Introduction
A study published by Mnakh for Studies and Researches has found that Kuwait's banking sector recorded a sharp decline in sustainability activities during March 2026, directly impacted by geopolitical developments in the region — despite having posted a strong performance across the first quarter as a whole.
The study noted that the escalation of regional tensions in March disrupted a significant portion of the business environment, with a visible effect on the pace of sustainability activities — particularly community and field-based initiatives that depend on direct public engagement.
According to the analysis, nine banks listed on Boursa Kuwait collectively carried out 127 ESG activities across Environmental, Social, and Governance pillars between January and March 2026. Activity gained strong momentum at the start of the year, rising from 37 initiatives in January to 65 in February, before falling sharply to just 25 in March — a decline of 62%.
Social Activities
Social initiatives accounted for the largest share of total activities at approximately 67%, driven by financial literacy programmes, investment in education, and human capital development. Employee training hours exceeded 147,000, while community investments reached approximately KWD 29 million. National Bank of Kuwait led this pillar with 25 initiatives in Q1, reflecting a clear institutional focus on programmes with direct community impact.
The March decline was not uniform — social activities fell 72%, while governance dropped just 27%, reflecting the gap between discretionary and regulatory ESG.
Governance activities represented around 27% of the total, covering regulatory compliance, board appointments, and cybersecurity enhancements. These activities maintained relative stability even during the March decline, reflecting their mandatory nature and direct link to supervisory requirements.
The Environmental Gap
On the environmental front, the study identified a pronounced performance gap. Environmental activities accounted for just 6% of total initiatives — eight activities across the entire quarter — the majority of which were carried out by Kuwait Finance House. The remaining banks recorded minimal environmental engagement, pointing to limited adoption of environmental strategies across the banking sector.
Mnakh noted that the March decline did not fall evenly across pillars. Social activities dropped 72%, while governance activities fell just 27%. Environmental activity, already critically low, saw only marginal additional impact from the crisis — underscoring that this gap is structural rather than situational.
The study also highlighted the concentration of activity among a small number of institutions. Three banks — National Bank of Kuwait, Kuwait Finance House, and Gulf Bank — accounted for approximately 66% of all sector activity, while some banks recorded comparatively low levels of engagement, raising questions about the depth of sustainability culture across the sector as a whole.
In this context, the study found that Kuwait's banking sector remains at an early stage with respect to environmental sustainability. No clear evidence emerged in Q1 of green finance adoption, financed emissions measurement, or concrete net-zero transition strategies — in contrast with more advanced international practice in this area.
Outlook
Mnakh for Studies and Researches stated that the Q1 findings reflect a clear gap between progress on social and governance pillars on one hand, and the persistent lag on environmental performance on the other — one that will require the development of more comprehensive strategies aligned with international standards and investor expectations.
Q2 2026 data will determine whether March was a temporary disruption or a sign that sustainability remains a secondary priority in times of crisis.
The company added that Q2 2026 data will be critical in determining whether the March contraction represents a temporary, geopolitically driven disruption, or a structural pattern in which sustainability becomes a secondary priority during periods of stress.
Methodology
The study analysed all publicly disclosed ESG activities by nine banks listed on Boursa Kuwait's banking sector between 1 January and 31 March 2026. Activities were classified into Environmental (E), Social (S), and Governance (G) pillars based on primary impact, and validated through press releases, official company reports, regulatory filings, and media coverage. The analysis is limited to publicly disclosed activities and does not include internal initiatives without public communication.
Banks monitored: National Bank of Kuwait, Kuwait Finance House, Gulf Bank, Boubyan Bank, Burgan Bank, Warba Bank, Al Ahli Bank of Kuwait, Commercial Bank of Kuwait, Kuwait International Bank.
