Kuwait Finance House (KFH) had a remarkable year in 2023, achieving unprecedented milestones in the field of sustainability. This was exemplified by the introduction of pioneering programs and creative initiatives, setting new standards within the banking sector of Kuwait.

The sustainability strategy of KFH is founded upon its rich heritage in sustainable Islamic finance, its position as the foremost banking institution in Kuwait, the second largest Islamic financial entity globally, and its vast network spanning nearly all continents.

In 2023, the Bank prioritized an inclusive and diversified sustainability strategy to meet the expectations of stakeholders and market demands. It ensured that its adherence to sustainability ideals aligned with both international standards and the sustainable development goals.

Mohammad Alarbeed, KFH Executive Manager Governance and Sustainability, stated that KFH has been dedicated to sustainability and the promotion of green financing products at both individual and corporate levels, in accordance with socially responsible investment practices. Additionally, it integrated sustainability into its transactions by introducing smart cards made from 85.5% recycled plastics to align with international environmental sustainability standards.

Alarbeed highlighted the significance of the sustainability strategy as it serves as a way to improve profitability and growth, enhance performance efficiency, adapt to market trends and evolving customer demands, and reinforce KFH’s standing as distinguished worldwide Islamic financial institution.

Keep it Green

KFH continued its strategic collaborations with various government and private organizations under the “Keep it Green” initiative, which aims to combine sustainability efforts and abide by governance and environmental standards. The bank extended its strategic partnerships with governmental and private entities. It also supported and took part in numerous environmental activities, such as partnering with the Scientific Center to cultivate coral reefs on Qaruh Island. Moreover, KFH engaged in initiatives focused on environmental protection, including beach clean-ups and afforestation projects in collaboration with the Public Authority of Agriculture Affairs and Fish Resources. A campaign was also launched under “Keep it Green” initiative on recycling plastic bottles.

KFH also took part in the Climate Change Hackathon arranged by Gulf University for Science and Technology (GUST) to address worldwide issues concerning climate change, as well as significant subjects pertaining to environmental consequences, sustainability, and environment preservation efforts.

Empowering national talents

KFH’s sustainability endeavours are not limited to environmental initiatives. The bank invested in young cadre through its Forssah program, which aims to empower and nurture young talents. The bank has also taken steps to enhance financial inclusivity in its services and support women’s empowerment. As a result, KFH achieved a remarkable progress in creating a thriving environment across various departments. This was accomplished through the signing of the Women’s Empowerment Principles agreement (WEPs) with the United Nations Development Programme (UNDP).

Meanwhile, KFH and the United Nations Development Program (UNDP) signed a Memorandum of Understanding (MoU) to exchange experiences in sustainability. This collaboration kicked off with a training program for KFH’s executive management, aimed at enhancing sustainability skills and promoting awareness within the organization. The UNDP offers technical assistance to support investments in line with the Sustainable Development Goals (SDG’s), utilizing important resources such as SDG’s, their impact criteria, and the Green Sukuk Framework.

In reference to this matter, Alarbeed stressed that KFH is actively progressing in its green financing endeavours by offering both financial and technical benefits to projects that take environmental factors and carbon reduction into consideration.

Financial inclusion

Alarbeed emphasized that KFH’s focus on sustainability is reflected in its digital transformation strategy, encompassing the utilization of AI, collaboration with FinTech companies, and enhancing their flexible smart systems and programs to provide customers with a seamless banking experience.

KFH launched several digital services in 2023 to promote sustainability. These included Tam digital bank, the first Shariah-compliant digital bank in Kuwait. It moreover introduced the Zaheb digital platform for merchants and owners of medium and small enterprises, as well as new services in e-payments, opening accounts, issuing cards with distinguished benefits, and enhancing device performance such as instant card printing, gold buying and selling, and branch-free transactions. Another notable achievement for KFH was introducing Mobile D-POS device for instant bank account opening as the first bank in Kuwait.

KFH customers demonstrated the sustainability of digital efforts by conducting approximately 152 million digital banking transactions through KFHonline on mobile and website by the end of Q3 2023. This represents a growth rate of approximately 40% compared to the same period in the previous year.

