As Sri Lanka emerges from a severe financial crisis, there is growing emphasis on recovery efforts that are environmentally sustainable and socially inclusive. The financial sector plays a pivotal role in this transformation, driving green financing initiatives and advancing gender equity through tailored financial solutions for women entrepreneurs. This episode explores how sustainable finance is building climate resilience and fostering greater economic participation, particularly for women, as Sri Lanka charts a path toward a more inclusive and sustainable future.
Transcript
The Green and Equal South Asia podcast powered by ACSIIS, a partnership between the European Union and the International Finance Corporation.
Shalaka Joshi: Hello, and welcome to the third episode of Green Equal South Asia. I'm your host Shalaka Joshi, leading the gender and economic inclusion work in South Asia for the International Finance Corporation. Our previous episodes have taken us to India and to the Maldives, exploring everything from electric vehicles to sustainable tourism.
Today I'm coming to you from the island nation of Sri Lanka to discuss the role of banks in tackling climate change and gender equality. In this episode, we will be in discussion with one of Sri Lanka's largest private banks and a long-standing IFC client and partner, the Commercial Bank of Ceylon or CBC.
Having faced the worst economic crisis in its history that almost brought the country to a standstill, resilient recovery is the buzzword on Colombo Streets. But are these recovery efforts socially and environmentally inclusive? Do financial institutions have a role to play in directing this change towards greater equity? Let's dive into the conversation. First up, we have the CEO of Commercial Bank of Ceylon, Sanath Manatunge. Hi, Sanath. Welcome to the podcast.
Sanath Manatunge: Hi Shalaka. Thank you for taking us in for this discussion.
Shalaka: Pleased to have you here. We're also joined by IFC’s Senior Operations Officer, Meetu Singh. Thanks so much for joining us. Welcome to Green and Equal.
Meetu Singh: Hi Shalaka and thank you so much for having me.
Shalaka: Let's jump into it. In line with the Paris Agreement, Sri Lanka has pledged to reduce GHG emissions by 14.5 percent by 2030, and to achieve carbon neutrality by 2050. However, Sri Lanka requires a significant push from the financial sector to move the market towards these targets. Sanath, how does CBC plan to align its lending and investment activities with the goals of the Paris Agreement?
Sanath: Yes, Shalaka. If I go back in history, Commercial Bank collaborated with IFC in 2017, in developing [a] green financing strategy, which is crucial as a bank to contribute towards carbon neutrality and play our role as a lender. Due to the importance of green financing, the bank decided to add green financing as a core strategy in our corporate plan and thereafter, [the] bank developed the green financing taxonomy by aligning with the IFC Green Financing Strategy and adopted this, six years back. We use the CAFI tool that is the Climate Assessment for Financial Institution tool introduced by IFC to calculate and quantify the climate impact of our green lending portfolio. This I would say enabled us to quantify the impact of our green financing portfolio and monitor the trends so we can lead through quantification.
I'm happy to mention that our bank was able to achieve carbon neutral status in year 2020. Incidentally, that was the year we celebrated our 100 years. And I am happy to note that we have the largest green financing portfolio of 25 billion to date, and we have another about five billion in pipeline. This will enable us to surpass $100 million mark in sustainable financing - green financing this year. We have a green financing vision which is clearly articulated in the sustainability vision itself, to be a responsible financial service provider by enabling and empowering our stakeholders towards environmentally responsible, socially inclusive, and economically enriching growth.
Shalaka: Wow, that is phenomenal progress already, Sanath. So thank you for sharing those numbers and some ambitious targets in addition to it. So congratulations - I would say to you and to CBC on aligning so strongly towards green financing.
The World Bank notes that climate disaster events could cause a potential 7.7 percent GDP decline in Sri Lanka by 2050. So we had an IFC analysis called Climate Investment Opportunities in South Asia, where we estimated that the climate investment potential in Sri Lanka could be as much as $18 billion from 2018 to 2030. But the market is still nascent and the financial sector's participation - relative to the needs of the economy, is still low.
So Meetu, I'm coming to you next - to ask you to tell us a little bit about, what is the role that IFC plays, in supporting the country’s financial sectors’ climate transition needs?
Meetu: Well, Shalaka over the years IFC has been playing a pretty significant role in the country, promoting sustainable and green finance. Including support in developing the first national green finance taxonomy that Sanath also alluded to.
IFC, along with support from the European Union has developed a program to support financial institutions in scaling up green finance, building capacity and also managing climate risk. This partnership with the EU which falls under the EU's regional initiative ACSIIS will actually help financial institutions in Sri Lanka, including Commercial Bank, to set the foundations for net zero transition. And actually, this project with Commercial Bank is going to be the first of its kind being done by IFC in South Asia.
With the technical support being provided by IFC, Commercial Bank aims to develop a climate transition plan towards achieving net zero status. So what IFC will do is, we will help Commercial Bank scale up further in its green finance portfolio. Help build capacity of the banks staff on specialized areas - like climate risk management.
