Kenya Green Finance Taxonomy
Central Bank of Kenya
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Abstract:The Kenya Green Finance Taxonomy outlines the country's strategic approach to aligning its financial sector with national and global climate objectives. Recognizing the urgent threat posed by climate change—especially to vulnerable economies like Kenya’s—the taxonomy serves as a classification tool to identify environmentally sustainable investments and support the transition to a low-carbon, climate-resilient economy. Developed by the Central Bank of Kenya (CBK) with technical assistance from the European Investment Bank (EIB) and support from the International Climate Initiative (IKI) Fund, the taxonomy is benchmarked against international best practices while being tailored to Kenya's socio-economic and environmental priorities. This inaugural edition establishes a common language and framework for defining, monitoring, and disclosing green financial activities. It aims to standardize green finance practices, reduce greenwashing, and enhance transparency and investor confidence. The taxonomy supports Kenya’s updated Nationally Determined Contributions (NDCs) under the Paris Agreement and provides guidance for banks and other financial institutions to integrate climate-related risk into their governance, strategy, and operations. It is expected to unlock sustainable investment opportunities, reduce financial sector risks, and accelerate Kenya’s transition to a green economy.