Financial institutions have the potential to use finance as a powerful force for positive change, directly benefitting the communities, the environment, and ecosystems. With the right frameworks and strategies, financial institutions can translate sustainability goals into meaningful, real-world impact. Initiatives like tree planting and climate-smart programmes are most effective when they engage people and communities, creating connections that foster care, ownership, and long-term benefits. By integrating environmental and social outcomes into actionable, locally relevant strategies, finance can drive transformative results. Alliance Finance has developed a blueprint demonstrating how sustainable finance can create a measurable impact, setting the trends, and offering a model for others to follow.
Echelon sat down with Romani De Silva, Deputy Chairman and Managing Director of Alliance Finance, to understand how the company’s philosophy translates into real-world impact. It has embedded a “people, planet, profit” approach across its business strategy and was among the first in the region to adopt global sustainability disclosure standards. Through this framework, Alliance Finance has created a practical model for other financial institutions to follow, demonstrating how sustainability can be systematically integrated into operations while generating measurable benefits for communities and the environment, whilst building business resilience.
How has Alliance Finance incorporated the values of its founders into the business?
Founded in 1956, Alliance Finance was built on the tenets of “others before self” and “earn before you spend.” These principles shaped our culture and business model, which is what you would call today, a double bottom-line business philosophy. Employees received nearly double the provident fund contribution mandated by statute, a generous gratuity scheme that rewards employees with a terminal benefit of two months’ salary at the highest slab for each year of service, amounting to four times the amount mandated by law, and profit-sharing bonuses since 1959. We introduced flexi hours, education grants covering two-thirds of course costs, and savings plans helping staff save a third of their salary. Revolutionary then and still offered today.
That same philosophy extended to our customers. We grew by serving small savers and borrowers who lacked access to banks. Many of our current depositors are the 4th generation of those early customers, and in many instances, all four generations currently have deposits.
Fast forward to 2012, with the steady growth of the business, we felt the need to encapsulate and integrate the time-tested values of our founders into a framework that would help those values to not only endure but grow and prosper along with the growth of the business, touching the lives of the people and the communities that were being served along the way.
In 2012, with the dawn of the consciousness of environmental sustainability and given its importance to the well-being of the world, we decided to formally adopt the “Triple Bottom Line”: People, Planet, Profit, as our guiding set of values and business philosophy, expanding our earlier focus on the people and profit dimensions. This formalisation of the three pillars is well depicted in the new AFC logo adopted in 2012. It is pertinent to note that this happened three years before the SDGs were formulated by the United Nations and adopted by the UN member countries. Through this transformation, we naturally became Sri Lanka’s first triple bottom-line financial institution.
Integrating this philosophy into the operations of 90 branches, every year we contribute 8% of post-tax profits to sustainability-linked initiatives and environmental social projects that reflect the needs of the communities we serve. Even during COVID, we upheld this initiative, funding hospital equipment, rail gate construction, and support for underprivileged schools.
How has Alliance Finance used global frameworks to drive sustainability?
After adopting the “Triple Bottom Line”, we searched for frameworks that would drive the philosophy into measurable practices. We adopted many globally accepted initiatives, such as the Global Reporting Initiative, etc, to integrate sustainability into the business. We also engaged globally renowned ESG consultants to build the architecture that we needed.
Those early systems taught us a lot but failed to scale and increase the real social and environmental impact on the ground. The focus was more on disclosure and reporting. We produced annual reports that got thicker and more voluminous by the day and won many local and global awards but yet we felt that our aspirations for creating impact were not being fulfilled adequately. The reports were academic and focused on compliance. We wanted a framework that could measure change and drive the Company to continually improve impact.
That search led us to the European Organisation for Sustainable Development (EOSD) in Germany, in 2012. The EOSD was created to advance sustainable finance across Europe. It hosts the annual Global Sustainable Finance Conference in Karlsruhe, which brings together sustainability thought leaders from banks, regulators, and practitioners from around the world. We began attending this inspiring conference in 2012 and maintained a close association with the organisation, given the common aspirations.
In 2017, the EOSD invited us to participate in an initiative to create the world’s first measurable and certifiable holistic sustainability standard for value-driven financial institutions. With partners from Nigeria, Uganda, and the Philippines, we helped contribute from a geographic and industry perspective and developed the Sustainability Standards Certification Initiative, deeply embedding measurable sustainability into certified organisations. In 2019, Alliance Finance became South Asia’s first SSCI-certified financial institution and later earned Level 3 of SCCI Version 2.0. Today, the standard has over €65 billion in assets under management in developing regions of the world, making it the go-to framework for those who are serious about embedding holistic sustainability into their businesses. Furthermore, a leading specialised Development Bank, a dynamic Capital Markets player, and a top-five player in the NBFI sector have also formally enrolled in the SSCI process, pledging to implement the standards and advance sustainability within their organisations, benefitting and supporting the resurgence of the Sri Lankan economy in the post-crisis context.
The SSCI framework measures progress year after year, ensuring that sustainability for us is not merely about awards and recognition of annual reports, but more about continuous, demonstrable impact that holds us accountable to ensure that nobody is left behind in the whole country.
What new, innovative financial instruments have you designed using these frameworks?