And then also work in the financial sector to build capacity amongst other banks in the country. By scaling up the green finance portfolio Commercial Bank will actively set an example for other financial institutions, signaling the importance of prioritizing some of these climate-resilient investments. And we're hoping that with this work, we'll be able to help accelerate the move of the country towards achieving a net zero status, which is a defined goal by the Government.
Shalaka: Wonderful. Thanks, Meetu. And it's great also to hear that our partners for this podcast ACSIIS are having such a great impact in Sri Lanka and to hear how you're bringing together I think various collaboratives towards this initiative.
Sanath, I understand that this initiative is still in its early days, but I'm sure our listeners would love to know about any specific strategies that you are planning to implement to become a market leader in green and blue finance?
Sanath: Yes Shalaka, actually our approach for sustainability is comprehensive and inclusive. We adhere to a meticulously crafted sustainability strategy, serving as the blueprint for our organizational ethos - in this space. This strategy revolves around the three key pillars. First, is sustainable banking, second responsible organization, then community impact.
To become the market leader, we provide more capacity building programs for the staff members to enhance their understanding on green and blue financing and transform the lending philosophy and the culture and how they think. And we also have realized that internal and external capacity building in this phase is very important. In this we offer many customer awareness sessions, by providing knowledge on green financing - why they should embark on these journeys, then green financing opportunities in lending, and also marketing our green products to them, introducing green financing for different market segments to encourage them to borrow, [and] engage with us - by way of innovative products, is another strategy we adapt to be a leader in this space.
Shalaka: Thank you so much. And it's so interesting to hear the frame on inclusive lending and changing how everyone [at] CBC thinks about lending, in a more sustainable way. Before we head to our next segment, which is on CBC's work around creating greater access to finance for women, I'm going to ask Meetu to share with us the impact of IFC's gender focused finance solutions.
Meetu: Oh sure, Shalaka. You know, IFC has been very active over the past years in supporting our client financial institutions in various gender focused propositions. Helping them build women tailored solutions and bring them out to market. And our advisory support has been around a bunch of areas: market research, helping them design their business models, product development, sales process enhancement. And it’s also training and capacity building for women led small and medium business enterprises. Something that's actually very needed in this country. And, as a result of a lot of the work, [a] number of our clients now actually have women focused and tailored banking solutions out in the market. All of which has helped them grow their loan book and be able to extend financing to more women and women led businesses.
In fact, last year in Sri Lanka, IFC worked with Commercial Bank on another new initiative -to support women SMEs in the market. We've launched an ecosystem platform for again SMEs to help create digital stores, as well as being able to engage and transact on an ecosystem platform. Kind of like a digital marketplace. And you can imagine this as a cross between Facebook and LinkedIn for SMEs. This was just launched last year - and within that one year, we have nearly 1000 women led SMES who joined the platform. And quite a few of them have digital stores that have been created. Which again helps them to sell to customers beyond just their neighborhoods and localities.
Shalaka: Meetu, thank you so much for joining us and for giving us the perfect segue for our next segment where we will be talking about CBC's gender inclusion agenda, both for customers and for their employees. Really enjoyed having you as part of this discussion.
Meetu: It was my pleasure, Shalaka.
The Green and Equal South Asia podcast powered by ACSIIS. A partnership between the European Union and IFC.
Anuradha Saparamadhu: Hello, I'm Anuradha Saparamadhu. Founder and Director of Anuga Holiday Resorts. My journey with Commercial Bank started from around 2015-2016 when we first started the business. Commercial Bank has been working with one of our parent companies for a long time. So we had a lot of confidence to go ahead with them and start working with them. A few months ago, I was informed of the Anagi Workshop that happens with collaboration with PIM. So this program by Anagi is very, very useful I believe, because in a very short amount of time the program taught us a lot of things. Big thank you to Commercial Bank for this initiative and it's a very well thought out, and planned, and crafted initiative. And I think it should be carried on for a long time.
Shalaka: You are listening to the Green and Equal South Asia podcast powered by ACSIIS, a partnership between the European Union and IFC. This five-year program aims to spur green investments benefiting people and businesses across Bangladesh, Bhutan, India, the Maldives, Nepal, and Sri Lanka. ACSIIS will leverage over $850 million of private sector investments across the South Asia region.
For my next segment, it is my pleasure to welcome Kamalini Ellawala, Senior Manager for Sustainability, Women Banking and CSR at CBC. Hi Kamalini, thank you for joining us.
Kamalini Ellawala: Hi Shalaka, thank you for having me.
Shalaka: So Kamalini, the SME sector in Sri Lanka, contributes [to] more than 20 percent of the country's exports. So right now, while more than 75 percent of the enterprises in Sri Lanka are SMEs. Only a quarter of these are managed by women. The Ministry of Finance for Sri Lanka reaffirmed CBC as being the country's biggest lender for SME’s for the fourth consecutive year! Congratulations and against this background Kamalini, can you share with us how CBC supports women SME entrepreneurs in the country? How are you building a strong banking on women proposition?
