Environment

GRI 103-1, 103-2, 103-3

Accelerating sustainable financing

GRI 307-1

Environmental, Social and Governance (ESG) considerations are embedded into our credit and risk assessment processes for our lending activities through the Environment and Social Management System (ESMS). All our credit files are inspected through the ESMS system, which is subject to an annual review by a committee comprising representatives from Sustainability, Risk Management, Credit Operation and Evaluations, Finance, and Corporate Finance.

Our credit evaluation officers are well trained in the ESMS and all credit facilities are checked for compliance with the exclusion list, project categorisation and risk assessment. This also includes increasing customer awareness and engaging with customers to minimise the negative environmental effects of their business operations.

• Percentage of credit facilities complied with exclusion list - 100%
• Percentage of credit facilities complied with project categorisation and risk assessment of ESMS - 100%
• All financing facilities were categorised as low-risk

Our team members work closely with customers to help fund their transition to a low carbon operation. The CDB Advance Roof Solar product was introduced under the Green Financing segment as a sustainable financing and investment solution. The product which promotes an intelligent and self-sufficient lifestyle paves the way for customers to upgrade to a smarter, renewable energy source with an additional income and zero electricity bills. Customers receive a comprehensive solution inclusive of the latest solar technology and after-sales service, and a convenient financing facility from CDB. We provide a total roof solar solution to the customers at their doorstep, offering competitive interest rate in the market. Our solution includes technical guidance, an easy payment scheme and convenient installation. Our target is to provide 300 rooftop solar facilities in the ensuing year, targeting a capacity of approximately 2.5Mw.

• 105 CDB Advance Roof Solar facilities approved during the year
• Approximately 633Kw capacity was achieved through 105 facilities approved during the year
• Partnered with two suppliers registered with Sri Lanka Sustainable Energy Authority

Promoting responsible financing

Furthermore, to accelerate responsible financing, we established a Sustainable Purchasing Policy to minimise our environmental impact and deliver community benefits through the responsible selection of products and services. To strengthen the sustainability of the supply chain, our suppliers are encouraged to adopt sustainable practices that minimise environmental impact and deliver community benefits. We expect the policy to foster innovation in our supply markets to enhance the effectiveness of sustainable behaviour in the procurement process. We have stopped the use of single use plastic within our office premises as well.

Accelerating sustainable mobility solutions

We aim to increase our energy-efficient vehicle portfolio to 50% of the total vehicle lending portfolio by 2025 from 22% as of 31 March 2022. We encourage our customers to adopt environmentally conscious practices by promoting environmentally friendly products and encouraging customers to reduce their carbon footprint.

Digital transition to promote green living

As we progress towards becoming a TechFin company, we continued to use our tech capabilities and strategy to advance our sustainability agenda and reduce our dependence on brick-and-mortar distribution channels. We aim to be a resource-efficient and carbon neutral organisation, leaving the least carbon footprint as we pursue our aspired targets during this decade. We have expanded our capacity to achieve our targets through tech disruption without opening any physical branches over the past four years. This has resulted in lowering our carbon footprint, saving on capital expenditure, and less resource utilisation with no impact to our business process. Due to the automation of processes, our team members who were engaged in manual processes were redeployed to value-adding job roles by making a centralised team to accommodate branch operations while increasing the efficiency and productivity. Our salespersons have been empowered to onboard customers remotely and process credit facilities through the Flexi capture app with the use of RPA technology.

Our investments in automation and initiatives to accelerate customers migrating to digital platforms have contributed to less paper consumption and a reduction of the carbon footprint. During the year under review, 2,576 customers converted to digital transaction platforms by downloading the CDB iNet app. The increased adoption of digital channels and products by customers has resulted in enhanced efficiency, reduced energy consumption, low waste generation, low emission levels, and optimised resource utilisation within the Company. Our investments and adoption of technologies such as Robotic Process Automation, the in-house built ERP system, SmartOps and digital platforms including CDB iNet and iControl app have augmented our green productivity and digital platforms.

