May 06, Colombo (LNW): The Central Bank of Sri Lanka (CBSL) has unveiled its second roadmap for sustainable finance, signalling a renewed national push to align the country’s financial system with climate resilience and social equity goals.
Released yesterday (05), the updated strategy—dubbed Sustainable Finance Roadmap 2.0—builds on the foundation laid by its predecessor in 2019 and is intended to guide the financial sector through the next phase of sustainability integration.
This enhanced framework comes at a critical moment as Sri Lanka, like many developing nations, faces increasing threats from climate change and environmental degradation, alongside widening social vulnerabilities.
The central bank noted that these risks not only endanger economic stability but also have the potential to disrupt price stability and erode confidence in the financial system if left unaddressed.
The first roadmap, launched five years ago, laid the groundwork for embedding environmental, social, and governance (ESG) considerations into lending, investment, and regulatory practices.
It served as a blueprint for banks and financial institutions to begin evaluating the broader impacts of their operations and lending portfolios, particularly in the context of sustainable development.
The newly launched Roadmap 2.0 significantly deepens this agenda by integrating international best practices and establishing a clearer path for green financing, social investment, and the development of climate-resilient infrastructure.
The updated document outlines a series of recommendations and action points tailored for various segments of the financial sector, including banks, insurers, capital markets, and non-banking financial institutions.
Crucially, this iteration was developed through extensive consultation with a broad spectrum of stakeholders. These included the Securities and Exchange Commission of Sri Lanka (SEC), the Insurance Regulatory Commission (IRCSL), the Colombo Stock Exchange (CSE), the Sri Lanka Banks’ Association (SLBA), the Finance Houses Association (FHA), and numerous government departments and agencies.
Their collective input, the central bank noted, ensured the strategy reflects both regulatory imperatives and market realities.
The Roadmap 2.0 also calls for stronger data infrastructure, capacity building, and awareness initiatives to help financial institutions accurately assess climate risks and measure the social impact of their operations.
Amongst its more ambitious proposals is the gradual introduction of mandatory climate risk disclosures and the incorporation of sustainability criteria into prudential regulation frameworks. Officials at CBSL have stressed that moving towards a low-carbon and inclusive economy is no longer a peripheral ambition but a central tenet of financial policy.
Photo: Daily Mirror (Mirror Business)
