MANAGEMENT APPROACH

The Bank’s environmental management framework clearly sets out the scope and key elements it focuses on when managing its impacts on the environment. We strive to maintain and enhance our natural capital by managing resources efficiently, lending towards green technologies, reducing dependence on fossil fuels and eliminating waste by reusing or recycling whenever possible.

Implications of Climate Change

As an organization with exposure to a wide range of industry sectors, the Bank is inherently vulnerable to climate related risks. In recent years Sri Lanka’s agriculture sector has been adversely affected by erratic weather conditions including prolonged droughts, floods and an overall increase in temperate levels. These factors unfavourably impacted the entire agricultural value chain, and banks with significant exposure to the sector are likely to see some repayment pressures. While we are yet to quantify the impact, such issues could have on our operations, we are cognizant of the potential deteriorations in portfolio quality which could stem from the implications of climate change.

Responsible Banking

The Bank strongly believes that it can contribute significantly to environmental sustainability through its lending decisions. In 2017, we placed strategic emphasis on lending towards the renewable energy sectoran industry which will allow us to fulfil our commercial and environmental sustainability objectives. Accordingly, we provided funding for four types of renewable energy projectshydro, solar, waste to energy and bio mass which has been estimated to eliminate 390,000 tonnes of CO2 emissions, roughly equal to the emissions of 83,000 passenger vehicles. We have also offered concessionary funding for environmentally sustainable initiatives such as effluent treatment facilities and small scale solar power projects and approved a term loan facility for one of the country’s first ever waste to energy projects.

The Bank applies the precautionary principle when disbursing loans and developing new products. Due consideration is also given to environmental compliance and impacts when carrying out lending appraisals in accordance with a comprehensive Environmental and Social Management System (ESMS). For instance, we ensure that potential customers (particularly in the SME, corporate and PFI sectors) have obtained the requisite Central Environmental Authority (CEA) approval and that environmental impacts are measured and mitigated. Accordingly, funding is only extended to businesses and projects that are built and conducted in an environmentally responsible manner.

Energy

The Bank’s energy requirements are fulfilled entirely by the national grid and organization-wide initiatives are in place to ensure that energy consumption is tracked and minimized. Energy efficient lighting and cooling solutions have been installed wherever possible and employees are encouraged to partner the Bank’s energy management objectives by acting responsibly. The Bank's energy consumption in 2017 is given below;

Paper Consumption and Recycling

As a service organization, our key material input is paper and organization-wide efforts are in place to minimize the use of paper and encourage re-use and recycling. Employees are encouraged to use electronic platforms for communication, thereby minimizing the need to print. During the year we used 49,493 kg of paper. We have also partnered with a CEA-approved third party to recycle the waste paper that is generated from our operations. In 2017, the Bank shredded and recycled 14,721 kg of paper, which translated to an estimated saving of 14,721 kg of GHG emissions.

We also encourage customers to pursue paperless banking by adopting digital platforms available to them for transacting with the Bank. This includes migration to e-mail statements, use of electronic payment cards, mobile banking and online banking. In 2017, our mobile banking subscribers increased by 96% while over 28,000 customers migrated to e-statements.

Carbon Footprint

Our efforts at enhancing the energy efficiency of our operations and are reflected in our carbon footprint. The Bank’s total carbon footprint amounted to 2624.4 million MT of CO2 equivalents during the year under review. Purchased electricity is the largest source of GHG emissions for the Bank.

We compute our green house gas emissions (GHG) using the most recent version of the WBCSD/WRI Greenhouse Gas Protocol Accounting and Reporting Standard (2004) and calculation tools (2015). The boundary of the computation is limited to the Bank and its core operations. Reporting under Scope 3 (which is optional) is limited to sources that are material and measurable.