Sri Lanka Banks' Association, as umbrella body that brings all Sri Lankans banks together, stands ready to support all stakeholders on this common vision through the Sustainable Banking Initiative.
I wish to invite banks who are not yet members of this initiative to become signatories and make use of the support that this initiative affords.
Banks play a critical role in a country’s development as financiers and facilitators of economic activities, and the impact of their contribution greatly hinges on the quality of the decisions they make. Whilst economic viability is important, we also need to be cognisant of the impact of their decision making on our stock of human, social and environmental capital, which are critical to our economic wellbeing both now and in the future.
Today, a growing number of financial institutions worldwide are adopting policies, systems, and lending practices that reduce the environmental and social impact of doing business. Accordingly, various countries have adopted unique routes in response to each country’s local context and priorities, which can be broadly categorised into two main approaches.
1) Firstly, financial or banking regulators have taken the lead through policy-based initiatives to sustainable finance in countries such as Bangladesh, Brazil, China, Indonesia, Morocco, Nigeria, Peru and Vietnam; and
2) Secondly, voluntary, industry-led initiatives have been implemented in countries such as Colombia, Ecuador, Kenya, Mexico, Mongolia, South Africa and Turkey.
Whilst Sri Lanka has yet to adopt any regulatory tools for the purpose of promoting sustainable finance, the Sri Lankan Central Bank is in the process of evaluating the need to introduce such tools for promoting this endeavour and has since developed a sustainability road map.
Some of the tools available to a regulator in developing a sustainable finance framework are:
(from the Speech given by Mr. A A M Thassim, Director, Bank Supervision, Central Bank of Sri Lanka at the Kick Off Meeting, August 2017)
As such, Sri Lanka is in a unique position where both [voluntary and regulatory] approaches are being pursued, with 18 banks already adopting 11 voluntary principles, under the leadership of the SLBA and the Central Bank collaborating with Sustainable Banking Network (SBN) to develop a sustainability road map.
In this context, the SL-SBI aims to play its part by providing a platform for:
By so doing the SL-SBI provides an important space to overcome some of the following challenges that the Director, Bank Supervision, Central Bank of Sri Lanka indicated could be faced when implementing a more sustainable finance agenda across the banking sector. Such as:
Through participation in the SL-SBI individual Banks, their employees, and the sector will benefit from;