General Manager's Sustainability Message
BOC has sought to refine its approach to sustainability by formalizing a policy which is reviewed annually by the Sustainability Committee and approved by the Board of Directors. In executing the policy, emphasis has been placed on corporate values, stakeholder engagement, monitoring risks and impacts, policy coverage, management and governance and management disclosures in order to derive at sustainable, accountable and responsible business decisions that are reflect in all business operations of the bank.
The establishment of a Sustainability Risk Management (SRM) Framework embedded into the policy covers the gamut of the impact of risk factors in the short-term and long-term and takes remedial action to mitigate the adverse impacts and risks towards the bank. Detailed analysis is conducted every year to review the key material topics of the Bank, the impact on the Bank and the Stakeholder involvement and associated risks.
We have ensured that the bank’s Sustainability Policy has been aligned to the United Nations’ Sustainable Development Goals (SDG’s) with the vision of “sustainable development through social, environmental, and economic bottom line”.
The Bank issues a report on sustainability on an annual basis covering Bank’s contribution towards the enhancement of the economic, the environmental and the social bottom-lines. In reporting we have incorporated internationally accepted GRI standards to ensure the transparency and accountability of reporting. The Bank lays considerable emphasis on the impact of its activities across the social spectrum, particularly on its contribution to society at all levels.
Significantly, Bank of Ceylon’s mandate as ‘Bankers to the Nation’, drives the decision-making process across all measurable criteria.
Mr. W. P. Russel Fonseka
General Manager
Sustainability Policy Framework of the Bank of Ceylon
Bank of Ceylon has a fully-fledged, comprehensive Sustainability Policy which is reviewed annually by the sustainability unit, Sustainability committee, and the board of directors of the bank. Following is a brief extract of the said Sustainability Policy.
The Banking Sector is one of the cornerstone industries in the economy and plays a pivotal role in the sustainability of the planet. The role of banks in contributing toward sustainable development is potentially enormous, because of their intermediary role in an economy.
From a holistic point of view, the Bank's activities should be carried out sustainably, contributing to overall economic growth and stability whilst minimizing the negative impact on the environment or society and uplifting society. Sustainable banking requires an understanding of the "triple bottom line" – economic advancement alone is not enough, environmental protection and social stability must also be taken into consideration.
The core business strategy has been formulated with due consideration of sustainability-related risks and opportunities. Accordingly, the Bank, when developing its sustainability strategy focuses on three main dimensions of sustainability: economic, environmental, and social. "Sustainability is a Lifestyle" is the core of the Banks sustainability strategy, reflecting how the Bank operates, where sustainability is embedded in every decision taken and every activity carried out, and where every employee is encouraged to live these values.
Sustainability Vision
"Sustainable development through social, environmental and economic bottom-line"
Sustainability Mission
"To be a Responsible Corporate Citizen by operating the business in an Environmentally Responsible, Socially Equitable and Economically Sound manner"
Sustainability Goals
To ensure that the bank creates value for the society and through every decision and action taken, minimizes adverse impacts to the environment and society, to engage in meaningful and sustainable CSR initiatives that will uplift society and promote national economic growth, to inculcate socially responsible values among the bank employees.
Sustainability Objectives
- Integrate sustainability into key business decisions and initiatives
- Implement an operational process to minimize the Bank's carbon footprint
- Implement responsible waste disposal systems
- Promote renewable energy
- Implement CSR initiatives that will promote national economic growth through the Bank's strategic CSR initiatives
- Uplift society's most needy segments
- Inculcate sustainability values internally among staff
- Inculcate sustainability values externally
- Maintain healthy supplier relationships and responsible supplier contracts
- Environment and Social Risk Management through fully-fledged Environment and Social Risk Management Systems (ESMS)
- Respect HR principles in our business operations
- Financial inclusion
- Promote ethical finance
- Promote green economic growth
- Promote collaborative partnerships and no competition, with peers on sustainable issues
- Transparency and accountability
Management Approach
The management approach for Sustainable Business of BOC consists of corporate values, stakeholder engagement, identifying impacts, risks, and opportunities, policy coverage, management and governance, and management and disclosure.
Corporate values refer to the operating philosophy of the bank which caters to the public/community. Stakeholder engagement decides how the bank engages with its stakeholders in the operating environment. Identifying impacts, risks and opportunities are critical to analyzing risks and opportunities faced by the bank and mitigating those risks.
Policy coverage provides the process of establishing a bank's commitment to implement accountability as a corporate citizen. Management and governance also lead to maintaining good governance and management accountability for its stakeholders, management, and disclosures provide transparency of performance management and information to stakeholders.
This sustainability outline of BOC reflects sustainable, accountable, and responsible business within its operating environment.
Sustainable Business
Economic Sustainability
The most important aspect of the Bank’s sustainability approach is managing the impact that its operations, products/services, and customer relationships have on the national economy. BOC ensures the highest level of integrity and transparency in all its operations, whilst delivering on customers’ expectations in a fair and responsible manner.