Furthermore, the pandemic accelerated our transformation of the way we work, manage, develop and engage our employees. We leveraged our technological capabilities to drive efficiency, support innovative ways of working and enhance convenience and simplicity while reducing the carbon footprint from our operations. We have designed processes and built security controls to enable remote working. There was a significant reduction in resource consumption across our network and a consequent reduction in our environmental footprint, as a considerable percentage of our team members worked from home.

Embracing Green branches concept

Embracing the “Green Branches” concept, we aim to convert our branches to green branches that are energy and resource-efficient and drive a sense of affinity towards the environment in our team members through education and engagement and an eco-friendly ambiance. Beyond installing solar panels, our aim is to develop team members who are mindful about the environment, through these branches. We aim to convert six branches to Green branches in FY 2022/23 and install solar energy in 16 branches across the island.

Educating our employees

CDB Advance internalisation strategy enables us to create employee awareness of the triple bottom line concepts, and green economy and engages our team members to adopt green practices. The four pillars of internalisation, include educating all employees, eliminating all forms of waste, sustainable energy and transport and employees walking the talk.

CDB Green Ninja ambassadors

Sustainability is a way of life at CDB. Our employees are instilled with a sense of responsibility and affinity towards the environment and they act as green ambassadors to champion green initiatives. The CDB G-Squared – Go Green Club, which is the most important platform to educate and engage our team members was initiated in 2017 to connect people to nature. This platform was revamped and relaunched during the financial year 2020/21 as CDB Advance Green Ninja Club. The Club, which is a part of CDB Advance internalisation strategy has continued to gather momentum over the years and successfully launched several campaigns including the Green Ninja quiz, the green family event and the single use plastic-free pledge.

The Club aims to educate its members to be more conscious of prevalent environmental issues, find proactive solutions and ultimately create national interest in environmental challenges. In turn, the Club members, acting as Green Ambassadors of CDB, educate their colleagues, family members and associates about championing green efforts.

CDB Advance Green Ninja Club has 110 members who act as agents of change. New office bearers were appointed during the year with representation across all branches and divisions. A Branch Green Ninja Champion was appointed for every branch to coordinate all green initiatives across the branch network. A recognition ceremony was held during the year under review to recognise the contributions made by Green Ninjas.

Enhancing the engagement of team members

The following measures were implemented during the year under review to advance the CDB internalisation strategy.

• With the aim of promoting sustainable consumption, “Seed Your Future” project was conducted for the second consecutive year by distributing 100% biodegradable seed pods to all our team members. Through this we encourage our team members to grow organic food and be engaged with the environment. This project not only engaged our team members and their families in sustainable home gardening, but provided the opportunity to learn about organic food consumption while protecting the environment.

• Conducted virtual engagement activities such as the Environment Day quiz, the nature crafting competition, World Water Day competition and decorating our branches with eco-friendly christmas decorations.
• The annual “Plant a Tree Plant a Life” programme was held to commemorate Environmental Health Day and World River Day in 2021 in partnership with “Reforest Sri Lanka”- one of the largest non-profit reforesting organisation and the Sri Lanka Institute of Information Technology (SLIIT). The tree-planting project was launched to plant 1,000 saplings to conserve the water catchment areas alongside the Kalu Ganga in Horana and Ingiriya.

• To commemorate the Global Recycling Day 2022, a knowledge-sharing campaign was held to create awareness on recycling. Furthermore, a recycling corner was established at the head office to provide a responsible platform to dispose plastic, paper, and electronic waste which are subsequently sent to a registered recycling partner.
• The Green HRM Scorecard was introduced to complement the CDB Advance project in developing a green workforce with a deep understanding and appreciation for the green culture within the Company. This has become an important employee engagement initiative to drive the green culture within CDB.

Creating Green awareness

We understand the importance of creating employee awareness about global environmental challenges. Our team members are educated on issues of concern, promote action by creating awareness and encourage to be a part of the solution by understanding the problem.

We believe environmental literacy is essential to tackle climate change and build resilient communities. Sustaining the momentum, keen interest was shown by our team members. Sustainability bulletins and e-flyers were circulated to all employees through internal communication, Green Ninja FB Group and WhatsApp groups to raise awareness, encourage green communication, and capacity building through knowledge sharing while ensuring our team members remain upto-date on latest important environmental issues. We also continued to commemorate important international days by sharing posts, educational videos, documentaries, statistics and facts through our Green Ninja FB group. E-flyers of these celebrations are circulated through CDB announcements to all team members.

