Sustainability is the concept that encapsulates environmental, social, economic and governance which is a priority for us, in addition to operating a profitable business. The theme flows across our businesses and strategic decision making, ensuring we set a secure path for future generations. This also includes conducting our business responsibly with the limited resources nature has gifted us with, which are challenged by climate change, man-made disasters, and unscrupulous usage of resources for short-term gain.

Our commitment to sustainable value creation is at the core of our operations, ensuring that we contribute positively to society while delivering long-term financial success. We recognise that sustainable value creation involves carefully balancing economic growth, environmental stewardship, and social responsibility. We aim to drive innovation, manage risks, and create opportunities that benefit all stakeholders, including our clients, employees, communities, and shareholders. We strive to foster a sustainable future by promoting green financing, supporting responsible investments, and working closely with businesses that align with our sustainability goals. Through these efforts, we aim to generate long-term value, for the Bank, the broader economy, and the environment, ensuring that our business practices contribute to the well-being of future generations.

A significant achievement in 2024 was the issuance of Sri Lanka’s first listed Green Bond and its initial listing on the Colombo Stock Exchange and the subsequent listing on the Luxembourg Stock Exchange. Appealing to environmentally conscious investors seeking opportunities to align with the overall ESG platform, it promotes investment in Sri Lanka’s debt capital market. The LKR 2.5 Bn generated through this will be used to finance and/or refinance a portfolio of Ground Mounted and Rooftop Solar Photovoltaic (PV) power generation projects.

DFCC Bank became the first organisation in Sri Lanka to be accredited as a Direct Access Entity of the Green Climate Fund in 2023. This prestigious recognition has enabled the Bank to embark on developing programmes focused on rooftop solar, and strengthening climate resilience in Sri Lanka’s agriculture and fisheries sectors, contributing to the long-term sustainability of these vital industries.

DFCC Bank has reinforced its commitment to sustainability by formulating its ESG policy this year. This policy serves as a strategic framework guiding the Bank’s operations, decision making and stakeholder engagement. The ESG policy outlines key priorities, including responsible financing, environment risk management, ethical governance and methodologies to ensure effective oversight of ESG aspects by the Board of Directors and Senior Management.

Sustainability Framework

In 2020, DFCC Bank developed its inaugural sustainability strategy, a comprehensive 10-year plan designed to tackle key sustainability challenges and take advantage of the opportunities facing the organisation. However, with the rapid advancement of global sustainability practices, increased focus on ESG factors, and significant developments in sustainability reporting and due diligence frameworks, the Bank recognised the need to reassess and strengthen its strategy. In response, DFCC Bank has engaged KPMG Sri Lanka to conduct a gap analysis of its current sustainability reporting and review the existing sustainability strategy with the aim of completing the assignment by mid-2025.

This assignment will comprehensively review the Bank’s existing sustainability strategy procedures, stakeholder engagements, and reporting frameworks. With KPMG Sri Lanka’s expertise, DFCC Bank will identify areas for improvement, ensuring full compliance with the latest reporting obligations.

The Bank is cognisant of its responsibility to fully implement the requirements of SLFRS S1 and S2 by the due dates and works relentlessly towards achieving its objectives by the given timeline. We know that the adoption of these frameworks is an ongoing journey. As the initial step to adopt SLFRS S1 & S2, the Bank intends to leverage the qualitative information in this report, laying a strong foundation for future progress.

As such, sustainability remained a key theme throughout 2024, with an enhanced focus and resource allocation. This was done to meaningfully include its many requirements into our business strategies and ensure sustainable business models that will be foundational to the longevity of our business. Having aligned our strategies with the triple bottom line, we continued with vigour to achieve our strategic sustainability goals within a robust governance structure.

Sustainability Governance Structure

DFCC Bank’s sustainability strategy is overseen by the Board of Directors and the Executive Sustainability Management Committee (ESMC). This governance structure ensures that sustainability objectives are aligned with the Bank’s strategic priorities and financial goals.

During the year, the DFCC Sustainability Trust was dispensed with, and its functions were integrated into the Bank’s operations to enhance efficiency.

Our Commitment to UN SDGs

Guided by our corporate values and a strong commitment to sustainability, we integrate the United Nations Sustainable Development Goals into our financing activities, business operations and our corporate social responsibility related activities. This alignment ensures that our initiatives contribute to long-term environmental, social, and economic well-being while driving meaningful impact for our stakeholders.