Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Social Responsibility
• Corporate Governance
• Human Resources
• Risk Management
• SME Development

Social Achievements

• Launched 'Viyaparika Saviya', a free advisory service for SMEs, conducting 19 workshops with over 650 participants.
• Increased staff benefits (housing, vehicle loans, medical insurance).

Governance Achievements

• Approved a comprehensive Code of Corporate Governance.
• Implemented policies and procedures on selection criteria for Directors and Key Management Personnel.
• Strengthened Board sub-committees.

Climate Goals & Targets

Environmental Challenges

• Credit ceiling of 18% imposed by the Central Bank of Sri Lanka, restricting growth.
• Increased cost of funds and intense competition in the market.
• Global economic slowdown impacting various sectors (e.g., construction).
• High interest rates affecting deposits and lending.
• Inflation rising to 7.6%.

Mitigation Strategies

• Re-analysed and adapted expansion strategies, focusing on SME portfolio growth.
• Implemented innovative strategies to grow KPIs despite credit restrictions.
• Focused on new product development and improved customer service.
• Strengthened risk management functions and internal controls.
• Introduced a new Core Banking System.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: Ernst & Young

Awards & Recognition

• Bronze title at the National Best Quality ICT awards 2012 for TV Banking.
• Certificate of Recognition in the 2012 Annual Report Competition.

Environmental Metrics

ESG Focus Areas

• Economic Performance
• Energy
• Employment/Anti-Competitive Behaviour
• Occupational Health and Safety
• Training and Education/Labour Management Relations
• Customer Privacy/Marketing and Labelling and Socio Economic Compliance
• Diversity and Equal Opportunity
• Non-discrimination/Child Labour and Forced or Compulsory Labour
• Economic Impact
• Social Impact
• Environmental Impact

Environmental Achievements

• Reduced energy consumption by 4,000 KWH of electricity; reduced water consumption by 26,497 litres; reduced oil consumption by 1,438 litres; saved 17 trees; reduced landfill by 2.3 cubic meters

Social Achievements

• Launched Union Bank Biz Partner, a tier-based value proposition for SMEs; launched Credit Cards; implemented an all-new Interactive Voice Recording (IVR) system; held the inaugural Union Bank Retail and SME Awards Ceremony; enhanced and customised product portfolio; expanded branch network to 67 branches; expanded ATM network to 117; implemented a fully automated Interactive Voice Response (IVR) system; enhanced service levels through Service Quality Management (SQM); promoted 67 staff to higher grades; conducted 158 training programmes, clocking 18576 training hours (average 15.8 hours per employee); implemented a new Learning Management System; held Avurudu celebrations, annual staff trip, Vesak ‘Bodu Bathi Gee’, Christmas Carols, Ifthar celebrations, and Navarathri celebrations; recognised long-service employees and Service Champions.

Governance Achievements

• Complied with Direction No. 11 of 2007 on Corporate Governance issued by the Central Bank of Sri Lanka; implemented a comprehensive and reliable risk management system; adopted IFRS 9 – Financial Instruments; implemented a Risk Based Segmentation Framework; reviewed and revised HR policies; implemented a market competitive sales incentive scheme; reviewed and approved the aggregate bonus payments, salary revisions and incentive schemes of Non-KMP staff; obtained the international Payment Card Industry Data Security Standard (PCI DSS) certification; implemented and complied with EMV chip-technology; reviewed and revised the Bank’s procurement policy; implemented a new website; held an Investor Forum; received a certificate of compliance at the 2018 Annual Report awards.