Sustainability is a core aspect of the induction programme to ensure all recruits are aligned with the Company’s sustainability initiatives and to inculcate sustainability-led culture and mindset. The comprehensive e-learning module on sustainability is being finalised to provide an in-depth understanding of sustainability. The module provides the basics of the CDB Advance Strategy, application to the work environment and spurs innovation.

Furthermore, we encourage our team members to initiate a dialogue and share their ideas and suggestions through our private FB/WhatsApp groups. The convergence of ideas helps to select feasible ideas and to implement them in the Organisation, and create the culture needed to achieve our sustainability goals.

The conservation wheel at CDB

GRI 306-2

The conservation wheel indicates the environmentally friendly measures implemented across our Organisation to reduce our carbon footprint, waste generation and water and energy consumption by applying the concepts – of reduce, reuse, repair, replace, recycle and refuse and reject.

In FY 2021/22, we became a Carbon verified company for the seventh consecutive year and was certified as a Carbon Neutral business entity.

Carbon footprint management at CDB

GRI 305-4, 305-5

We embarked on the carbon footprint calculation journey in the year 2015 to become a carbon neutral entity, and in 2015/16, we were recognised as the first ISO 14064-1 carbon verified financial institution in South Asia by the Sri Lanka Carbon Fund. In FY 2021/22, we became a Carbon verified company for the seventh consecutive year and was certified as a Carbon Neutral business entity. We have invested in Sri Lankan Certified Emission Reductions (SCER+) of Kirkoswald Small Scale Hydropower project registered under Sri Lanka Carbon Crediting Scheme (SLCCS).

Our pledge to the UNFCCC Climate Neutral Now Pledge, which represents a global community of organisations committing to becoming climate neutral by the second half of the 21st century, represents our commitment to reduce emissions and accelerate the global journey to a climate-neutral future. Under the pledge we remain committed to measuring and reporting our greenhouse gas emissions for an agreed-upon period, reducing our greenhouse gas emissions as much as possible and offsetting remaining emissions with Certified Emission Reductions (CERs).

Carbon reporting enables us to analyse, assess and manage all resulting greenhouse gas (GHG) emissions consequent to our business operations, track the progress of energy reduction schemes and optimise our energy consumption. Our total carbon emission for the FY 2021/22 was 2,649 compared to 2,384 in the previous year.

Category	Emission source	2020/21	2021/22
Direct	Stand-by diesel generators - Onsite diesel generators	9.2	10.13
	Refrigerant leakage	51.69	99.73
	Fire extinguishers	0	0.02
	Company-owned vehicles-Owned vehicles – fuel paid by CDB	53.65	92.79
	Employee commuting- – fuel paid by CDB	288.06	228.92
Indirect	Grid-connected electricity	1051.11	1,185.89
	Business travel of employees via air	0.84	-
	Employee commuting, - Not paid by the Company	830.15	907.81
	Municipal water	3.84	4.44
	Waste disposal	0.24	0.10
	Transmission and distribution loss	94.26	118.45
	Waste transportation	0.04	0.04
	Transport of locally purchased items	0.09	0.09
Total		2383.18	2,649

 

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Energy management

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As per the annual carbon footprint analysis, we continued to monitor and report the amount of energy produced, purchased and consumed according to the source.

As per the annual carbon footprint analysis, we continued to monitor and report the amount of energy produced, purchased and consumed according to the source. The energy consumption for FY 2021/22 was 2.19 Mn. kWh., 2.3% less than the previous year’s energy consumption.

We have adopted the following measures to reduce our energy consumption:

• Reducing energy consumption by collaborating with suppliers and peers, setting energy efficiency standards, adopting cost-effective technologies and promoting energy efficiency through regular energy audits.
• Tracking and reporting energy consumption, reduction and intensity over time and reducing energy consumption in our operations, including using efficient lighting and electrical appliances as a compulsory requirement under the annual CDB GHG emission analysis process.
• Creating employee awareness on energy reduction and improving energy efficiency in households through competitions.
• Introducing the Green branch concept and installing solar power system in our branches.
• Integrating the investment and promotion of household renewable energy and renewable energy consumption into our medium-term business strategy.

