Q: What are your thoughts on Commercial Bank of Ceylon being recognised as Sri Lanka’s best corporate citizen in 2021 by the Ceylon Chamber of Commerce?
A: Good corporate citizenship is integral for sustainable business and therefore, many companies aspire to be good citizens.

Given our positioning as the largest private sector bank in the country, we serve customers from all walks of life so it is quite natural for us to have the citizenry’s best interests at heart.

The Ceylon Chamber of Commerce was the first chamber to be established in Sri Lanka and is considered to be the leading voice of business in the country. As such, the recognition bestowed by this prestigious organisation is credible in highlighting companies that genuinely practise good corporate citizenship rather than merely paying lip service to the concept.

Being recognised as the overall winner at the Best Corporate Citizen Sustainability Award 2021 provides us with further encouragement and impetus to get more involved when it comes to sustainable business practices. Moreover, this certainly serves as encouragement to the hardworking team at Commercial Bank.

Furthermore, we became the first bank in Sri Lanka to achieve 100 percent carbon neutral status in early 2021, which was a momentous achievement for us.

Q: And what energy conservation methods and processes has the bank adopted to help it achieve carbon neutrality?
A: We began the process of measuring our carbon footprint many years ago. Initiatives such as the installation of solar PV systems, efficient air conditioning systems and LED lighting were introduced even before the process began.

Presently, many of our branches are powered partially or entirely by solar energy. Through this, we managed to reduce emissions attributed to the consumption of grid connected electricity by approximately 10 percent in 2020. Subsequently, the bank achieved a reduction of more than 20 percent in total greenhouse gas emissions.

Our multifaceted green initiatives also include lending to eco-friendly operations; migrating customers to paperless banking; reducing the consumption of nonrenewable energy, water and other resources in our operations; and supporting community initiatives that help conserve habitats and the environment.

Commercial Bank takes pride in having financed the first commercially viable wind power project and the first commercial scale solar power project developed in Sri Lanka. We continue to support projects that focus on renewable energy, water efficiency, waste management, emissions reduction, drip irrigation and rainwater harvesting.

In addition, the bank was a pioneer member involved in formulating the Sustainable Banking Initiative (SBI) in partnership with 18 members of the Sri Lanka Banks’ Association (SLBA).

We were also recently recognised by the IFC for using its Climate Assessment for Financial Institutions (CAFI) tool to achieve the highest number of climate finance transactions in South Asia in 2020. Commercial Bank’s achievement included a reduction of 208,400 tonnes of carbon dioxide equivalent (tCO2e) greenhouse gas emissions, which is comparable to removing more than 40,000 cars from roads.

Q: How can sustainability goals support corporate objectives?
A: Sustainability helps organisations align their business strategies with a purpose beyond profits and financial performance, thereby delivering meaningful value to all stakeholders.

As a bank, we have identified how this can be achieved through our products and services, such as by influencing clients to adopt solutions like green financing, and our Social and Environmental Risk Assessment System (SEMS) in lending.

Being a financial institution, our impact on the environment is comparatively lower. However, we have been able to minimise our emissions and consumption of resources further since committing to doing business sustainably.

As we take the environmental, social and economic impacts of our operations into consideration, it also gives the management a holistic view of organisational performance in business decision making, which has in turn propelled us towards achieving corporate objectives.

Q: What role does sustainability play in the bank’s overall strategic plan?
A: As a systemically important domestic bank, we take our wider responsibilities seriously – and these are entirely consistent with our vision to create value in the short, medium and long terms.

Sustainability is interwoven into our corporate agenda and acts as a key pillar of the bank. Our approach to sustainability is strategic and long term, rather than ad hoc and spur of the moment.

We consider both external and internal factors when incorporating sustainability measures into strategic plans, such as managing external factors to make customers and stakeholders more sustainable, promoting inclusivity through our CSR programmes and maintaining sustainable internal processes.

Each strategic business unit takes great care to incorporate sustainable practices into business plans and has its own sustainability targets to achieve. These targets and achievements are closely analysed and evaluated periodically, similar to our revenue and profit figures. This enables us to identify areas for improvement and take swift corrective action where necessary.

