- This milestone aligns with NBK’s objectives of achieving carbon neutrality by 2060

-It strengthens our capacity to evaluate and address climate-related risks while facilitating the financial system’s transition to a low-carbon economy

-The initiative enhances transparency and solidifies the disclosure of the GHG intensity associated with our portfolio

-The Bank actively contributes to the efforts of global financial institutions to mitigate the impacts of climate change

-We persist in prioritizing international initiatives aimed at reducing the carbon footprint of our financial activities and operations in line with the Paris Agreement

National Bank of Kuwait (NBK) has become the first bank in Kuwait and one of only six banks in the Middle East and North Africa (MENA) region to join the global industry-led partnership, PCAF, for measuring and disclosing the greenhouse gas (GHG) emissions associated with its lending and investment portfolio.

This turning point in the Bank’s sustainability journey reinforces its commitment to responsible banking, aligning with its goal of achieving carbon neutrality by 2060.

The Partnership for Carbon Accounting Financials (PCAF) initiative aims to assist financial institutions in reducing GHG emissions by offering globally harmonized methodologies to measure and disclose greenhouse gases emissions of all asset classes within their loans and investments portfolios. These asset classes include listed equity and corporate bonds, business loans and unlisted equity, project finance, commercial real estate, mortgages, motor vehicle loans, and sovereign debt.

The initiative was globally launched in 2019, with the first bank disclosures on GHG emissions issued in 2018 following its initial launch in Europe in 2015. Currently, the initiative comprises of approximately 480 financial institutions worldwide. These members include commercial banks, development banks, asset owners / managers, insurance companies, and other financial institutions collaborating to mitigate the climate impact associated their financial activities, thereby accelerating the net zero transition.

Commenting on this milestone, Mr. Amir Hanna, Head of Group Investor Relations and Communications at NBK, said: “We are delighted to join PCAF and contribute to the collective efforts of financial institutions around the world to mitigate the impacts of climate change by promoting the adoption of a consistent framework for measuring financed emissions, which is a critical component for accelerating our efforts towards more sustainable practices."

Hanna added that NBK's participation in the PCAF initiative will facilitate the identification, measurement, and disclosure of the emissions associated with its financing activities in a standardized manner, further enhancing comparison with industry peers. This will contribute to informed decision-making based on consistent and comparable data, providing the Bank’s key stakeholders with transparent and reliable metrics to monitor the Bank’s progress in implementing its ESG strategy.

Hanna emphasized that this initiative would assist the Bank with measuring and disclosing the emissions intensity of its portfolio companies, thereby strengthening the Bank’s efforts in supporting clients' endeavors to transition to a low-carbon economy by actively reducing their carbon footprint.

Hanna elaborated on the significance of continuously assessing the emissions intensity of the Bank’s lending and investment portfolio, highlighting its integral role in enterprise risk management. He underscored that PCAF would further strengthen the bank's capacity to evaluate and address climate-related risks and opportunities, facilitating its transition to a lower carbon economy.

Hanna also highlighted that NBK has developed a bank-wide manual in line with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), aimed at guiding the bank into addressing the escalating demands for transparency concerning climate-related risks and opportunities. The bank intends to issue its inaugural TCFD report in 2024, reinforcing its commitment to focusing efforts on catalyzing change and implementing lessons learnt from its experience in order to embed net zero and climate risk management across the Group.

He emphasized NBK's pioneering role and significant progress in advancing sustainable finance. The Bank has introduced its comprehensive Sustainable Financing Framework in 2022, making sustainability a fundamental pillar of its business models, operations, and corporate culture. This aligns with the global transition to a sustainable and low-carbon economy and consistent with Kuwait's development plans. NBK aims to grow its portfolio of sustainable assets to approximately US$10 billion by 2030. The Bank has been proactive in capitalizing on the growing trend towards sustainable finance by offering a range of innovative products and services supporting green initiatives across the Group. These include green mortgages, sustainability-linked loans, consumer loans for electric vehicles, and consumer loans for low-emissions housing.

“As the leading financial institution in Kuwait, we aspire to set a benchmark in every endeavor we undertake, particularly in this pivotal domain that will shape the future for generations to come. Our commitment extends to fostering the pillars of sustainable development not only in Kuwait but also across all our markets,” Hanna said.

He highlighted NBK Group's ESG strategy which adopts a holistic and interrelated four-pillar approach designed to advance sustainable development and promote sustainable finance in the region. Among these pillars, 'Responsible Banking' stands out, defining the bank's commitment to achieving net-zero through its engagement with clients, the diverse range of products and services it offers, as well as its financing choices.

NBK's commits to fully integrating environmental, social, and governance (ESG) standards, not only in its financing activities but across its operations. Over the years, NBK has taken significant strides to support the United Nations Sustainable Development Goals (UN SDGs) by participating in the United Nations Global Compact (UNGC), the largest corporate sustainability initiative in the world for promoting responsible business practices.

Furthermore, for the second consecutive year, the Bank received a score of "C" from the CDP for its Climate Change and Forests 2023 Categories. NBK stands as the only bank in Kuwait to receive a score from CDP, a global non-profit that runs the world’s leading environmental disclosure platform. This ranking positions NBK among the top financial institutions in the GCC, demonstrating its commitment to upholding the highest standards of environmental stewardship.