Strategic Initiatives – Economic
- Financial inclusion
- Fiscal contribution to the Government
- Partnering on national development initiatives by funding large-scale government infrastructure projects
Environmental Sustainability
An important component of the sustainability agenda is the environment where the Bank ensures that its direct and indirect environmental impact is minimized or removed.
Minimising the Carbon Footprint of the business operations through the “Green Banking” process
- Increasing environmental literacy
- Encouraging the use of renewable energy sources
- Environmental conservation
Process of Identification and prioritization of Key Material Topics
It is important to identify the magnitude of the impact in the long term and short term and take alternative actions to mitigate those adverse impacts and risks towards the bank. Detailed analysis is conducted every year to review the key material topics of the Bank, the associated impact to the bank and the stakeholders, and the risk involved. These material topics are selected covering the Economic, Environmental, and Social triple bottom line.
The following process determines the identification of impacts and risks towards the bank and its influence on shareholder decisions. Key material topics and their impacts on the Bank and the stakeholders based on the identified risk are disclosed to the general public via the Annual Report and or website of the Bank each year. According to the impact and risks analysis, those identified risks and impact areas have been assigned among the sustainability committee members under their responsibilities in this policy to mitigate those risks and impacts. Those responsibilities are included in their action plans, and all action plans are incorporated into the corporate plan of the bank in terms of developing goals, strategies, and action items under their respective units to address risks and impact areas identified in the policy.
- Identification of issues relavant to the value creation process of the bank.
- Identifying impacts on the ability of the bank to create value in the short, medium, and long term
Determination of importance of the issues identified based on
- - likelihood of occurance
- - impact of the event if it occurs
The issues to be ranked according to their importance to the bank and the stakeholders
Matters to be reported based on outcomes of the prioratization process
Meterial Issues
| Stakeholder group | Relevant material topic | Relevant material topic | ESG guidance: CSE |
|---|---|---|---|
| Employees |
|
| Employment Training and education Occupational health and safety Workforce diversity and equal treatment |
| Customers |
|
| |
| Government/ Regulators |
|
| Compliance |
| Business Partners |
|
| |
| Other Factors |
|
| Energy intensity Direct and indirect emissions |
Material Issues
Material Issues Table
| Stakeholder group | Relevant material topic | Why it is material to BoC | Our response to the material topic during the year | Change in materiality | Corresponding reporting standards (GRI, CSE-ESG Guidance, SASB Standards for Commercial Banks) | Contribution to UN SDGs |
|---|---|---|---|---|---|---|
Customers  | 1. Customer support and business revival | The Bank has continued to lead the country’s economic recovery by supporting business revival through rescheduling/restructuring facilities, cash flow monitoring and access to finance. | Refer: Business Line Reviews. Stakeholder Outcomes: Customers | _ | SASB FN-CB-240a.1 Financial inclusion and capacity building SASB FN-CB-240a.2: Financial inclusion and capacity building | SDG 09 SDG 10 |
| 2. Customer experience | Customer service has emerged as the key differentiator in the intensely competitive banking sector of Sri Lanka | Refer: Business Line Reviews. Stakeholder Outcomes: Customers |
_ | SDG 02 | ||
| 3. Customer privacy and data security | Increased thrust towards digitisation has heightened vulnerability to customer privacy and security issues, thereby requiring organisations to strengthen IT security frameworks | Refer: Business Line Reviews. Stakeholder Outcomes: Customers | _ | GRI 418: Customer privacy SASB FN-CB-230a.2: Data security | ||
| 4. Responsible banking | Responsible lending practices underpin BoC’s ability to drive impactful socio-economic change | Refer: Business Line Reviews. Stakeholder Outcomes: Customers Stakeholder Outcomes: Community and Environment | _ | |||
| 5. Digitalisation and technology | Driving digital excellence is a key strategic aspiration for the Bank | Refer: Business Line Reviews. Stakeholder Outcomes: Customers | _ | |||
Employees  | 6. Employee health and safety | During the tail end of the pandemic in early 2022 health and safety remained an area of concern. Ensuring employee well-being in a high inflation environment was another point of concern. | Refer: Stakeholder Outcomes: Employees | _ | GRI 403: Occupational health and safety | SDG 05 SDG 08 |
| 7. Talent management and labour relations | Employees are vital in driving corporate strategy and are one of the Bank’s most valuable assets, underscoring the importance of managing employee related issues effectively. | Refer: Stakeholder Outcomes: Employees | ^ | GRI 401: Employment GRI 402: Labour/Management relations GRI 404: Training and education GRI 407: Freedom of association and collective bargaining | ||
| 8. Diversity and equal opportunity | BoC is committed to creating a diverse and inclusive workforce in which employees can thrive | Refer: Stakeholder Outcomes: Employees | _ | GRI 405: Diversity and equal opportunity | ||
