Effects of corporate sustainability strategy on the financial performance of energy generating companies in Kenya: A case of Kenya electricity generating company limited

Abstract

The effects of fossil fuels use and climate change concerns on the operations of energy companies are real and have long-term implications. Current trends reflect embracement of sustainability driven strategies as powerful business tools. This in turn means that the financial position and performance will be impacted on by the corporate sustainability strategies adopted by the energy firms. The purpose of this study was to assess the financial implications of corporate sustainability strategies on energy generating companies. Kenya Electricity Generating Company Ltd. (KenGen) is the pioneer firm in the development of Clean Development Mechanism processes in Kenya, since the year 2000. In determining the implications of sustainability-driven strategies on the financial performance of the energy utilities, four main objectives were pursued: establishing the drivers of corporate sustainability strategy at KenGen; identifying the extent to which CSS adopted by KenGen have impacted on strategic direction through value creating opportunities, establishing the impact of value creating opportunities on KenGen’s financial performance, and identifying the general influences of Corporate Sustainability Strategy (CSS) on KenGen’s operations. Primary data was augmented with secondary data to reach the conclusions. A mini census was done which achieved a respondent rate of 68.4%. Data was analyzed using measures of central tendency, Pearson and Spearman’s correlation and presented using tables, graphs and pie charts. The study concluded that: in the short-term project costs went up and business risks increased, on the long-term however, Kengen was able to benefit from service diversification, access to lower cost of capital and access global carbon markets.

Description

Thesis

Keywords

Energy generating companies, Financial performance, Kenya electricity generating company

Citation

Miller Nyakeri Akuma (2012)Effects of corporate sustainability strategy on the financial performance of energy generating companies in Kenya: A case of Kenya electricity generating company limited: Daystar University school of Business and Economics: Thesis