CB Steering Committee implements Sri Lanka Sustainable Finance Roadmap

The Central Bank ( CB) has appointed a Steering Committee on implementation of the Roadmap for Sustainable Finance in Sri Lanka to facilitate effective implementation of the strategic activities encompassed in the Roadmap.

This was disclosed by CB Governor Dr. Indrajit Coomaraswamy when he delivered the keynote address at the launch in Colombo on Wednesday of the Roadmap for Sustainable Finance to encourage the financial system to promote financing for climate resilience projects to combat climate change in Sri Lanka.

This was the national launch of the Roadmap as it was previously unveiled globally on April 10 at the Sustainable Banking Network Global Meeting of the International Finance Corporation

(IFC) in Washington.

The committee headed by Senior Deputy Governor Dr. Nandalal Weerasinghe envisages monitoring and reviewing the progress while incentivising stakeholders in practicing sustainable finance in their ordinary course of business.

Having identified the need for capacity development in the sphere of sustainable finance in Sri Lanka, the CB through its training arm, Centre for Banking Studies (CBS), has designed a series of training programmes for stakeholders of sustainable finance.

The first of such capacity building initiatives was held on Wednesday, in collaboration with IFC and UNDP.

The CB joined its global counterparts in having a framework to encourage banks, leasing and insurance companies to provide finance for projects that aim to combat climate change or be climate resilient, Dr. Coomaraswamy said.

Public funding will obviously not be sufficient to fund programmes needed to fight climate change; the financial sector and the private sector have a critical role to play in addressing this issue.

“Hence mobilising investors from the private sector to finance sustainable projects is crucial to achieving tangible results,” he added

Sri Lanka has been named as one of the countries that are most vulnerable to the adverse effects of climate change by the World Bank.

“The Central Bank has placed much focus on sustainability. We consider it to be one of the core principles of the financial sector,” he said adding that “this is why we have taken the step of introducing a Roadmap.”

The main thrust of this Roadmap is to ensure that sustainability is embedded in the decisions of the stakeholders in the financial system.

“We are very cognoscente of the unprecedented climate change and its unintended and dangerous consequences,” he pointed out.

Sri Lanka requires investing Rs. 30 billion over the next five years to achieve national biodiversity targets and to avoid future expenses related to biodiversity restoration and management, the Roadmap for Sustainable Finance report revealed.

The country may face a 1.2 per cent loss of annual GDP by 2050 if effective measures are not taken to address climate change re l ated issues, International Finance Corporation, Country officer for Sri Lanka and the Maldives, Victor Anthonypillai said.

Sri Lanka is one of the biodiversity hotspots in the world and also has been ranked second among the countries most affected by extreme weather events in 20 years since 1998.