Climate Change Data

Environmental Metrics

ESG Focus Areas

• Financial Inclusion
• Environmental Sustainability
• Social Responsibility
• Governance

Environmental Achievements

• Implemented LOLC Green Programme including reforestation and solar power initiatives.
• Minimising usage of non-degradable materials at Browns Hotels & Resorts.
• Wastewater treatment plants at Browns Hospitals and some resorts.
• Recycling of lead batteries at Browns Battery division.

Social Achievements

• LOLC Care initiative supporting orphaned boys.
• Browns Shakthi CSR program.
• SAPSA Sisu Nena Pahana and Govi Nena Pahana programs for agricultural education.
• Social upliftment initiatives for plantation worker communities.
• Community support initiatives at Gal Oya Plantations (water purification plant).
• Financial education training programs in Cambodia.
• Construction of classrooms and a theatre at a primary school near Eden Resort & Spa.

Governance Achievements

• Strong corporate governance framework in compliance with CSE listing rules (with some exceptions noted in the report).
• Establishment of various board sub-committees (Audit, Remuneration, Related Party Transactions, Risk Management, Corporate Governance).
• Anti-Money Laundering training program for all employees.
• Grievance Redress Policy in place.

Climate Goals & Targets

Environmental Challenges

• Challenging macroeconomic conditions in Sri Lanka (slow economic growth, political instability).
• Impact of Easter Sunday attacks on tourism sector.
• Debt relief program impacting microfinance sector.
• Increasing NPLs in the microfinance sector.
• Competition in the financial services sector.
• Adverse weather conditions affecting agriculture and plantations.
• Exchange losses affecting Browns Tyre division.
• Downturn in the construction industry.
• Government policies impacting fertilizer and tea industries.

Mitigation Strategies

• Prudent stance towards managing lending book, focusing on good quality loans.
• Focus on collections and recoveries.
• Strengthening credit underwriting processes.
• Diversification of investments into international markets.
• Restructuring of leisure operations.
• Crop diversification in plantations.
• Introduction of new products and services.
• Investment in technology and digitalization.
• Strengthening of internal controls and risk management.

Supply Chain Management

Responsible Procurement

• Sustainable procurement guidelines for recycled content materials.

Climate-Related Risks & Opportunities

Physical Risks

• Floods and droughts

Opportunities

• Renewable energy generation

Reporting Standards

Frameworks Used: UN Global Compact

Certifications: Client Protection Principles (for microfinance), ISO 14001 (for Sierra Construction), ISO 9001 (for Sierra Construction), OHSAS 18001 (for Sierra Construction)

UN Sustainable Development Goals

• Goal 8: Decent Work and Economic Growth
• Goal 13: Climate Action

Microfinance initiatives contribute to economic growth and poverty reduction; reforestation and renewable energy initiatives contribute to climate action.

Sustainable Products & Innovation

• iPay online payment platform

Awards & Recognition

• Financial Service Provider of the Year (SLIM-Nielsen People’s Awards)
• Best Islamic Bank in Sri Lanka (IFN Awards)
• Best Islamic Leasing Provider (IFN Awards)
• Trip Advisor Awards for Excellence (for several resorts)
• CNCI Achiever Award (for Eden Resort & Spa)
• National Business Excellence Award (for Eden Resort & Spa)
• Presidential Environment (Green) Award (for Eden Resort & Spa)
• GIIRS Platinum Impact Company Rating (for LOLC Myanmar)

Environmental Metrics

ESG Focus Areas

• Financial Inclusion
• Women's Empowerment
• Environmental Responsibility
• Community Development
• Sustainable Development

Environmental Achievements

• Reduced carbon emissions by 11,000 tons through Saga Solar plant
• Planted fruit-bearing trees across 300 schools
• Generated 70% of total annual energy requirement through solar power
• Implemented energy-saving measures in various locations
• Reduced paper consumption through digital platforms

Social Achievements

• Financial inclusion initiatives benefiting many people and communities
• Empowering micro entrepreneurs to SME status
• Launched LOLC Care for underprivileged children
• Renovated Thodamaduwa Vidyalaya school
• Implemented various community development projects across Sri Lanka and overseas

Governance Achievements

• Maintained compliance with all applicable laws and regulations
• Implemented strong corporate governance framework
• Established various board sub-committees for effective oversight
• Implemented robust risk management practices
• SMART Campaign Client Protection Principles Certification for LOLC Micro Credit Limited