| 9. Labour rights (outsourced/contract) | BoC is committed to providing a safe and conducive work environment for all outsourced and contract employees engaged by the Bank | Refer: Stakeholder Outcomes: Employees | _ | GRI 408: Child labour GRI 409: Forced or compulsory labour | ||
Community and environment  | 10. Macroeconomic developments and policy trends | Multifaceted challenges affecting Sri Lanka’s economy and related policy developments have a direct impact on the financial sector’s operations, performance and sustainability. | Refer: Operating Context PESTEL Analysis Stakeholder Outcomes: Community and Environment | _ | SDG 07 SDG12 SDG 13 SDG 15 SDG 01 | |
| 11. Climate change and environmental footprint | BoC is committed to driving down the environmental footprint of its operations while propagating sustainable practices through green lending | Refer: Stakeholder Outcomes: Community and Environment | _ | GRI 302: Energy GRI 305: Emissions SASB FN-CB-410a.2: Incorporation of ESG factors in credit analysis | SDG 03 SDG 04 | |
| 12. Brand reputation | Consistently ranked as Sri Lanka’s No.1 banking brand, the BoC brand is a key source of competitive advantage, underpinning its strong market position | Refer: Business Line Reviews. Stakeholder Outcomes: Customers | _ | SDG 06 | ||
Shareholder and fund providers  | 13. Financial performance | Critical in ensuring commercial sustainability and continued value generation to stakeholders | Refer: Financial Review Business Line Reviews Shareholder Outcomes: Stakeholder and Fund Providers | _ | SDG 12 SDG 16 SDG 17 | |
Regulators  | 14. Socio-economic contribution and financial inclusion | As a state-owned bank, BoC’s role extends beyond traditional banking to drive financial inclusion and socio-economic empowerment across the island | Refer: Stakeholder Outcomes: Community and Environment | _ | GRI 201: Economic performance GRI 202: Market presence GRI 413: Local communities GRI 203: Indirect economic impacts SASB N-CB-240a.3: Financial inclusion and capacity building SASB FN-CB-240a.4: Financial inclusion and capacity building | SDG 01 SDG11 SDG 16 |
| 15. Regulatory environment, governance and compliance | A strong compliance culture and robust corporate governance practices underpins BoC’s value creation process | Refer: Operating Context PESTEL Analysis Corporate Governance report Risk Management report Stakeholder Outcomes: Regulators | _ | GRI 207: Tax GRI 419: Socio-economic compliance GRI 307: Environmental compliance | ||
Business partners  | 16. Responsible procurement | BoC engages with a large base of suppliers and ensures responsible practices in procurement through propagation of sustainable practices | Refer: Stakeholder Outcomes: Business Partners | _ | GRI 204: Procurement practices | SDG 11 SDG 16 |
| 17. Bribery and anti-corruption | As a state-owned entity, nurturing a culture of anti-bribery and anti-corruption is vital in the responsible creation of shared value | Refer: Stakeholder Outcomes: Business Partners Corporate Governance report Embedding Sustainability | _ | GRI 205: Anti-corruption GRI 406: Non-discrimination SASB FN-CB-510a.2: Business Ethics |
Framework
Bank of Ceylon's approach to sustainability through CSR is built on best practices. The Board of Directors has the highest level of governance of sustainability in the Bank and therefore board has approved the establishment of the Sustainability Committee and the structure of which is given below.
Sustainability Committee
Sustainability Committee of the Bank
The core purpose of the Sustainability Committee is to ensure that sustainability is integrated into all key business decisions, processes and initiatives with the goal of becoming a responsible corporate citizen by operating the business in an environmentally responsible, socially equitable and economically sound manner. The committee evaluates, develops, promotes, implements and monitors sustainability principles and practices through the organisation, which will deliver value to our stakeholders.
Structure of the Sustainability Committee
The Board of Directors regularly oversees and monitors the sustainability policy implemented by the Bank through the Bank’s Sustainability Committee headed by the General Manager (Chairman of the Sustainability Committee). The management of the Bank’s sustainability activities is the responsibility of the Sustainability Committee.
Sustainability Unit of the Bank
The key functionalities of the Bank’s Sustainability Unit,
which operationalises and coordinates all sustainability aspects and CSR initiatives of the Bank, are detailed below:
🌿
Operationalise the strategic decisions/directions of the Sustainability Committee.
🌿
Enhance and streamline the Sustainability Reporting of the Bank.
🌿
Coordinate with Marketing and other relevant divisions to initiate the Bank’s CSR projects.
🌿
Coordinate with provinces and divisions to initiate CSR initiatives, and to drive and monitor those initiatives.
🌿
Coordinate and drive proposals received to partner with nationally significant, long-term CSR projects.
🌿
Suggest projects/initiatives to the Sustainability Committee to improve the sustainability footprint of the Bank.
🌿
Actively engage with relevant external expertise/represent the bank at industry forums relevant to Sustainability.
Social Sustainability
Bank of Ceylon lays great emphasis on its broader role as an enabler to the people. Within this scope, BOC continues to give back to the people through key initiatives covering education, encouraging entrepreneurship, livelihood development, while ensuring the well-being of each individual, giving our rich heritage and ancient culture its due priority within the social construct.
Strategic CSR Initiatives in the fields of
Philanthropic CSR Initiatives
Employee Relations