Natural Capital

DFCC’s commitment to Sustainability and Environmental Capital continued with an ambitious sustainability agenda and calendar, despite the enormous challenges weathered by the banking industry in 2022.


Our Approach to Natural Capital Management

DFCC Bank has consistently strived to act responsibly with regard to the impact that we could possibly have on the environment through our business operations. Therefore, we continue to reform and update our climate action strategies to meet our stakeholder expectations on managing the environmental footprint of the Bank. The Bank has been consistent in conforming with Sustainability guidelines and best practices applicable to the banking sector. We also ensure that the projects that we fund meet the required environmental and social regulations and guidelines through the implementation of a Social and Environmental Management System (SEMS).

DFCC’s approach towards Natural Capital Management and Environmental Sustainability


Best practices during the year to manage the environmental footprint of the Bank


Sustainable Green Finance

Overview on the Bank’s Sustainable Finance Policies and Activities

One of the 3 main Sustainability Goals of DFCC Bank under its Sustainability Strategy is to be “The Bank for Green Finance”. Accordingly, the Bank set-up the following two Sub-Committees in 2020:

  • Green Finance Sub-Committee
  • Sustainable and Social Entrepreneurship Sub-Committee

The above two sub-committees, together with the Marketing and Sustainability Department also conducted many training programs to credit staff on sustainable finance. This included a series of training sessions on Sustainable and Social Entrepreneurship, conducted by Dr Kumudu Jayawardena of the University of Uva Wellassa.

CBSL’s Directives on Sustainable Finance Practices

In addition to our own sustainability policies and agenda, we have also made necessary arrangements to adhere to the initiatives of the Central Bank of Sri Lanka (CBSL) on Sustainable Finance, such as the Road Map for Sustainable Finance in Sri Lanka (2019), Sri Lanka Green Finance Taxonomy (2022) and the Banking Act Direction No. 5 of 2022 on Sustainable Finance Activities of Licensed Banks (2022).

Tagging of facilities as per the Green Finance Taxonomy published by the CBSL in May 2022 commenced during the year by the Sub-Committees on Green Finance and Sustainable and Social Entrepreneurship, together with the Marketing and Sustainability Department. Accordingly, the Bank met the quarterly reporting requirements of CBSL on Sustainable Financing Activities, as per the Banking Act Direction No. 5 of 2022 on Sustainable Finance Activities of Licensed Banks.

Bank’s Approach towards Sustainable Finance Activities and the Way Forward

As Sri Lanka’s “Pioneer Development Bank”, DFCC Bank has been the leading project financier in the country for more than 68+ years. The Bank has also been the financier of trail blazing Sri Lankan entrepreneurs, particularly during their risky early stages. DFCC Bank is still the preferred lender for “Green” development projects, including all types of Renewable Energy projects.

Building on its historical achievements in Project Financing, as well as understanding the importance of sustainable financing in the current context, the Bank has set a goal of becoming “The Bank for Green Finance” under its Sustainability Strategy 2020 – 2030. Accordingly, the Bank is making necessary structures and processes internally to achieve this goal, as well as to meet statutory and other requirements pertaining to Sustainable Finance. In addition, the Bank is also placing greater emphasis on innovation, as well as training its staff on Sustainable Finance, so as to meet the future demands in this area.

Social and Environmental Management System – SEMS

Developed and implemented by the Bank’s Sustainability Unit since 2016, the Social and Environment Management System (SEMS) ensures projects that are harmful to the environment or society are not funded by DFCC. This also encourages clients to be more vigilant about the possible impact of their actions on the environment and society. Accordingly, appropriate mitigation measures are carried out for risks identified by both the Credit Units and the Marketing and Sustainability Department at the appraisal and the monitoring stages.

SEMS Actions Adopted by DFCC Bank

  1. Environmental and Social (E&S) Checklists to be completed by Project Officers during appraisal – Mandatory for term loans over LKR 25 Mn.
  2. Inclusion of a loan condition on E&S aspects under “General Conditions” in the offer letters.
  3. E&S categorisation of all term loans over LKR 25 Mn by the Sustainability Unit at the appraisal stage.
  4. Providing comments on E&S aspects by the Sustainability Unit for all term loans over LKR 25 Mn, to be included in the Appraisal Reports.
  5. Monitoring of E&S aspects on approved facilities, especially term loans over LKR 25 Mn.
  6. Reporting on E&S aspects
  7. Internal – Credit Committee, ESMC External – Development Finance Institutions, such as Proparco and ADB.

  8. Develop and update the Exclusion List for lending.

In addition, the Sustainability Unit also acts as the “Environmental Screener” for all loans funded through the ADB Credit Line for SMEs, as well as monitoring of E&S aspects of these loans.

