The beginning of the year is a season of strategy. Boardrooms are busy approving budgets, refining targets, and aligning teams around priorities that will drive performance. Finance, operations, marketing, and human resources all make their case for investment. Climate action must now be treated the same way.
For too long, climate considerations have been parked under corporate social responsibility or glossy sustainability reports. That approach is no longer tenable. Climate action is no longer a “nice to have”. It is a business necessity.
Public policy is making this clear. In a landmark move last year, the Central Bank of Kenya (CBK) launched the Kenya Green Finance Taxonomy alongside the Climate Risk Disclosure Framework.
This signalled a decisive shift in how climate issues are viewed in the financial system. Climate risk is now formally recognised as a material financial risk that must be identified, assessed, and disclosed with the same seriousness as credit, liquidity, or operational risk.
For companies, the implications are immediate. As banks and financial institutions align with the CBK framework, scrutiny will increasingly extend to businesses seeking financing.
Firms will be expected to demonstrate how climate risks affect their operations and how they are managing them. Those without credible climate strategies may find access to capital more constrained or more expensive.
Those that can align with the Green Finance Taxonomy will be better positioned to attract sustainable finance and investment.
The business case goes beyond compliance. Climate risk is already disrupting supply chains, damaging infrastructure, increasing insurance costs, and affecting worker productivity.
Floods, droughts, and heat stress translate directly into higher costs and lower revenues. Ignoring these realities in corporate planning is equivalent to neglecting market volatility or regulatory change.
There is also a strong opportunity story. The Kenya Green Finance Taxonomy provides clarity on what qualifies as green and transition activities, opening pathways to new products, services, and financing options.
Investments in energy efficiency, renewable energy, sustainable sourcing, circular economy models, and nature-based solutions reduce operating costs while creating long-term value.
Regulation will continue to tighten, not loosen. Companies that integrate climate action early can spread costs over time, strengthen governance systems, and avoid abrupt compliance shocks. Those who delay risk being forced into reactive and costly adjustments.
Talent, reputation, and competitiveness are also at stake. Employees, customers, and partners increasingly favour organisations that demonstrate credible climate leadership. A strong climate strategy strengthens brand value and helps attract and retain skilled professionals.
As companies plan for the year ahead, the question is no longer whether climate action belongs on the agenda. The question is whether it is being treated with the same discipline, investment, and accountability as every other core business function. Climate action is now a business case that companies can no longer afford to ignore.