The SSCI framework gave us a structure to align not one but every financial instrument with measurable sustainability goals. Each certified institution must also set several high-impact goals that align with National priorities and the UN Sustainable Development Goals. We chose three: reducing carbon emissions through transition towards sustainable mobility solutions, creating livelihoods in marginalised communities through MSME financing, and expanding financial inclusion. All three issues are absolutely relevant to the sustainable development of the country.
The framework includes an innovation toolkit that promotes a culture of creativity, supported by digital systems and internal competitions. Here, innovation means linking every product to people and the planet.
We launched Sri Lanka’s first non-bank Green Bond valued at Rs1 billion which was oversubscribed on day one, funding rooftop solar and renewables. Later, we issued a Rs2 billion Social Bond for MSMEs and women-led businesses, which was also oversubscribed. Our Hapannu children’s savings account funds tree planting, creating forests that grow with each child, in partnership with the government and the PLANT project which aims to build biodiversity corridors on privately owned land.
Today 67% of our portfolio is aligned with 12 UN Sustainable Development Goals. This level of alignment has drawn top-tier DFIs such as the FMO Bank, which is world-renowned as an entrepreneurial bank driving impactful development. For us, that is the purpose of the SSCI framework: to integrate sustainability into the business itself.
How have climate and agriculture loans supported national development, and what insights has the company gained from managing its Rs798 million climate financing portfolio?
We began by focusing on climate-adaptive agriculture and developing new products to support it. Today, we finance farmers for vehicles that help them move their produce to markets and gold-backed loans that provide working capital for sectors like fisheries.
Boosting productivity wasn’t enough. We now strengthen value chains and finance farmers using climate-resilient practices. Through partnerships, we introduce water-saving technologies such as drip irrigation systems and fund dairy farmers adopting low-methane breeds suited to changing climates.
These lessons guide our sustainable finance approach: deliver positive returns and strengthen communities. We close MSME credit gaps through affordable, structured lending, reducing reliance on informal sources. By focusing on climate adaptation and inclusion practices, we drive economic resilience and national development.
What inspired the “One Million Trees for Unity” initiative, and how have partnerships with organisations like the RDA, Lions Club, and Defence Forces helped sustain its progress?
Built on the belief that partnerships amplify impact, the initiative used a part of the budget of 8% of profits for sustainability. On World Environment Day in 2018, 971 schools and 364,000 children across 25 Districts planted 176,518 trees: a national record. In the One Million Trees for Ethnic Harmony and Unity Project, religious leaders from every faith and the armed forces joined hands, fostering unity by planting trees in each other’s places of worship. Over 980,000 trees have now been planted through this unique programme.
Around 7 years ago, we joined Dr. Andrew Kittle and Ms. Anjali Watson in an upcountry leopard conservation project. The project restores the Peak Ridge Forest Corridor whilst reducing the human animal conflict. By protecting the leopard as the apex predator in the ecosystem, 36 species of flora and fauna are also conserved, significantly improving the biodiversity in the region.
The move towards ecosystem restoration has also helped the Company to embark on more challenging initiatives such as afforestation and reforestation. In partnership with the Forest Conservation Department, we launched the Hapannu Children’s Forest and Savings Account. Each child who deposits Rs25,000 receives a geo-tagged tree in a forest, which will grow in tandem with their savings.
We supported the Road Development Authority and the Lions Club through highway and expressway tree planting programmes.
How does Alliance Finance involve employees and communities in shaping these programmes?
To answer this question we would like to quote Peter Drucker, who famously said, “Culture eats strategy for breakfast.” You can have a great strategy in the boardroom, but if the culture on the ground isn’t right, the strategy will remain in the Boardroom.
Unlike the plethora of reporting-focused frameworks, the SSCI framework transforms behaviour at every level in the Organisation. Sustainability becomes instinctive and spontaneous, where managers now plant or gift trees on their birthdays by choice. SSCI has helped us to transform sustainability into a daily practice, not a checklist. Through the Ceylon Chamber of Commerce and Bankers Association, we’re also fostering collaboration among financial institutions from different sectors to work together for the common good. With Banks being larger in size and smaller in reach, and the NBFIs being smaller in size and larger in reach, there is tremendous potential for both sectors to work together in a manner that complements each other rather than compete. Our proposal aims to facilitate banks to raise large ticket impact funds at scale and use NBFIs to drive the funds into the rural economies, facilitating more sustainable and inclusive development, letting each sector play to its strengths.
DFCC Bank joined Alliance Finance as the apex lender for a women-led electric tuk-tuk project in Jaffna. The partnership brought together multiple stakeholders: DFCC as the apex lender, Alliance Finance as the on-lender, PickMe, creating employment opportunities for women drivers, and Evolution Auto, providing the electric vehicles. DFCC provided funding for the project at a lower interest rate, setting an example for this initiative.
What mechanisms ensure long-term continuity after leadership transitions? How do staff and management internalise sustainability targets in everyday decisions?
Continuity comes from linking our purpose to measurable goals. Every revenue stream is tied to these goals, which shape corporate strategy. From there, the same structure flows down through individual KPIs.
When the goals are clear, culture takes over. The framework also makes this process self-sustaining. Once the high-impact goals are set, every business plan must align with them. So, the moment financial targets are met, the sustainability purpose is also met.