Kuwait Finance House (KFH) has been awarded an "A" rating by MSCI for its exemplary performance in environmental, social, and governance (ESG) practices. This prestigious rating underscores KFH's commitment to sustainable finance and its leadership in integrating ESG principles into its operations and strategic initiatives.

KFH Acting Group Chief Executive Officer, Abdulwahab Iesa Al Rushood, emphasized that KFH’s rating on the MSCI ESG Index was upgraded from BBB to A, making it the highest rating to be received among Kuwaiti banks.

Al Rushood added in a press statement that the "A" rating is attributed to the remarkable progress made by the Bank in advancing the implementation of sustainability standards and contributing to achieving sustainable development goals (SDGs). The rating also reflects the success of efforts made in executing sustainable initiatives across the Bank’s operational, financial, administrative, social, and environmental activities.

Rating Criteria

Al Rushood said that the MSCI ESG Index evaluated KFH across a number of criteria, the first and most important is having a solid and effective governance framework. KFH is the first bank to have formed a committee as part of the Board of Directors specifically for governance and sustainability. KFH is also the first bank to have designed an integrated sustainability strategy covering the four pillars of economy, environment, society, and governance, aligning them with the sustainable development goals (SDGs). In addition, KFH is the first bank to have established a department assigned to monitoring sustainability; promoting green finance products; managing talent; and promoting financial inclusion, commitment to responsible banking operations, optimal resource utilization, leading community initiatives that serve all segments of society, and contributing to the environment through initiatives aimed at reducing greenhouse gas emissions that lead to climate change.

He highlighted the significance of KFH being rated on global sustainability indices, as investors use ESG ratings as effective tools to identify investment opportunities in companies that abide by sustainability standards, which in turn contribute to reducing risks in their investment portfolios.

Global Ratings

Al Rushood added that the “A” rating of the MSCI ESG Index is one of many global achievements that KFH has made in sustainability. The Bank was rated on the global sustainability index, FTSE4Good Index Series, and received a high 24.7 rating – the highest among Kuwaiti banks - for sustainability risks (ESG Risks) on the Sustainalytics index.

KFH was also awarded internationally with Kuwait’s Best Bank for Sustainable Finance Award by Global Finance magazine, Kuwait's Best Bank for ESG by Euromoney, and Corporate Social Responsibility – Middle East Award from EMEA Finance, in addition to many other awards. Furthermore, the KFH Auto Showroom received the Global Sustainability Assessment System GSAS – Gold Level Certificate, first-of-its-kind in Kuwait.

Most prominent initiatives implemented by KFH in the field of sustainability:

• Promoting financial inclusion through quality digital services and geographical expansion in 12 countries.
• Issuing its sustainability reports periodically, and issuing its carbon footprint report, the first-of-its-kind among Kuwaiti banks.
• Offering a green finance product to finance housing and consumer products. This contributes to preserving natural resources and reducing energy consumption.
• Issuing green Sukuk and aiming at increasing investment in green finance looking ahead.  
• Launching the “Keep It Green” campaign, which focuses on initiatives that aim for environmental protection.
• 50% of KFH banking cards issued in 2023 were made from recycled materials.
• Signing a memorandum of understanding (MoU) with the United Nations Development Program (UNDP) to further enhance KFH’s commitment to the United Nations Sustainable Development Goals (SDGs), noting that KFH is the first bank in the region to have signed such a memorandum.
• Women empowerment, having been the first Islamic bank in Kuwait to sign the Women's Empowerment Principles agreement with the United Nations Development Programme (UNDP), as well as having women hold leadership positions in the Bank.
• Building the largest KFH Auto Showroom in the Middle East, with the building being certified as environmentally friendly.
• Participating in various initiatives with the UNDP and signed the Global Takaful Alliance Agreement with UNDP with the aim of providing Takaful insurance to 100 million farmers worldwide.
• Training its human capital at all job levels in programs designed in cooperation with the UNDP and other leading international academic institutions.

MSCI Index

The MSCI ESG Index is the largest provider of environmental, social and governance (ESG) ratings in the world.

The MSCI ESG Index ratings are designed to measure companies’ ability to address long-term sustainability risks, with a data-based assessment methodology covering environmental, social and governance standards, and various other factors such as carbon footprint, talent management, corporate governance and product quality.