Water management

GRI 303-5, 306-5

Respecting the right to safe drinking water and sanitation through availability, accessibility, acceptability and quality of water, we adopted the following measures to manage our water consumption:

• Improving water performance and promoting the reuse of freshwater through a rainwater harvesting system for gardening.
• Sharing smart solutions with peers and creating awareness of water conservation among employees.
• Organising competitions to create team member awareness in commemoration of the World Water Day.
• Providing safe and hygienic gender separate washroom facilities to employees.
• Responsible for disposal of sanitary products and medical waste, responsible for the storage of cleaning equipment and providing sanitation and hygiene training to employees.

Waste management

GRI 306-1, 306-2, 306-5

We strive to eliminate all forms of waste within our Company. For efficient management and disposal of waste, we maintain waste disposal records at the head office. Our team members are educated on reducing waste in general, including food waste and paper waste to instill a mindset of responsible waste management, which is crucial to reducing our environmental footprint. The following measures were adopted to efficiently manage the waste generated in our Company.

• Initiated the CDB Advance Recycling Corner in our head office in commemoration of the Global Recycling Day 2022 to encourage our team members to dispose their paper, plastic, and electronic waste responsibly. We aim to replicate the recycling corner in our branch network as well.
• All our team members remain committed to the CDB single-use plastic free pledge which was initiated in 2019/20 in commemoration of the World Environment Day. In the next phase, we are looking at alternatives to plastic items used within the Organisation.
• CDB e-waste and paper waste recycling programmes are in place to create responsibility in recycling waste in our operations and assess and prevent the actual or potential negative impact on soil, wildlife, ecosystems and the food chain.
• Using colour-coded bins to separate waste and maintain waste disposal records at the head office for better waste management.
• Initiated a pen recycling programme to collect and recycle used pens across the branch network.
• Encouraging team members to reduce food waste and contribute towards a sustainable environment.
• Improving environmental literacy to build a grassroots level movement to achieve sustainable development goals by sharing e-flyers and videos among all team members.

Waste disposal during the year 2021/22

Type of waste item	Disposal frequency	Weight (Kg)	Disposal method
Paper waste	As and when required	934	Waste collected from the head office is stored in the basement and sent for recycling through Green Links (Pvt) Ltd.
E-waste	As and when required	722	Collected as and when required and disposed of through Green Links (Pvt) Ltd.
Food waste	Once in two days	3,142	Collected by the owner of a farm
Damaged office equipment	Upon request by the respective division/branch	Not weighed	Collected at a single location in the head office and disposed of through a registered supplier
Polythene	Daily	Not weighed	Disposed of through CMC garbage disposal method

Conservation of biodiversity through collaborations

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The LIFE Project

A landmark public-private initiative to restore one hectare of degraded land in Halgahawala, Opatha, adjacent to Kanneliya rainforest. The project was expected to take place over five years and completed its fourth year recently. However, the project is a lifetime project which is expected in bring more value additions in the future.

Aim

To restore a 10 ha block of degraded rainforest land in the Kanneliya forest reserve and the development of a replicable model for the restoration of degraded forest landscapes in the wet zone of Sri Lanka. This project also aims to develop a biodiversity credit accrual system in par with international standards which would enable biodiversity conservation project owners to generate accruable non-carbon credits.

Partners

The project is executed in partnership with Biodiversity Sri Lanka, the Forest Department and the International Union for Conservation of Nature (IUCN) Sri Lanka together with nine private sector partners.

Achievements and Impacts

• An additional two hectares of degraded land area were annexed to the existing site and restoration activities were initiated.
• The intensive restoration approach was practiced by applying several adaptive methodologies, such as partial removal of the Kekilla vegetation, increasing the planting pit size, on-site nursery management, application of organic fertilisers, introduction of soil conservation and improvement methods, and the introduction of plant protection methodologies.
• The partners visited the site on 3 February 2022.
• Five monitoring visits were carried out during the reporting period.
• The action was taken during the reporting period to finalise the Forest Ecosystem Restoration: Field Verification Standard with NEPCon – an international accreditation agency.