Kamalini: Thank you, Shalaka. So we were one of the first private banks in the country to start focusing on MSMEs. Then, in the year 2020, with the support of IFC, we started building our women’s proposition - so having a special focus in supporting women entrepreneurs in the country. During the engagement we developed several products and services – Anagi business loan for women entrepreneurs, Anagi credit card, and Anagi insurance, as well. Also we relaunched our already available product - Anagi savings account. So this is the dedicated liability product we had for our women customers since the year 2012. Anagi savings account is our most fast selling special savings account, only second to our normal savings account. And also the bank relaunched Anagi pawning.
In this journey to support the women entrepreneurs, actually we focused more on provision of non-financial services. So, in this we rolled out a certificate course with PIM: the Postgraduate Institute of Management of Sri Jayawardena University, Sri Lanka, for women entrepreneurs from around the country. So far, we have trained and certified over 250 women entrepreneurs and have carried out ten programs around the island.
We also introduced a structured entrepreneur skill development program, as well as [a] one-to-one entrepreneur development program, where they were supported with expert business consultants. And also as mentioned, our COM LEAP platform where we open the gates to all our SMEs with a special focus on women SMEs to connect with the global market while having their dedicated marketplace in this particular platform. So in this actually Shalaka, our drive is to become the top-of-mind bank for women entrepreneurs in the country.
Shalaka: Fabulous and you're well on your way there Kamalini. So thanks for sharing this very comprehensive approach that CBC has towards women entrepreneurs and how to support them. And, you know, shifting gears a little bit, IFC recently did a study which CBC also participated in, where we found that 70 percent of women bankers, have strong aspirations to move to senior roles, but need to overcome kind-of multiple challenges to reach these leadership positions. So Kamalini, can you share with our listeners, how CBC promotes a culture of inclusivity and gender equality within CBC’s workplace?
Kamalini: We have always been an equal pay employer, and many of our best performing leadership positions were held by female staff members. And having rolled out the gender project with IFC, which had a 360 degree focus on empowering the women in the country, we have now started taking specific actions with the focus of increasing the female participation in leadership positions and getting them more involved in the decision-making process.
This year, we rolled out a leadership development program exclusively designed for our female staff members. So this is a program done by IIM Ahmedabad at the campus. Where we will be training 22 of our female leaders, supporting them to take up higher positions.
The bank is working hard to ensure work-life balance for all our staff. Which is crucial for both men and women in achieving their career goals while managing their personal responsibilities. So overall, the Bank's commitment to inclusivity and gender equality not only enhances employee satisfaction and retention but also it strengthens the banks overall performance and reputation also in the financial sector.
Shalaka: Fantastic and sounds like a wonderful place to work. Huge thanks for joining us Kamalini. Really enjoyed our conversation.
Kamalini: Thanks Shalaka. Thank you for having CBC and thank you for having me as well.
The Green and Equal South Asia podcast powered by ACSIIS. A partnership between the European Union
Masha Bandara: I'm Masha Bandara, Manager - Ragama Branch. Our professional working culture has always motivated me to become the person I am today. Being a mother of two, it's not always easy to focus on my career goals. Apart from being a banker and a mother and a PADI certified scuba driver, a freelance researcher and a translator, the bank has always supported me to maintain a superb work life balance and bring the best out of me. I feel super motivated to achieve both my personal and professional goals equally.
Shalaka: So we're coming close to the close of this podcast, but I want to sneak in one last question and I want to go back to Sanath, the CEO of Commercial Bank of Ceylon, for it. As Sri Lanka moves towards economic recovery, can you elaborate on the role of the financial sector in advancing both gender equality and climate action in the country's sustainable development?
Sanath: Yeah, Shalaka, as a country recovering from a crisis, in Sri Lanka, the financial sector plays and should continue to play, a pivotal role in advancing gender equality and climate action as part of the sustainable development efforts.
I would say by tailoring products and services to meet the needs of women led businesses and promoting microfinance options for them, financial institutions can create economic participation and empowerment among women. Simultaneously the financial sector in Sri Lanka can drive climate action by facilitating investments in green technologies and sustainable practices.
And additionally, integrating climate risk management into lending and investment decisions will help mitigate the credit risks we take. Because it will reduce the impact of climate change, such as extreme weather events affecting your lending portfolio - while supporting inclusive development pathway that benefit all segments of the society, including women and underprivileged communities.
Shalaka: Thanks so much, Sanath, and thanks for really centering the business case for both gender equality and climate action and demonstrating how CBC is doing that within your investments - within your lending operations. Really enjoyed the conversation and huge thanks for all your insights.
And thank you to our listeners, for joining us here on the third episode of the Green and Equal South Asia podcast.
We've had an exciting discussion on the unique opportunity that the banking sector has in driving transformational change by aligning their advocacy, their policy, their engagement and their investment efforts with net zero goals and with a more inclusive gender proposition.
So thank you, Sri Lanka. I'll see you again from another country.
You can learn more about IFC's work by heading to our website www.ifc.org/SouthAsia or on the social media channel X @WBG_Gender. Stay tuned for more episodes.
The Green and Equal South Asia podcast powered by ACSIIS, a partnership between the European Union, in association with Timber Media, Bengaluru.