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Sustainable Banking

Voluntary, sector-led action for sustainable finance

Sustainable Banking Initiative

The Sustainable Banking Initiative (SBI) of the Sri Lanka Banks’ Association (SLBA) is a voluntary, sector-led platform that supports the achievement of the United Nations Sustainable Development Goals (SDGs). Launched in November 2015 following extensive dialogue within the banking sector, the SBI serves as a focal point for policy advocacy, proactive engagement, and capacity building, both within the banking sector and among broader stakeholders.

The Initiative was established upon the codification of 11 Sustainable Banking Principles. While all Sri Lankan banks endorsed the initiative at its inception, 18 formally committed to upholding the principles in 2015. Ten years later, the SBI comprises 20 signatory banks that collectively represent over 90% of Sri Lanka’s banking sector assets and continue to actively collaborate on sustainable development.

A Shared Commitment

20 signatory banks representing over 90% of banking sector assets

  • At launch in November 2015, 18 banks joined the SBI. Two more signed on by 2020.
  • Signatory banks have pledged to uphold 11 Sustainable Banking Principles, creating a common framework for environmental, social, and governance alignment.
  • The signatories represent over 90% of total banking sector assets in Sri Lanka, signalling sector-wide commitment to sustainability.

Supporting Implementation

Guides, toolkits, and training resources for member banks

The SLBA SBI provides a range of practical tools and resources to help signatory banks embed sustainable finance into core operations:

  • A Detailed Implementation Guide and Toolkit for integrating the Sustainable Banking Principles
  • An E-Learning Platform to build employee awareness and capacity across member banks
  • Local case studies to support internal trainers in demonstrating Environmental and Social Risk Management (ESRM) and Positive Impact financing with context-specific examples

Working with National Institutions

Collaboration with the Central Bank of Sri Lanka, the Sustainable Development Council, and the Ceylon Chamber of Commerce

The SBI plays an active role in Sri Lanka’s sustainable finance architecture:

  • A contributor to the Sustainable Finance Roadmap developed by the Central Bank of Sri Lanka (CBSL)
  • Member of CBSL’s Stakeholder Committee on Sustainable Finance Implementation, representing the banking sector
  • Works closely with the Sustainable Development Council of Sri Lanka, the country’s SDG coordination body
  • Collaborates with the Ceylon Chamber of Commerce to explore innovative financing models, including blended finance and climate risk management solutions

International Partnerships

Connecting with global sustainable finance platforms and networks

The SLBA SBI works with global institutions to bring international insights into local action:

    • Founding regional partner of the United Nations Financial Centres for Sustainability (UN FC4S)
    • Facilitates collaboration between the Central Bank of Sri Lanka (CBSL) and the United Nations Development Programme (UNDP) Finance Sector Hub
    • Supports dialogue with the European Union (EU) and the International Platform on Sustainable Finance
    • Works with the United Nations Environment Programme – Finance

Initiative (UNEP FI) and the Green Building Council of Sri Lanka to promote green mortgages and sustainable construction

  • Engages with the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the International Chamber of Commerce (ICC) Sri Lanka on national dialogues on sustainable finance

Engaging the Real Economy

Sector dialogues on agriculture, apparel, climate risk, and more

The SBI connects banks with industry stakeholders to explore sustainable finance applications in real sectors:

    • Partners with the Sri Lanka Agripreneurs’ Forum to support sustainability in agriculture
    • Collaborates with the International Union for Conservation of Nature (IUCN) on an HSBC-supported initiative focused on sustainable apparel production
    • Facilitates dialogue between NGOs and insurers on climate and disaster risk transfer mechanisms

Putting Sustainable Finance into Practice

Bank-led green lending and blended finance initiatives across Sri Lanka
      • With support from the Asian Development Bank (ADB), 10 SBI member banks financed over 2,000 rooftop solar PV installations (totalling 23.5 MW) between 2017 and 2019
      • SBI signatory banks are aligned to support a national target of 60 MW of solar capacity under the ADB refinance scheme
      • Other supported projects include:
        • A 10 MW ground-mounted solar project in Hambantota (2016)
        • A 10 MW waste-to-energy power plant in Muthurajawela (2018)
        • Financing for climate-smart agriculture (e.g., drip irrigation, protected houses) and green leasing for electric and hybrid vehicles

Sustainable Finance Capacity Building

      • Formal collaboration with International Finance Corporation and European Union for conducting specialized training programs for the banking industry and other stakeholders on Fundamentals, Risks and Mitigation, Disclosure Standards etc.