This integrated Annual Report comprehensively covers the performance of Commercial Bank of Ceylon PLC for the financial year ended December 31, 2012. In reporting both financial and non-financial matters, the Bank has acted in compliance with all the provisions as stipulated by the Central Bank of Sri Lanka as well as with those of The Institute of Chartered Accountants of Sri Lanka, the Companies Act No. 07 of 2007 and the Listing Rules of the Colombo Stock Exchange. The report has also suitably adopted the Global Reporting Initiative (GRI) Guidelines (Version G3.1) and GRI's Financial Services Sector Supplement for sustainability reporting.
We believe that through integrating our Report we are able to bring together information about our strategy, governance, financial and corporate responsibility performance in a way that articulates how we create and sustain value for all our stakeholders - shareholders, customers, employees, community etc.
The Bank's inaugural sustainability supplement based on the Global Reporting Initiative (GRI) Guidelines was published in its 2009 Annual Report. It is the intention of the Bank to continue to report on sustainability initiatives based on GRI Guidelines annually.
Our Sustainability supplements in 2009 and 2010 were prepared and published based on GRI Guidelines version G3 while 2011 supplement was based on version G3.1. This year's Report has been compiled and presented in compliance with version G3.1 and GRI's Financial Services Sector Supplement. A content index has been included in this report.
In terms of GRI Guidelines, disclosures made in this Report have been drawn up to Application Level B+. Application level criteria are published in the Guidelines and are available online at www.globalreporting.org.
Inquiries and Suggestions
Your Bank will be pleased to answer any inquiry and/or provide clarification on any material contained in this Report. Your contact point at the Bank is:
The Central Accounts Department Commercial Bank of Ceylon PLC, 'Commercial House', 21, Sir Razik Fareed Mawatha, Colombo 01, Sri Lanka. email@combank.net |
The Social and Environmental performance indicators reported in our previous sustainability report covered only the activities carried out in Sri Lanka whilst they contained full disclosures on economic performance including the Bank's Bangladesh operation.
This report includes performance on all three parameters of sustainability of the Bank including its operations in Bangladesh.
The activities and performance data of the Bank's three subsidiaries - Commercial Development Co. PLC, ONEzero Co. Ltd. and Commex Sri Lanka S.R.L. and the operations of its two associates - Equity Investments Lanka Ltd. and Commercial Insurance Brokers (Pvt) Ltd., have been excluded from this Report, since they are not material in terms of their contribution to the consolidated results and the financial position of the Group, as evident from the Audited Financial Statements. It is our intention to include the operations of these entities too in our future reports in the event the disclosure of such information becomes material to our stakeholders.
Information to compile this Report has been drawn from a number of different sources, mainly the following.
Evolution of the Bank's sustainability reporting and the progress made so far are shown below.
Year | GRI Application Level | Level of declaration | Report externally assured |
Inaugural report in 2009 | 'C' | Self declared | No |
Second report in 2010 | 'B' | Self declared | Yes |
Third report in 2011 | 'B+' | Self declared | Yes |
This year, we have presented our fourth Sustainability Report which conforms to GRI Application Level 'B+' and has been subject to external verification and assurance by Det Norske Veritas AS (DNV), in addition to assurance of KPMG, Chartered Accountants, respectively.
The Bank does not have any relationship with DNV or KPMG apart from the latter's function as an Independent External Auditor of the Bank. The Bank expects to continue with the practice of seeking independent external assurance for its Sustainability Reports in the future as well to enhance the credibility of our reporting.
The content of this Report has been prepared based on two international standards:
The determination of materiality of report content has been based on meeting the expectations and perceived opinions of stakeholders gathered through various channels and engagements with them (refer Stakeholder Engagement under Corporate Governance) and its relative importance to accomplishing the Bank's Mission and competitive strategy as set out in the Corporate Plan. Therefore, this Report includes practices and performance related to issues considered to be material by both the Bank and the stakeholders.
Detailed information on selection of material issues and stakeholder dialogue is available in the Section on "Stakeholder Engagement" under Corporate Governance.
The Bank is fully aware that the linkage between sustainability and the Bank's business strategy has a significant bearing on the context within which its performance is reported.
The approach adopted by the Bank in reporting under performance indicators largely encompasses publicly available data sources where relevant and data gathered through internal sources that are of non sensitive nature.
