a plan for implementation. NSE has a training program on ESG disclosures for investors. At the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP26) in 2021, Kenya made several commitments to environmental sustainability, including ending deforestation by 2030 and achieving 100 percent renewable energy by 2030. These initiatives align with the global net-zero emission target. Corporate Governance Practices by Publicly Traded Companies, set by the CMA, require boards to implement policies that assure diversity, including female diversity in their composition. The NSE has also set a goal for listed businesses to have at least a third of board members who are female. While Kenya's ESG landscape is still evolving, it is clear that sustainability and responsible business practices are gaining importance in the country's capital markets. ESG reporting remains largely voluntary and inconsistent. There is no universal reporting standard, and companies can choose from a variety of metrics and third-party disclosure frameworks such as the Global Reporting Initiative (GRI) and the Sustainability Accounting Standards Board (SASB). This variability can make ESG reporting confusing and costly for many companies. ESG is transforming the way organizations operate and investors make decisions. It provides a comprehensive framework to assess a company's environmental, social, and governance practices. As ESG continues to grow in significance, the financial sector in Kenya and around the world must adapt to meet the demands of stakeholders who are increasingly interested in sustainability and ethical business practices.