Climate Goals & Targets

Environmental Challenges

• Adverse economic conditions in Sri Lanka
• Easter Sunday attacks and their impact on tourism and other sectors
• COVID-19 pandemic and its impact on global and local economies
• Debt waiver in 2018 impacting microfinance sector
• Rising Non-Performing Loans (NPLs)

Mitigation Strategies

• Diversification into overseas markets
• Focus on collections and improving credit quality
• Implementation of fintech solutions
• Strengthened recovery operations
• Cost management strategies
• Government relief measures for tourism sector
• Digitalisation of businesses and expansion of digital platforms

Supply Chain Management

Responsible Procurement

• Partnering with environmentally conscious suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Adverse weather conditions impacting agriculture

Opportunities

• Renewable energy investments

Reporting Standards

Frameworks Used: UNGC

Certifications: Rainforest Alliance Certificate, ETP Certificate, SMART Campaign Client Protection Principles Certification

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 13 (Climate Action)

LOLC's initiatives contribute to these goals through renewable energy investments, financial inclusion, and community development projects.

Sustainable Products & Innovation

• Graphene-applied lead-acid battery technology
• Natural tea-waste-based dye
• Nanotech-based DNA extraction kit

Awards & Recognition

• Financial Service Provider of the Year
• One of Sri Lanka’s Most Admired Companies
• Mahaweli Entrepreneurship Presidential Award

Environmental Metrics

ESG Focus Areas

• Sustainability
• Financial Inclusion
• Women's Empowerment
• Environmental Responsibility
• Community Development
• Renewable Energy
• Green Operations

Environmental Achievements

• 76% of electricity consumed in Sri Lanka was generated by renewable energy
• Sri Lanka’s first utility scale Solar Farm (Sagasolar Power)
• Rooftop solar panels on many LOLC buildings in Sri Lanka and Myanmar branches powered entirely by solar energy
• Tree planting across 300 schools island-wide (LOLC Green initiative)
• Significant progress in converting Group properties into solar power generation buildings

Social Achievements

• Largest multi-currency, multi-geography MSME platform in the world
• Financial inclusion initiatives empowering marginalized communities
• Construction of ‘Madiwela Special Education and Home for Boys’
• Refurbishment of Thodamaduwa Vidyalaya in Galenbindunuwewa (Browns Shakthi initiative)
• CLC Diwibala Technical Assistance Programme for microfinance clients
• Various CSR projects in Pakistan, Indonesia, and Cambodia
• COVID-19 relief efforts including donations and support for affected families and communities
• No retrenchment or pay cuts for employees during the pandemic
• Investment in employee training and development

Governance Achievements

• Compliance with regulatory mandates
• Effective corporate governance framework
• Board sub-committees for oversight of financial reporting, risk management, and related party transactions
• Annual self-assessment scheme for board performance appraisal
• Signatory to the United Nations Global Compact

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting operations globally
• Economic downturn affecting various sectors
• Supply chain disruptions
• Exchange rate depreciation
• Import ban on spare parts
• Increased competition
• Regulatory changes
• Climate change impacts on agriculture
• Political upheaval in Myanmar

Mitigation Strategies

• Risk mitigation strategies including increased secured lending, reduced unsecured lending, and loan restructuring
• Digital platforms for seamless service delivery
• Concessions, moratoriums, and loan rescheduling for borrowers
• Conservative provisioning for bad and doubtful debts
• Operating properties as repatriation hotels
• Investment in technology and digitalization
• Cost management initiatives
• Strong collection efforts
• Maintaining staff salaries and benefits
• Branch expansion and product diversification
• Strategic partnerships
• Focus on asset-backed lending
• Development of organic fertilizer and alternative sourcing strategies

Supply Chain Management

Responsible Procurement

• Partnering with environmentally conscious suppliers
• Ensuring high standards in environmental protection and product quality

Climate-Related Risks & Opportunities

Physical Risks

• Climate change impacts on agriculture

Opportunities

• Renewable energy initiatives
• Development of energy-efficient products

Reporting Standards

Frameworks Used: UNGC

Certifications: ISO 9001:2015, ISO 27001:2013, ISO 20000:2018, Sri Lanka Standards certification

Third-party Assurance: Ernst & Young

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 13 (Climate Action)

Initiatives contribute to these goals through renewable energy projects, financial inclusion, women's empowerment, and community development programs.