Tabulated below are the key issues that we rate as the most material considering both importance to stakeholders and potential impact to business:
Material issue | Why is it material? |
Delivering sustainable value to customers | Delighting customer is of paramount importance to create a win-win situation for both Bank and customer |
Lending to Customers facing financial hardship | As a bank engaged in Responsible Banking, it is our duty to assess situations and provide information and solutions to help customers in hardship to manage their financial obligations with us. |
Socially and environmentally responsible lending | Banking operations could indirectly pose negative social and environment impacts through their financial exposure to vulnerable sectors, though the direct impact is expected to be minimal |
High performance culture | The Bank's high performance culture has motivated our people to raise the bar. The Bank's strategy of rewarding its team members whenever targets are met or exceeded has been highly successful. |
Working with the Best by being the employer of choice | It is vital to attract and retain a skilled and competent workforce within the Bank to generate sustainable value to all stakeholders. |
Community investment | The Bank's community investment strategy is developed within its Vision and Mission. Commercial Bank Social Responsibility Trust Fund plays a vital role in implementing this strategy . |
The concept of sustainability is increasingly becoming an integral part of the Bank's business practices. The close dialogue that we maintain with our stakeholders helped us to identify material sustainability issues both to our stakeholders and to the Bank. We have made use of these material issues to uncover challenges ahead. We set our sustainability targets to overcome these challenges whilst capitalising on opportunities that come our way. We are mindful of the fact that the relationships established with our stakeholders and the feedback we receive on these material issues will undoubtedly further improve our business practices and performance over the coming years, leading to a win-win situation for all.
Our corporate social responsibility approach is founded on this premise. It focuses on
It is pertinent to mention that our core business being provision of banking and ancillary financial services, does not have significant impact on the limited resources of the planet although the businesses and projects that our customers and suppliers engage in with the Bank, may have.
The diagram below illustrates the key challenges and opportunities to the Bank in its journey towards doing business in a sustainable manner in the short to mid term. The Heads of various business and service units of the Bank are responsible to ensure that appropriate steps are taken to address these key challenges. The target driven culture of the Bank further facilitate to set aggregate KPIs for these individuals, whilst ensuring that the key risks and challenges identified are adequately addressed. Thereafter, they are rewarded based on the achievement of pre-set targets and those who have under performed may not be paid their bonuses or receive salary enhancements and will not be considered for their progression.
The Integrated Risk Management Process of the Bank is closely linked to its sustainability journey. The Integrated Risk Management Department of the Bank headed by the Chief Risk Officer has mandated regular risk reviews for each business unit with the objective of identification of risk including those arising from sustainability trends. The Bank makes regular commitments with a view to manage such risk and to capitalise on opportunities arising from sustainability trends.
The table below demonstrates progress made by the Bank during 2012 in terms of commitments made in 2011 and our promises for 2013.
Progress on Sustainability Commitments made in 2011 and promises for 2013
The long term and strong financial performance that offers benefits for all of our stakeholders forms the basis of our sustainability performance. Our environmental, social and ethical performances also plays an important role in accomplishing this objective. Therefore, we have set commitments for sustainability areas that are material to our stakeholders as set out in the table below:
Commitments made in 2011 | Progress made in 2012 | Our promises for 2013 |
Economic Commitments |
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Achieve medium term targets as per our Corporate Plan and Budget (Refer Section on 'Financial Goals and Achievements' under Financial Highlights ) | Refer Section on 'Financial Goals and Achievements' under Financial Highlights | Achieve sustainable medium and long term targets as per our Corporate Plan and Budget for 2013 |
Environmental Commitments |
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Apply the Bank's Social and Environmental Management System (SEMS) for project financing, with targets for 2012 that included:
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Apply the Bank's SEMS for all loan financing proposals, with targets for 2013 that include:
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Due diligence at entry points and evaluation of risks of non-compliance on an ongoing basis through effective monitoring and evaluation; periodic reports to the Board Integrated Risk Management Committee | Carried out continuously. |
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Societal Commitments |
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Add satisfaction-enhancing products, features and practices by conducting periodic surveys. Follow innovations and developments in the industry and adopt accordingly. | Done on an on-going basis, via customer satisfaction surveys and launching and re-branding of products. | Continue to add satisfaction-enhancing products, features and practices by conducting periodic surveys. Follow innovations and developments in the industry and adopt accordingly. |
Talent management, staff relations and welfare policies, productivity enhancement, business partnering, improved compensation and benefits. Periodically measure employee satisfaction through surveys; improve satisfaction level in 2012. | Attention was paid to most of the areas. Staff satisfaction survey was not done. | Talent management, staff relations and welfare policies, productivity enhancement, business partnering, improved compensation and benefits. Periodically measure employee satisfaction through surveys; improve satisfaction level further in 2013. |
The Bank commits up to 1% of its Profit after Tax to the CSR Trust. The target for 2012 is to complete 100 projects that will include:
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The Bank contributed Rs. 50 Mn in 2012 making the total contribution to exceed Rs. 290 Mn since the formation of the Trust in 2003.
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The Bank commits up to 1% of its Profit after Tax to the CSR Trust. The target in 2013 is to complete another 100 projects that will include:
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