Given below is a summary of the E&S Risk Categorisations carried out for all term loans over LKR 25 Mn as at 31 December 2022:

Category Number of loans As a percentage of total loans
Very High Impact (A) 10 9.6%
High Impact (B) 32 30.8%
Medium Impact (C) 15 14.4%
Low Impact (D) 5 4.8%
Very Low Impact (E) 42 40.4%
Total 104 100%

Training programmes conducted on SEMS

Topic Target group Number of participants
Environmental evaluation for project lending Credit Officers 47
Training on environmental approvals Credit Officers 237

Energy Conservation and Emission Management

Our primary source of energy is grid electricity, which is the largest contributor towards our carbon footprint. Given the obvious impact of our overall carbon footprint on the environment, energy management has become a key priority, which has prompted us to measure and monitor energy consumption on a monthly basis. For this purpose, we have an “Eco Efficiency App”, developed in-house, to record and track electricity and fuel usage of DFCC, including the branch network.

The Energy Subcommittee, together with the Marketing and Sustainability Department, is tasked with implementing strategies to achieve greater energy efficiency.


Key actions taken during the year 2022 to ensure energy efficiency

Focus Key Actions
Implementation and monitoring of key tasks on energy management Progress update to the Executive Sustainability Management Committee (ESMC) by the Energy Sub-Committee
Streamlining data tracking and monitoring Introducing the “Eco Efficiency App”, which provides access to all branches to enter their energy consumption data
Awareness and Training
  • Communicating tips on efficient use of resources
  • Training on data tracking and monitoring through the Eco-Efficiency App
Reduce and control energy usage
  • Numbering switches and lights in work areas to enable staff to easily switch-on only the required lights and to switch off after work
  • Switch off sign boards as per the discretion of the Management
  • Limit lift operations before 7.30am and after 4pm
  • 100% A/C capacity during customer hours and 60% capacity in non-customer hours
  • Need to obtain prior approval for after-office work and weekend and holiday work
  • Maximum usage of natural light wherever possible
  • Energy efficient lighting solutions
Electricity savings through Renewable
Energy Sources
Installing Rooftop Solar for DFCC owned buildings – 03 buildings completed

Renewable energy usage through solar power as at 31 December 2022

Branch or location of the building System capacity (kW) Electricity generation (kWh)
Kurunegala 50 72,489
Negombo 27 36,880
Ramanayaka Mawatha 34.6 44,280

Reduce Energy Footprint – Future Outlook

  • Continue to limit air conditioning and lift usage
  • Continue to change CFL and tube-lighting into LEDs
  • Installation of rooftop solar system for the DFCC Head Office building

Moving forward to achieve one of the key sustainability goals in our Sustainability Strategy, “To be a Carbon Neutral Bank by 2030”, we have consciously taken every effort to reduce emissions across our value chain during the course of business. We promote efficient resource operations, encourage low carbon solutions, and thereby contribute towards accelerating the implementation of new climate solutions. We consider carbon footprint calculation as a key driver to manage emissions. Accordingly, we carried out a baseline assessment for the year 2022 with the consultation of RR Associates (Pvt) Ltd. based on GHG protocol guidelines and ISO 14064-1:2018 to report on the direct emissions resulting from our business activities (Scope 1), indirect emissions including purchased electricity (Scope 2) and other indirect emissions caused by employee commuting (Scope 3). As per the assessment, we did not identify any significant air emissions or emission of ozone depleting substances, pollutants and other hazardous compounds arising from our business operations.

Assessment Type: Organisational Greenhouse Gas Assessment*

Compliance: ISO 14064-1:2018

Greenhouse gas protocol – a corporate accounting and reporting standard

Reporting period: 1 January 2022 to 31 December 2022

Scope 1 –
Direct Emission 628.42 tCO2e
Scope 2 –
Indirect Emission by purchased energy 4,622.80 tCO2e
Scope 3 –
Other indirect Emission 2,501.39 tCO2e
Total Carbon footprint 7,752.61 tCO2e Emission per
employee 3.89 tCO2e

CO2 = 7729.06 tCO2e CH4 = 17.56 tCO2e N2O = 5.99 tCO2e

*Figures confirmed by RR Associates (Pvt) Ltd.

Waste Management

Towards our goal of achieving zero waste in the long term, we implemented a waste management strategy specifically for paper, food, plastic, glass and e-waste, through waste classification, segregation and recycling. At DFCC, recycling is practised in collaboration with third-party recyclers to ensure the safe disposal of different types of waste. Further, the Bank encourages reusing of furniture and chairs after repairing them instead of replacements.

Paper Waste Management

The Bank continues the 3R principles; i.e. Reduce, Reuse and Recycle to manage paper waste. The paperless initiative which commenced in 2020 has made steady progress over the years to achieve paperless targets of the Bank; 100% paperless internally by 2024 and 50% paperless externally by 2024. In addition, the collected paper waste have been recycled through Neptune Papers Private Limited.