Sustainable Products & Innovation

• Graphene-enhanced lead acid batteries
• Organic fertilizers
• Fortified rice

Awards & Recognition

• Mahaweli Entrepreneurship Presidential Award (Sagasolar)
• IFN Best Islamic Leasing Provider 2020 (LOLC Al-Falaah)
• SLIBFI Islamic Leasing Company 2020 Gold Award (LOLC Al-Falaah)
• IFFSA Islamic Leasing Company of the year 2020 Gold Award (LOLC Al-Falaah)
• IFFSA Islamic Banking Window/Unit of the year 2020 Bronze Award (LOLC Al-Falaah)
• Financial Service Provider of the year award at the SLIM-Nielsen People’s Awards 2021 (LOLC)
• Top spot in the LMD 100 ranking as the Most Profitable Listed Company in 2019/20 (LOLC)
• One of Sri Lanka’s Most Admired Companies for 2020 (LOLC)
• No. 1 Bank in Customer Service for 2020 (Seylan Bank)

Environmental Metrics

ESG Focus Areas

• Education
• Conservation
• Sustainable Financing
• Community Development
• Women's Empowerment

Environmental Achievements

• Installed a 300.44 kWp Solar Photovoltaic system at Thaala Bentota, saving approximately 440 tons of CO2 emissions annually.
• Implemented zero waste project at Gal Oya, converting solid waste into fertilizer.
• Recycled 7.3 tonnes of waste at Radisson Blu Mauritius.
• Released over 20,000 turtles back into the ocean at Reveal the Collection.
• Planted 100 trees at Radisson Blu Mauritius.

Social Achievements

• Launched ‘Divi Saviya’ project, providing school materials to over 300,000 students in 4,100 schools.
• Empowered over 1,100 female insurance agents at LOLC Life Assurance.
• Supported local communities in Mauritius through donations to SOS Children’s Village and Association des Malades et Handicapés.
• Provided food, shelter, and improved futures for at-risk children in Mauritius.
• Organized Naturalist Training Programme at Hotel Sigiriya, engaging 12 local participants.

Governance Achievements

• Completed four major mergers at LOLC Finance PLC.
• Implemented a warranty tracking system and paperless E-Warranty at Browns Battery SBU.
• Maintained all capital ratios well above regulatory requirements at SDB Bank.
• Achieved A+ (lka) stable outlook rating from Fitch for three consecutive years at Sierra Cables.
• Complied with the Listing Rules of the Colombo Stock Exchange (with some transitional provisions).

Climate Goals & Targets

Environmental Challenges

• Challenging economic environment in Sri Lanka marked by negative growth, political instability, inflation, volatile exchange rates, and high interest rates.
• High interest rates and high inflation, significant currency fluctuations in some operating countries.
• High cost of borrowing impacting businesses and consumers.
• Significant depreciation of the Sri Lankan rupee.
• High fertilizer costs and irregular weather patterns impacting tea production.

Mitigation Strategies

• Maintained a strategic focus across all business verticals.
• Increased efficiency at LOLC Finance through technological advancements and improved processes.
• Consolidated overseas Financial Services operations.
• Implemented robust plantation management practices.
• Implemented robust risk management practices to mitigate risks arising from new geographies.

Supply Chain Management

Responsible Procurement

• Sourcing from reputable suppliers for Browns Agri Solutions.
• Maintaining international relationships that support ethical supply chain management in Browns Marine SBU.

Climate-Related Risks & Opportunities

UN Sustainable Development Goals

• Goal 4 (Quality Education)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)
• Goal 1 (No Poverty)
• Goal 5 (Gender Equality)

Divi Saviya contributes to Goal 4; renewable energy initiatives and carbon emission reduction contribute to Goal 13; financial inclusion and job creation contribute to Goal 8; poverty alleviation through various initiatives contributes to Goal 1; women's empowerment initiatives contribute to Goal 5.

Sustainable Products & Innovation

• Green Concept air conditioning systems
• Hydrogel fertilizer
• Graphene applications

Awards & Recognition

• Financial Service Provider of the Year (7 consecutive years)
• Most Valuable Consumer Brand
• Most Loved Brand in the Financial Services Sector
• Gold award for Islamic Finance Non-Banking Financial Institute of the Year (4 consecutive years)
• South Asia’s Brand of the Year Gold award (3 consecutive years)
• South Asia’s Islamic NBFI of the Year (3 consecutive years)
• Excellence Award 2023 at the Yanmar Agribusiness Global Conference
• Best-displayed stall at Construct Exhibition
• Gold Award in the Electronic and Electrical products sector (3 consecutive years)
• Gold Award in the large-scale Electrical, Electronics, and Allied Sector
• Best Cable Manufacturer of the Year
• Merit Award at the Sri Lanka National Quality Awards
• Best Managed Innovative Project (Gold Award)