The Life to Our Mangroves Project

The project focuses on proposing to implement a Mangrove Restoration Project as a Nature-based Solution (NbS) that will generate multiple environmental as well as socio-economic benefits. Overall, the intervention will enhance the resilience of the mangrove ecosystem, its capacity for renewal, and the provision of ecosystem services, whilst contributing to the socio-economic development of local communities. The project will focus on conserving 25 ha of land in Anawilundawa wetland sanctuary which is one of the six RAMSAR wetlands.

Aim

To enhance resilience, and ecosystem services by the identified mangroves along with demonstrating the value of mangrove restoration as a nature based solutions to address the impacts of climate change, and socio-economic development challenges, building resilience and community readiness. This further aims to showcase the value of building a partnership to contribute towards the reduction of Sri Lanka’s climate change vulnerability.

Partners

The project will be done in collaboration with Biodiversity Sri Lanka, the Department of Wildlife Conservation and ten corporates.

Key activities

This is a five-year project that will focus on the following key activities in the ensuing years;

• Baseline survey and stakeholder mapping
• Planning of restoration processes, procurement and allocation of resources
• Ground implementation of ecological restoration process including the setting up of mangrove nurseries
• Setting up of monitoring criteria and record-keeping and reporting mechanisms
• Continuous monitoring and evaluation of data gathered periodically.

The Ittapana Mangrove Conservation Project

The Ittapana mangrove conservation project conducted in partnership with the Centre for Sustainability of the University of Sri Jayewardenepura, conserves 10 acres of Ittapana – Horawala mangrove forest which is one of the most threatened landscapes in Sri Lanka. A mangrove research centre will be established for mangrove ecosystem studies.

Aim

To establish a demonstrative model for sustainable mangrove management which can be adopted for other mangrove ecosystem conservation in Sri Lanka.

Partners

This project is done in partnership with Centre for Sustainability of the University of Sri Jayewardenepura.

Key activities

This is a two-year project that will focus on the following key activities in the ensuing years;

• Establish a Mangrove Education and Research Center to improve knowledge of Mangrove Ecosystem
• Eradicate invasive species on the site
• Create a free growing open mangrove arboretum including native, threatened, and rare mangrove and mangrove associated plant species
• Establish a mangrove plant nursery to propagate mangrove plants for restoration and conservation purposes.

Investments in environmental initiatives in 2021/22

Description	2021/22
	Rs. Mn.
Biodiversity conservation and ecosystem restoration	3.3
Tree planting	0.4
CDB Haritha	5.3
Education and engagement	1.3
Carbon footprint management	1.0
Other	0.7
Total	12.0

Achieve goals through collaboration

Over the years, we have continued to build partnerships that add value to our conservation efforts, resource efficiency agenda, and creating awareness on conservation. Our efforts include collaboration with energy providers and relevant companies to scale up both supply and demand of renewable energy and develop a district energy system. Furthermore, we collaborate with suppliers to procure clean energy, increase the share of renewable energy and support new business models to deliver sustainable and renewable energy.

We became a participant to the Global Compact, undertaking to observe the 10 principles based on universally recognised UN Standards in 2020. To ensure that these principles are anchored in our business operations, we are now in the process of developing guidelines, policies and action plans considering all aspects of our business.

Priorities for 2022/23

In our efforts to be the leader in sustainable finance in Sri Lanka, advancing the green economy by 2030, we will continue to prioritise green financing, offer renewable energy-based bundled products suite and accelerate affordable electric and hybrid mobility solutions. Under conservation and biodiversity, we advance sustainable financing, forest conservation and preservation and landscape restoration by 2030. We will create Green Ambassadors who will be a part of the solution, by creating awareness of current sustainability issues among our team members, their families, our customers, and other stakeholders. The Life to Our Beaches project will continue during the year. After a lapse of a year due to the pandemic we will resume the Green Family projects in FY 2022/23. We will continue to monitor the mangrove conservation projects as well.