Key actions taken

  • Installation of User Codes to printers

To avoid unnecessary printing and wastage due to uncollected printouts, all printers were installed with user codes. Further some of the printers were installed with a software that captures the number of printouts and photocopies taken by each user.

  • Paperless certification program

This is an initiative where the departments are encouraged to streamline their processes in order to eliminate paper usage by at least 85% and apply for a paperless certification for that respective process.

As at 31 December 2022 over 50 processes across 14 departments have proactively streamlined their processes from 85%-100% where respective certifications were issued and regular monitoring is being conducted.

  • Introducing the “Shared – Google Drive” to branches

Printing of certain specified documents such as reports, transaction confirmations, etc. were discontinued. Instead, the branches now save the soft copy of each document in the shared Google Drive thus reducing paper usage at branches to a great extent.

The initiative was started in October 2022 and the expected average savings amount to 917,784 A4 sheets and a cost saving of approximately LKR 3 Mn.

  • Discontinuation of 3 in 1 Printers

21 branches with 3 in 1 printers were identified and they were removed to discourage printing.

  • Installation of hand dryers in the wash rooms of the main buildings to eliminate paper towels

Key highlights on paper waste management

Savings from paperless business operations (per annum)

Quantified savings

1,223,348 sheets Saved A4 papers (Approximately)

LKR 4.1 Mn Cost savings (Approximately)

122 Saved fully grown trees (Approximately)

Savings from accounts conversion to e-statements (per annum)

Quantified savings

43,585 Total accounts Converted to e-statements

87,170 sheets Saved A4 papers (Approximately)

LKR 1.2 Mn Cost savings (Approximately)

8 Saved fully grown trees (Approximately)

Savings from waste paper recycling*

Quantified savings

4,410 Kg Total paper recycled

75 Saved fully grown trees

17,640 Kwh Saved electricity

7,740 litres Saved oil

140,150 litres Saved water

13 cubic meters Saved landfill

4,410 CO2e Greenhouse gas emission reduction

*Figures confirmed by Neptune Papers (Pvt) Ltd.


Paper waste management – Future outlook

  • Review results on implemented Google Drive.
  • Maintaining and improving the “Paperless Business operations” within departments and extending it to the branch network.
  • Launch of Phase 1 of Digital On-boarding – customer account opening shifted to the digital platform.
  • Digital Signatures – registering internal users and segments of external customers to the e-signatures platform, thereby, using it for requests, approvals and transactions.
  • Launch of e-business cards.
  • e-Statement conversion.
  • Management and reduction of paper based sanitary products.
  • Streamlining of processes at an overall level.

As a means of cementing the Bank’s paperless goal in the routine of staff members, setting paperless KPIs to the performance appraisal goals are to be considered and parameters to review to be set.

Plastic waste management – Key actions taken

Plastics and glass waste recycling commenced on the DFCC Clean-Up Day, which was held in September 2022.

We have set up plastic drop off bins at our Head Office and Ramanayaka Mawatha buildings to collect plastic waste. Collected plastic waste is handed over to Eco Spindles Pvt Limited for recycling; to manufacture yarn and filament products using waste plastics as raw material.

Water Management

This is an important focus area under the Bank’s sustainability strategy on resource efficiency. Currently the Bank continues to increase the awareness of employees on water management through internal communication platforms.

Pipe-borne water from the National Water Supply and Drainage Board is the main source of water. We use a filtered water system to provide safe drinking water facilities to all our 5 main buildings and 86% of our branch network. Measuring and monitoring consumption of water from the source, and water withdrawals will be added to the Eco Efficiency App from year 2023 onwards.

Environmental CSR Programmes

DFCC Clean Up Day

The Annual DFCC Clean-up Day 2022, coinciding with the World Clean-up Day on 17 September, was successfully concluded with the participation of DFCC team members at Head Office and branches with the motive of creating a healthier, safer and happier work environment. Teams who took part actively cleaned their office and surrounding areas, discarded unnecessary clutter and organised their workplaces. Important documents were archived, and paper and other waste were segregated and sent for recycling through partner vendors.

Promoting Home Gardening under the “Rise and Shine” Programme

With the objective of meaningfully contributing to the welfare of employees by ensuring that they remain self-sufficient during this present time of need, the Bank encouraged all staff members to engage in home gardening to meet their food needs. While this initiative provides employees with much-needed ease of access to food, it will also deepen their family engagement and happiness, enabling them to enrich both their professional and personal lives. As part of this initiative, DFCC distributed vegetable seeds packs to all employees. The Bank also organised webinars on home gardening for all employees by engaging specialised personnel in the subject for this purpose.

Training and awareness programmes on Environmental Management

Awareness Programmes Beneficiaries**
Participants in live streaming (Approximately)
Webinar on Home Gardening – Part I 85
Webinar on Home Gardening – Part II 85
Webinar on Home Gardening – Part III 85
Awareness Session on Plastic Recycling 145

**All sessions were shared via the intranet and made accessible to all employees.