Climate Goals & Targets

Environmental Challenges

• Economic and political volatility resulting in moderate asset growth and deterioration in credit quality; increase in taxes leading to a slowdown in capital accretion; market limitations impacting the SME segment; slow credit growth; weakening asset quality; macroeconomic challenges faced by the sector; amendments to tax law; political instability; subdued economic activity; rupee depreciation; rising interest rates; weakening of currency; removal of tax exemption on profits earned; introduction of the Debt Repayment Levy (DRL); challenging macroeconomic framework; volatile global and capital markets; currency fluctuations; political instability; adverse impacts on the SME segment; slow economic growth; rising interest rates; withdrawal of notional tax credit on interest on government securities; significant changes in tax regulations; removal of tax concessions for the unit trust industry; flight of funds; unfavourable weather patterns; slowdown in the construction sector; political turbulence; global volatility; net outflow of USD 125 Mn from the equity markets; US Fed rate hikes; interest rates picking up; unfavourable market conditions; gloomy market conditions; decline of the ASPI; decline of the S&P SL20 index; sluggish economic growth; tightened fiscal policy; unfavourable implications from the IFRS 9 implementation; challenging year for the financial services sector; effects of political turmoil; prevalent economic and industry conditions; tightened fiscal policy and sluggish economic growth; unfavourable implications from the IFRS 9 implementation; challenging year for the financial services sector; volatilities in exchange rate, interest rates, credit growth, credit quality, and regulatory guidelines on capital and stringent provisioning standards.

Mitigation Strategies

• Strong partnerships with customers; clear focus, strategic realignment and commitment; prudent risk management; cohesive strategic plan for accelerated growth; healthy capital base; prudent risk management initiatives; focused approach based on portfolio rationalisation and customer segmentation; investments in building and leveraging its existing network; automation, enhancing the Bank’s systems and processes; omni-channel digital platforms; state of the art cash management solution; automation, process realignment and maximisation of resources; aggressive cost management efforts; maintaining and upgrading its systems and processes; realignment of subsidiaries; maintaining healthy Core Capital Ratios; complying with IFRS 9 requirements; customised strategies for key industries; enhanced and customised product portfolio; concerted efforts to maintain growth in the Bank’s liability portfolio; focused acquisition strategies; segmented product offerings coupled with relationship management; strengthened credit underwriting and timely recovery initiatives; focused revenue management and portfolio realignment; leveraging group synergies; refurbishment initiatives at several branches; introduction of Saturday banking; upgrading the Bank’s ATM network and digital banking platforms; enhanced and customised product portfolio; proactive focus on key segments and relationship management; targeted product marketing; focused strategy with enhanced relationship management; proactive focus on key segments and relationship management; prudent risk management measures; improved recovery and collection efforts; strategic lending focus on a more schematised lending model; continuous growth of both asset and liability portfolios; optimisation of the Central SME Asset Centre; centralisation of loans processing; consolidation of the Bank’s regional presence; appointing dedicated SME Relationship Managers; several training and development programmes; implementation of new work flow based process solutions and improvements to existing solutions; renewing all supplier service agreements; reviewing and revising the Bank’s procurement policy; outsourcing the warehouse and archive centres; enhancing the existing systems to deliver higher operational efficiencies; upgrading servers with advanced Security Patches; implementing a new Data Leakage Policy; enhancing the IT security framework; initiating the development of a new loan origination system; commencing a virtualisation project; investing in new Core Banking Test environment; integrated communication strategy with enhanced focus on digital platforms; enhanced underwriting standards and collections management process; review of key risk indicators; establishing of new portfolio/individual limits; review of Business Continuity Plan (BCP); conducting BCP and fire evacuation drills; implementing a Risk Assessment and Risk Treatment plan (RART); upgrading ICAAP; reviewing the Bank’s risk infrastructure; reviewing the adequacy and performance of closely related management committees; strengthening the review processes; introducing policies, procedures and tools to better manage the risks.

Supply Chain Management

Responsible Procurement

• Reviewed and revised procurement policy; preference given to local suppliers; environmental friendliness considered in supplier selection

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Third-party Assurance: Ernst & Young

Sustainable Products & Innovation

• Credit Cards
• Union Bank Biz Partner

Awards & Recognition

• Best Bank for seamless back-end Operations at the Lankapay Technovation awards 2018; two main awards at the National Sales Congress Awards (NASCO); certificate of compliance at the 2018 Annual Report awards