Attending to People with Special Needs

On another front, KFH launched, in collaboration with the Kuwait Society for the Handicapped (KSH), the third program edition to train a group of students with special needs.  Three years ago, KFH pioneered this initiative in the banking sector in Kuwait. The program aims to facilitate the integration of students with special needs into society by providing them with opportunities to learn new skills and gain experience through direct interactions with employees and customers.

The program is part of KFH’s sustainability efforts to include people with special needs in financial services and provide them with job opportunities that suit their capabilities.

Green Finance

KFH launched a personal financing campaign named “Sustainable Financing of Green Products” especially tailored to citizens in possession of private housing. This campaign aims to fulfil all the requirements of customers who wish to build their house using environmentally friendly and sustainable green products. This campaign contributes to the preservation of natural resources, energy conservation, and the adoption of renewable energy.

These initiatives align with KFH’s commitment to leading sustainable financial transactions to promote sustainability elements and a healthy environment, Alarbeed explained.

Strategic partnerships

The “Fun with Weaving” program, organized by KFH and in collaboration with Sadu House, was designed for children of “Baiti” account customers. Its main objective is to urge children to be environmentally conscious and work with completely recycled materials as part of the “Keep it Green” initiative. In addition, KFH has recently announced a strategic partnership with the Scientific Center, a subsidiary of Kuwait Foundation for the Advancement of Science (KFAS)’s. This partnership aims to encourage cooperation in the area of environmental preservation and sustainability through various methods.

Environmental participations

KFH voluntary team joined forces with the “Plant and Protect it” team to plant fungal and other plants in Al-Leyah Reserve at the Kuwait Institute for Scientific Research (KISR). The main goals of this collaboration were to raise awareness about the environment and protect it. Also, KFH partnered with Kuwait University in the Green Entrepreneurship Challenge, which aims to promote environmentally friendly businesses.

KFH continued supporting the graduation projects of students from the College of Engineering and Petroleum at Kuwait University during the Engineering Design Exhibition. Moreover, it introduced the “Environmental Sustainability” award to recognize the best engineering projects that focus on the environment and sustainability. This award is part of a larger series of initiatives dedicated to promoting sustainability as part of the integrated sustainability strategy and the “Keep it Green” campaign.

COP28

KFH took an active part in the COP28 Summit of the United Nations Framework Convention on Climate Change, which was recently held in the United Arab Emirates and attracted around 70,000 participants from 198 countries.

Alarbeed highlighted that KFH’s involvement in the Green Zone is in line with its dedication to support sustainability initiatives, address the consequences of climate change, and boost the role of green finance in achieving sustainability goals.

This participation involved collaboration with the UNDP in organizing a series of talks aimed to facilitating discussions and collaborative efforts pertaining to climate change, sustainable development, and environmental preservation. These talks highlighted the involvement of the private sector and green finance in supporting the UN agenda 2030, as well as the contributions of Islamic finance principles towards global sustainability objectives.

International awards

KFH achieved notable success in its sustainability endeavours in 2023, earning several prestigious awards. Notably Euromoney granted KFH the “Best Islamic Bank for ESG- global category” award for the year 2023. This serves as a testament to the bank’s unwavering commitment to ESG practices across its entire range of banking activities.

In addition, KFH was honoured with the “Sustainability” award in the Middle East from EMEA Finance magazine and was named as Kuwait`s best bank for sustainable finance by “Global Finance”.

According to Alarbeed, these recognitions by specialized global magazines and international standards and frameworks of sustainability undoubtedly demonstrate the triumph of the bank’s investment and support in promoting the concept of sustainability both internally and externally.

KFH Sustainability Strategy

KFH is dedicated to delivering top-notch banking products and excellent service, in addition to generating favourable outcomes for all stakeholders. The organization acknowledges the importance of fulfilling the increasing demand of stakeholders while also responsibly managing and optimizing natural resources in its services, products, and processes, as well as adhering to the principles of Islamic Sharia, advances in banking services, risk management and capitalizing on opportunities. The Bank’s sustainability strategy encompasses more than 62 targets related to economic, environmental, social and governance aspects. These include:

Economic Dimension: Global Islamic Financial Leadership.

Social Dimension: Positive Impact to all stakeholders.

Environmental Dimension: Green Products and Operations.

Governance Dimension: Sharia compliant Governance Structure.

The Strategy objectives are mapped at the implementation level to address and advance the required practices through financial statements, customers, internal processes, and people & organizational capacities.