Directors affiliated with KTDA-run factories are set to benefit from capacity building and training on Environmental Social and Governance initiatives under a partnership between the Co-operative Bank and green financing fund Eco.business Fund.
Under the partnership, KDTA Holding will utilize support from the two institutions to enable it to implement its Environmental Social and Governance (ESG) initiative aimed at strengthening the resilience of the smallholder tea value chain.
Develop Economic Resilience
KTDA’s ESG initiative are aimed at enabling smallholder tea farmers and factories to develop economic resilience while adopting sustainable and environmentally friendly practices that will enable the sector to combat the diverse effects and challenges posed by climate change.
KTDA plays an important role in improving the livelihoods of tea communities by promoting sustainable growth and prosperity for the smallholder tea sector with a direct and indirect impact on the markets and communities where it operates.
The key objective of the partnership is to build capacity for tea sector players especially the leadership through sector-related ESG pillars and ensure that the sector continues to support the socio-economic needs of the more than 700,000 smallholder tea farmers under KTDA management.
The initiative targets over 400 Board Members, Independent Directors, Factory Directors, and senior leadership at all levels.
“Co-op Bank implemented an ESG roadmap in 2022 which integrated ESG imperatives in all its operations. As such, this partnership is one of many strategic initiatives that the bank is involved in providing capacity building and technical support to the farmers,” said Co-Op Bank Group Managing Director & CEO Dr. Gideon Muriuki.
Co-operative Bank became the first Kenyan financial institution to secure funding from the Eco.business Fund in 2021 when it secured an investment of $10 million as a subordinated loan for onward lending to sustainable agribusinesses.
“Eco.business Fund Development Facility, in collaboration with KTDA and Cooperative Bank, co-sponsored this insightful event for the KTDA board and senior management, shedding light on crucial environmental and social issues in Kenya’s smallholder tea production,’’ said Hector Gomez Ang, Fund Director of eco.business Fund advised by Finance in Motion GmbH.
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‘‘We need to address challenges like climate change, biodiversity, and their impact on livelihoods by exploring the potential for innovative adaptation solutions.
Our partnership helps pave the way for sustainable growth in the tea industry by enabling the tea sector to harness modern factory equipment to extract valuable tea derivatives for pharmaceutical use and exploring the creation of alternative tea-based beverages like iced teas and tea wine.” He added.
Direct Impact on Tea Production
KTDA Holdings has tasked the Climate Action Committee of its board and Foundation to lead and implement this joint program touching on the 12 KTDA Zones with 71 factories in operation.
“Matters related to climate change can no longer be ignored as they have an impact on tea production which is rain-fed.
Variations in weather have a direct impact on tea production, the only way to ensure farmers have a sustained tea business is by implementing actions that mitigate the adverse effects of climate change,” said , KTDA Group Chief Executive, Wilson Muthaura at the just concluded governance and ESG training for KTDA board and senior management.
The KTDA Foundation plans to roll out climate action activities geared towards greening the smallholder tea value chain and enhancing the adaptive capacity of the sector which is a key GDP driver of the Kenyan economic prosperity.
The eco.business was initiated in 2014 by KfW Development Bank, Conservation International and impact asset manager, Finance in Motion, with financial support from the German Federal Ministry for Economic Cooperation and Development (BMZ).
Finance in Motion has served as Fund Advisor since the inception of the fund.
The eco.business Fund provides dedicated financing and technical assistance to local financial institutions and businesses that are committed to implementing sustainable practices in unique ecological landscapes both in
Latin America and the Caribbean and in sub-Saharan Africa.
The fund aims to promote business and consumption practices that contribute to biodiversity conservation, to the sustainable use of natural resources and to mitigate climate change and adapt to its impacts.
