The effects of climate change, such as prolonged dry periods and unpredictable rainfall patterns, are no longer distant warnings; they are our daily reality. In East Africa, we understand the urgency of climate action, not as a global abstract, but as a direct threat to our livelihoods and future. Kenya, for instance, has already made a bold commitment to slash its greenhouse gas emissions by 35% by 2035, a target that underscores the gravity of the challenge.

The truth is that if we allow unchecked climate change to continue, its economic consequences will continue to grow. Experts warn that by 2050, Kenya could see its GDP shrink by 2.6% annually, that’s a staggering KShs. 300 billion in losses each year. It’s against this backdrop that frameworks like the Central Bank of Kenya’s Green Finance Taxonomy and Climate Risk Disclosure, as well as Tanzania’s Climate-Related Financial Risks Management and Disclosures framework, emerged, not only as new regulations but also as essential lifelines for our economies. These frameworks compel our financial institutions to align their operations with the very survival of our nations, demanding a new era of transparency, accountability, and innovation.

The Kenya Green Finance Taxonomy brings much-needed clarity by defining what truly qualifies as a “green” investment, whether it’s solar energy that powers homes or climate-smart agriculture that ensures food security. This precision is critical in an era where vague claims have often led to greenwashing, eroding public trust and diverting attention from impactful, sustainable solutions. For developing economies, such ambiguity could stall momentum and undermine confidence in green finance. Equally significant is the Climate Risk Disclosure Framework, which requires banks to report their exposure to climate-related risks openly. This pushes financial institutions to integrate climate considerations into their lending, business strategies, and risk management practices. It’s not just about regulatory compliance; it’s about fostering long-term resilience.

In 2025, the Bank of Tanzania introduced two key regulatory frameworks that require banks to address climate-related financial risks and implement sustainability reporting. These include guidelines for integrating climate risk into governance and risk management systems, conducting stress tests, and ensuring board-level oversight, as well as requirements for disclosing environmental and social risks, sustainability opportunities, and strategic decision-making processes. The aim is to increase transparency, build resilience in the financial sector, and align Tanzania’s banking industry with global sustainability standards. These efforts mirror similar moves in countries like Kenya, positioning Tanzania’s financial institutions to play a key role in financing climate-smart initiatives, managing environmental risks, and supporting long-term sustainable development.

But how does this translate into tangible action? It means our banks are now compelled to channel investments towards a sustainable, low-carbon future. Whether it’s financing renewable energy infrastructure, supporting climate-smart agriculture, or investing in sustainable urban development, the financial sector holds the key to achieving these goals. Our region’s transition to a resilient, sustainable economy hinges on two foundational principles: transparency and inclusivity. These aren’t just regulatory checkboxes; they are the bedrock of a financial system capable of driving equitable growth that reaches every corner of our communities. Strategic investments in renewable energy, for example, promise to stabilise electricity costs and reduce our reliance on unpredictable fossil fuels, benefiting everyone from the largest industrial player to the smallest household.

Our banking sector, however, cannot act alone. Policymakers must create incentives for green investments through smart tax breaks and supportive policies. Customers, too, have a decisive role to play by rewarding ethical banks with their loyalty and demanding genuine commitment to sustainability. And civil society must continue to be the voice that maintains pressure for progress. We must view these frameworks not as a hurdle to compliance but as a powerful catalyst for leadership, demonstrating to the world that East Africa is at the forefront of building a sustainable future.

The journey towards a greener future for Kenya and Tanzania is well underway, and it’s exciting to see our financial institutions stepping up. Increasingly, they are finding ways to help businesses, both large and small, adopt climate-friendly solutions. This shows that our banks are not just about numbers; they’re becoming key partners in building a stronger, more sustainable economy for all of us across the region.

But this enormous task isn’t just for banks. It’s a call to action for everyone. Our governments need to create policies that encourage green investments. As customers, we can choose to support businesses that care for the environment, and community groups must continue to push for progress. By working together, we can ensure that our growth benefits everyone, protects our natural resources, and secures a healthy planet for future generations. The time to build this brighter, greener future is right now.