Our goal is to be a leader that seeks to build partnerships across ecosystems, making every attempt to assist customers and suppliers in becoming compliant with relevant sustainability requirements and regulations.

Q: Does Commercial Bank publish a sustainability report?
A: Our annual report includes extensive and comprehensive social and environmental reporting, which details the costs and impacts of all sustainability initiatives, sustainable business practices and community welfare programmes undertaken by the bank.

However, our focus on sustainability goes beyond mere reporting. Sustainability is integrated into all business operations.

Q: How are sustainability related indicators considered as performance measures?
A: The bank follows a meticulously crafted sustainability strategy and blueprint, which is the guiding force for all its sustainability initiatives. Once annual business objectives and targets are set, sustainability targets are aligned accordingly. The targets are derived based on each function’s core activities and how they contribute to achieving the bank’s sustainability goals.

For example, the Premises Department would have measurement indicators such as the energy reduction to be achieved in percentage terms, the number of branches to be converted to solar power and so on.

Similarly, the Risk Department’s sustainability dashboard would include metrics such as exposure to ‘negative list’ and ‘exclusion list’ activities, as identified in the bank’s social and environmental policy, due diligence statistics and corrective action plans.

The green financing function’s measurement parameters include the achievement of stipulated portfolio growth over the year. This measurement process also includes quarterly sustainability dashboards presented to the management and internal dashboards compiled by the Sustainability Steering Committee, which covers 15 key areas.

Q: And how does the bank identify environmental impacts and risks?
A: The bank’s Integrated Risk Department analyses all aspects of risk, both internal and external. Environmental risks associated with lending projects are screened by the SEMS framework, and the social and environmental impacts of supply chains are reviewed through supplier selection and evaluation processes.

Commercial Bank also reviews all aspects of economic, environmental, social, human rights, societal and product responsibility factors, to rank their significance to its operations and materiality to relevant stakeholders.

Q: Could you explain how corporate governance is incorporated into the bank’s systems and processes?
A: Commercial Bank has an unwavering commitment to good corporate governance, and conducts its affairs with the utmost intellectual honesty, integrity and diligence in alignment with its obligations to society and the environment.

Good corporate governance is a collective responsibility that goes above and beyond the letter of legal and regulatory requirements. It is the foundation for financial integrity, sustainable performance and investor confidence.

The bank maintains strong and effective risk management practices that enable it to leverage opportunities while being a good corporate citizen.

Its corporate governance framework has withstood the test of time for over a century. It has been regularly reviewed and updated to align with evolving regulations and best practices, to guide the board, board committees, management and staff in performing their stewardship roles.

This framework is underpinned by the governance principles of leadership, integrity, effectiveness, accountability, transparency, sustainability and shareholder engagement.

They guide the bank’s management in all decisions relating to board oversight, delegating authority, dividing responsibilities, resource allocation, risk management, compliance, performance appraisals and compensation, related party transactions and financial reporting.

The awards and accolades we’ve received from prestigious local and foreign awarding bodies have enabled us to become the most awarded bank in the country as testimony to our commitment to good corporate governance.

We have also had the honour of winning Gold in the Corporate Governance Disclosure category for many years – including in 2021 – at the Institute of Chartered Accountants of Sri Lanka’s Annual Report Awards.

Q: How are sustainability concerns taken into account in the financial services industry?
A: The financial services industry has a significantly lower negative impact on the environment. Nevertheless, there are many ways in which it can contribute to a sustainable business environment.

It’s very encouraging to note that the industry is keen to address sustainability concerns. For example, this is achieved by minimising resource utilisation by migrating customers to digital channels, promoting financial inclusivity through customer education initiatives and product customisation, undertaking a range of CSR initiatives and most importantly, engaging in sustainable business practices.

The dedication demonstrated by the SLBA through the formation of the SBI and its members’ active participation must also be lauded.

Renganathan
Managing Director
Group Chief Executive Officer
Telephone:2486000
Email:info@combank.net
Website:www.combank.lk