Sanath Manatunge, Managing Director and Chief Executive Officer of Commercial Bank, Sri Lanka’s largest private sector bank, shares insights into the bank’s ESG (Environmental, Social and Governance) strategy, a cornerstone of its long-term goals and commitment to the nation’s sustainable development.
Having achieved carbon neutrality and pioneered several green financial solutions, the bank has structured its ESG strategy around three core pillars: Sustainable Banking, Responsible Organization, and Community Engagement. These pillars shape its approach to integrating financial objectives with environmental and social responsibilities.
Sustainable Banking integrates ESG principles into the bank’s core business. Its Climate Transition Plan targets net-zero emissions by 2050, while its Green Financing Strategy aims to facilitate Rs100 billion in green financing. Key initiatives include the implementation of a Social and Environmental Management System and the development of a Sustainability Bond Framework to support environmentally and socially responsible projects.
The Responsible Organization pillar emphasizes internal ESG commitments. The bank remains dedicated to diversity, equity, and inclusion (DEI). Last year, women accounted for over 55% of new hires, supported by a DEI policy and employee training programmes that promote gender equality and financial inclusion.
Community Engagement addresses social and environmental needs through impactful initiatives. These include reforesting 100 hectares, planting 100,000 trees, and releasing 85,000 baby turtles into the ocean as part of a conservation effort. Additional projects encompass mangrove planting, rainwater harvesting for 160 families, and coastal restoration through the “Life to Beaches” initiative. The bank also engages in environmental research, earning recognition with the naming of a newly discovered snake species, Indotyphlops ComBank.
Manatunge highlights that by embedding these three pillars into its operations, the bank seamlessly aligns business strategies with environmental and social priorities, creating value for stakeholders.
Can you highlight some of the recent ESG initiatives and their measurable outcomes?
The bank has implemented a Climate Transition Plan in consultation with the International Finance Corporation (IFC) to achieve net-zero emissions by 2050. Key initiatives include the completion of its Trees for Tomorrow programme, fulfilling its commitment to planting 100,000 trees, with an additional 100,000 planned by the end of 2025, through a groundbreaking collaboration with the National Water Supply and Drainage Board, where trees will be planted in catchment areas. The bank has also surpassed a milestone of establishing 350 school IT labs since 2012, improving digital literacy in underserved communities. To enhance diversity and inclusion, the bank has partnered with the Asian Development Bank’s Trade and Supply Chain Finance Programme (ADB TSCFP) to improve recruitment practices and create greater accessibility for individuals with disabilities. These initiatives demonstrate the bank’s commitment to addressing environmental and social challenges while advancing its broader ESG objectives.
How is the bank supporting the transition to a greener economy in Sri Lanka?
Commercial Bank is leading the country’s transition towards a greener economy through innovative green financing initiatives. By introducing sustainable financial products and partnerships, the bank fosters environmentally responsible business practices and reinforces its sustainability commitments.
As part of its environmental responsibility, the bank developed a Green Financing Strategy. In 2018, it became the first Sri Lankan bank to establish its own Green Financing Taxonomy, providing a structured framework for classifying and tracking sustainable financial activities. In 2019, it introduced the Climate Assessment for Financial Institutions (CAFI) tool to measure and monitor the impact of its green financing initiatives. Additionally, lending facilities are screened through the Social and Environmental Management System (SEMS) to ensure environmental and social considerations are integrated into credit evaluations. The bank also pioneered Sri Lanka’s first Sustainable Bond Framework, supported by second-party verification from Sustainable Fitch and a limited assurance certificate from E&Y.
Through a collaboration with the International Finance Corporation (IFC), the bank developed a Climate Transition Plan and became the first Sri Lankan bank to join the Partnership for Carbon Accounting Financials (PCAF), enabling the assessment of its lending portfolio’s greenhouse gas (GHG) emissions.
The bank has played a pivotal role in financing renewable energy projects, including Sri Lanka’s first wind power initiative. It offers a diverse range of green financial products such as Green Leases, Green Loans, Green Homes, and Green Building Loans tailored for corporate and SME customers. The Diribala Green Development Loan is another key offering that encourages sustainability in business operations. Green Financing is directed towards renewable energy, resource efficiency, recycling, eco-friendly transportation, water conservation, climate-smart agriculture, and Green Building projects, aligning with the Central Bank of Sri Lanka’s Green Financing Taxonomy.
Partnerships with peers and industry bodies, such as the Green Building Council of Sri Lanka (GBCSL) and the Global Green Growth Institute (GGGI), underscore the bank’s commitment to fostering a green economy. These collaborative efforts promote sustainable financing and environmentally responsible business practices, inspiring stakeholders to contribute to a more sustainable future.
Beyond environmental goals, how does Commercial Bank address the social and governance aspects of ESG, such as financial inclusion?
Beyond environmental initiatives, Commercial Bank is actively strengthening the social and governance dimensions of ESG through financial inclusion, community development, and robust corporate governance.
As Sri Lanka’s leading lender to the SME sector for four consecutive years, as recognized by the Ministry of Finance, the bank plays a crucial role in supporting small businesses. The Women’s Banking Unit empowers female entrepreneurs, training over 300 women and engaging 2,700 participants through specialized events. The bank ensures gender balance in its recruitment processes and offers financial solutions tailored to underserved communities. To enhance accessibility, the bank’s SME and Agriculture Microfinancing Officers provide customized financial services, while the Bank on Wheels initiative extends banking facilities to areas without permanent branches. Digital Assistants further support customers in adopting digital banking services.
In partnership with the Asian Development Bank, the bank has also championed disability inclusion and introduced the “Grow at Home” initiative, providing saplings to employees for home growing to promote economic resilience.
In terms of governance, the bank has established an Executive Sustainability Committee, a Sustainability Working Committee, and an ESG Policy to integrate sustainability considerations into decision-making, operations, and risk management. A dedicated DEI policy fosters an inclusive workplace, and these initiatives are monitored in a structured manner to ensure measurable progress. Transparent ESG reporting further reinforces accountability and strengthens stakeholder trust.
By embedding ESG principles into its strategic framework, Commercial Bank continues to create long-term value for customers, employees, and the wider community, positioning itself as a leader in sustainable finance and responsible banking.