In today’s dynamic business landscape, “Sustainability” and “ESG” are at the forefront of discussions, revolutionizing corporate values and strategies. In this interview with Sanjeewa Bandaranayake, Head of Sustainable Finance, People’s Leasing & Finance PLC, we explore the profound impact of ESG principles on shaping the company’s core values and the imperative for businesses to prioritize environmental sustainability proactively.
What role do ESG principles play in shaping a company’s core values?
“Sustainability” and “ESG” are now prominent terms in contemporary discussions, encompassing environmental, social, and governance aspects. Such actions reflect a heightened awareness of the ecological damage caused by human activities, prompting increased scrutiny of corporate behaviour in terms of social and management practices.
Historically, businesses prioritized profit maximization, but contemporary concerns extend beyond financial gains. Questions now focus on the societal and environmental impact of corporate actions. The recognition has grown that technological advancements, while enhancing human comfort, also harm the environment and global sustainability.
This realization is the driving force behind the emphasis on sustainability and ESG principles. As our actions contribute to environmental damage and issues like climate change, there’s a growing understanding that our current trajectory is rendering the world unsustainable. This awareness highlights the urgency of sustainable finance and ESG principles.
Various stakeholders, including pressure groups, advocate for change, emphasizing the need for a transformation to create a more sustainable future. Examining this requires shifting away from the traditional perspective and embracing a holistic approach that considers the broader implications of our activities on the world’s livability.
How can businesses proactively cultivate a mindset change to prioritize environmental sustainability?
It is critical to acknowledge that ecological concerns often remain on the back burner until they escalate into significant issues affecting our immediate well-being. The imminent threats associated with our current trajectory, including the impacts of climate change, particularly the rise in sea levels, underscore the urgency for a shift in priorities.
Addressing other pressing issues before environmental concerns may prove to be a misguided strategy. There is a recognition that environmental challenges could surpass problems of a different magnitude, necessitating immediate attention to avoid more substantial challenges in the future.
Embracing the ESG path demands a profound change in mindset. This entails comprehending the extent of the damage inflicted, recognizing the imperative for change, and fostering genuine conviction. While persuasion cannot be forced, delaying proactive measures may result in unforeseen challenges, prompting an inevitable shift in priorities. Therefore, the recommendation is to take decisive action now rather than waiting for circumstances to escalate.
What steps is PLC taking to address environmental and social concerns associated with ESG while navigating related risks?
In light of the evolving mindset and understanding prevalent today, not only within People’s Leasing & Finance PLC (PLC) as a corporate entity but also considering the global landscape, significant changes are underway. The world is witnessing the emergence of new standards and initiatives that are reshaping various industries.
Sri Lanka, too, is undergoing transformational initiatives, notably driven by the Central Bank of Sri Lanka; our regulatory authority unveiled a Sri Lanka roadmap on sustainable finance explicitly dictating a re-evaluation of business models, particularly urging organizations to reconsider activities impacting the environment, social norms, and governance practices.
This roadmap outlines timelines and serves as an encouragement, potentially evolving into a directive for businesses to reassess strategies and operations. Within this context, People’s Leasing, being one of the largest non-bank financial institutions in the country, is aligning itself to these imperatives.
The organization acknowledges the need to revisit its approach, recognizing the broader implications of its operations.
As we delve into alternative fuel usage, exploring options like electric buses, we recognize the necessity for change. While the understanding of the imperative to change is clear, the associated risks and challenges in adopting new products and business models are significant. Currently, we are actively engaged in the development phase, seeking alternatives and adapting our business model to navigate and embrace these forthcoming transformations.
What are the specific strategies that PLC is employing to integrate ESG considerations?
We are actively pursuing several other strategic initiatives to align with ESG principles. Acknowledging the novelty of ESG, we are committed to a comprehensive learning and capacity-building process. Rather than reinventing the wheel, we have opted to leverage the expertise of the European Organization for Sustainable Development (EOSD), an organization based in Germany specializing in certifying companies on their holistic ESG framework by applying for the Sustainability Standard Certification Initiative (SSCI)
This partnership involves a thorough examination of all our processes, including decision-making, to determine how we can enhance our environmental, social, and governance compatibility, fostering greater sustainability. The certification process is expected to span one to three years. Our goal is not only to undergo internal transformation but also to communicate our commitment effectively to the market. We believe that achieving certification from a recognized organization like the EOSD will serve as a powerful testament to our dedication to sustainability.
How is PLC actively promoting sustainability through its initiatives?
We’ve taken significant steps to emphasize our commitment to sustainability, particularly for our high-net-worth individuals. An example is our newly launched Classique by PLC, centre, which we aim to certify as a green building. Equipped with an EV charging station, renewable energy system and rainwater harvesting system, this building will undergo EDGE (Excellence in Design for Greater Efficiencies) green building certification which will be awarded by Green Business Certification Inc. and promoted by International Finance Corporation (IFC), further signalling PLC’s commitment to sustainability.
Additionally, we are venturing into electric vehicles, partnering with a company striving to convert petrol and diesel-driven three-wheelers to electric with swappable battery technology for the first time in Sri Lanka. While in the early stages, the success of this project could lead to a substantial portion of the 1.2 million three-wheelers in the country transitioning to cleaner, electric alternatives, benefiting the environment by reducing carbon emissions and noise pollution, especially in densely populated areas like Colombo.
These initiatives showcase PLC’s proactive approach to promoting sustainability and green practices for long-term viability while assisting in the achievement of United Nations Sustainable Development Goals (SDGs) and national priorities by driving an ESG-compatible business operation.