April 11, 2019, Colombo, Sri Lanka —
The Central Bank of Sri Lanka, with support from International Finance
Corporation (IFC) and the United Nations Development Program (UNDP), has
launched the Sustainable Finance Roadmap for the financial sector to increase
capital flows to activities with a positive impact on the environment,
society, and governance (ESG), and also manage the risks associated with
these areas.
By providing policy guidelines and recommendations
for responding to ESG risks and opportunities, the Roadmap aims to green
the whole financial sector – banking, capital markets, and insurance –
and help build a more resilient and sustainable economy. IFC, a member
of the World Bank Group, serves as the Secretariat and technical advisor
for the Roadmap, while the UNDP provides funding support through the Biodiversity
Finance Initiative.
Although Sri Lanka accounts for less than
1 percent of global greenhouse gas emissions, the country is highly vulnerable
to climatic fluctuations. Recurrent weather-related disasters, particularly
over the past three years, have affected thousands of people and hampered
the country’s economic growth. The Government of Sri Lanka has emphasized
the need for sustainable development as part of its Sri Lanka 2030 Goal
and Nationally-Determined Contribution under the Paris Agreement on Climate
Change.
“Sustainability is one of the key focus
areas of Sri Lanka's economic policy. The government has attached a great
deal of priority to sustainability, realizing that we need to secure a
green economy for our future generations,” said Dr. Indrajit Coomaraswamy,
Governor of CBSL. “As the Central Bank, we have also placed a greater
emphasis on sustainability especially considering it as a principle for
the financial sector. Being the apex financial institution, we have taken
this momentous step to introduce a roadmap for the financial sector to
ensure that sustainability is considered in financial decisions. While
this provides broad guidance to all key stakeholders of the financial system,
we hope that all key players would adjust their plans and policies to accommodate
the need for sustainable finance practices. I thank all stakeholders who
partnered in this nationally important task.
Speaking at the first Sri Lanka Sustainable
Finance Workshop, hosted by CBSL and IFC in 2017, the President of Sri
Lanka, Maithripala Sirisena, emphasized the significant role the financial
system could play in achieving the United Nations’ sustainable development
goals. He highlighted that the banking sector was an important partner
for tackling crucial development challenges, including climate change,
poverty, and equity.
Building on that consensus, IFC worked with
CBSL in convening a dialogue with financial institutions and providing
strategic and technical guidance to the sector on sustainable finance,
including action plans. The roadmap referenced international best practice
and leveraged collective experiences from 36 SBN member-countries from
emerging markets.
“National roadmaps for the financial sector
can help unlock financing for sustainable development. This roadmap will
help Sri Lanka shift towards an inclusive, resilient, and low-carbon growth
path,” said Amena Arif, IFC Country Manager for Sri Lanka and Maldives.
“We congratulate CBSL on its leadership and look forward to launching
the National Financial Inclusion Strategy.”
Whether managing risk, creating business
value by incorporating sustainable solutions, or identifying innovative
ways to finance sustainability, the private sector is playing an indispensable
role. IFC, as an investor and advisor in the private sector, works with
financial institutions to introduce ESG standards and risk management in
their lending practices to promote stability of financial systems in emerging
markets.
About IFC
IFC—a sister organization of the World
Bank and member of the World Bank Group—is the largest global development
institution focused on the private sector in emerging markets. We work
with more than 2,000 businesses worldwide, using our capital, expertise,
and influence to create markets and opportunities in the toughest areas
of the world. In fiscal year 2018, we delivered more than $23 billion in
long-term financing for developing countries, leveraging the power of the
private sector to end extreme poverty and boost shared prosperity. For
more information, visit www.ifc.org
About Central Bank of Sri Lanka
Central Bank of Sri Lanka (CBSL), is the
apex financial institution in Sri Lanka. CBSL was established in 1950 under
the Monetary Law Act No.58 of 1949 (MLA) and following the amendments to
the MLA in December 2002, is responsible for securing its core objectives
of economic and price stability and financial system stability. In addition,
the CBSL is the advisor on economic affairs as well as the banker to the
Government of Sri Lanka (GOSL). On behalf of GOSL, the CBSL, as its agent,
is responsible for four agency functions of: management of the Employees
Provident Fund; management of the public debt of Sri Lanka; administration
of the provisions of the Exchange Control Act; and administration of foreign
and government funded credit schemes for regional development. For more
information, visit www.cbsl.gov.lk.
About IFC-supported Sustainable Banking
Network (SBN)
The Sustainable Banking Network (SBN) is
a knowledge and capacity-building platform of financial regulators, banking
associations, and environmental regulators from emerging markets interested
in developing sustainable finance frameworks based on national context
and priorities, as well as international good practices. IFC acts as the
Secretariat of the Network, playing the role of facilitator and Technical
Adviser to SBN. SBN membership now consists of 31-member countries, which
represent over 85 percent of the banking assets across emerging markets.
CBSL joined SBN in 2016. For more information on the Sustainable Banking
Network, visit www.ifc.org/sbn.
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