Sunday Times 2
From global pledges to local action: building Sri Lanka’s green future
View(s):By Thilal Nanayakkara
The urgent calls for action at COP29 in Baku underscored the widening gap between global climate finance commitments and actual needs. With experts estimating USD 1 trillion annually as essential for global mitigation and adaptation, events like the Strategic Briefing on Green Finance held on November 26 in Colombo have become pivotal.
Hosted by Biodiversity Sri Lanka (BSL) under the EU-funded SWITCH Asia PLASTICS Project, this forum highlighted Sri Lanka’s proactive steps to align local actions with global sustainability goals.
The Strategic Briefing brought together 32 financial institutions, encouraging them to embrace green finance as a transformative tool. Discussions centered on integrating environmental and social risks into lending processes, with insights from the Green Finance Maturity Assessment (GFMA).
Among those who addressed the conference, from left: Biodiversity Sri Lanka Chairman Dilhan Fernando, Central Bank Governor Nandalal Weerasinghe, EU Delegation chief Johann Hesse, BSL's Green Finance specialist Errol Abeyratne and Centre for a Smart Future Co-founder Anushka Wijesinghe
BSL Senior Advisor Shiranee Yasaratne emphasised the need for partnerships, noting, “Collaboration between financial institutions, donor agencies, and businesses is vital for scaling up non-traditional green finance products.”
The role of financial institutions
BSL Chairman Dilhan C. Fernando opened the session with a compelling message: “We must act urgently to bridge the biodiversity funding gap. Financial institutions have a critical role to play in enabling sustainable outcomes and preventing catastrophic climate impacts. Sri Lankan banks must tap into global financial flows with innovative solutions.”
Central Bank Governor Dr. P. Nandalal Weerasinghe underscored the importance of the Sustainable Finance Roadmap (2019) and Green Finance Taxonomy (2022) as tools for aligning financial sector practices with inclusive, green growth. He stated, “Innovative financial instruments and private sector engagement are essential for Sri Lanka’s transition to a resilient green economy.”
The EU’s Green Deal: Driving local transformation
Highlighting the European Union’s (EU) commitment, Dr. Johann Hesse, Head of Cooperation of the EU Delegation to Sri Lanka, remarked: “The EU is committed to bridging financing gaps by supporting innovative tools like green bonds, taxonomy, and capacity-building programmes to empower financial institutions and businesses.” He elaborated that EU initiatives in Sri Lanka, such as the SWITCH Asia PLASTICS Project, focus on promoting circular economies, reducing plastic waste, and scaling up green finance to foster sustainability.
The EU-funded PLASTICS project is being implemented in Sri Lanka by a dynamic consortium including ACTED, Biodiversity Sri Lanka (BSL), the Industrial Services Bureau (ISB), STENUM Asia, and the Energy and Resources Institute (TERI) of India. While the project is designed to foster sustainable and inclusive circular economy practices in Sri Lanka, it addresses key barriers to green finance by equipping financial institutions with digital tools, capacity-building initiatives, and partnerships to support small and medium enterprises (SMEs) and micro-small and medium enterprises (MSMEs) in accessing funding for sustainable projects.
Errol Abeyratne, BSL’s Green Finance Specialist, noted, “Bridging knowledge gaps in green finance unlocks significant opportunities for both businesses and banks. Non-traditional products like green credit cards and deposits are helping build momentum.” He emphasised that integrating circular economy risks into credit policies is crucial for scalable impact.
Insights on readiness for green finance
The Green Finance Maturity Assessment of Sri Lankan Financial Institutions-2024 provides critical insights into the country’s progress toward sustainable financing. The study–conducted by Centre for a Smart Future in collaboration with BSL–highlights the need for Sri Lankan financial institutions to integrate environmental considerations into their operations, with tools like the Green Finance Taxonomy and the Sustainable Finance Roadmap emerging as key frameworks.
Summarising the findings from the GFMA, Co-founder/Director, Centre for a Smart Future, Anushka Wijesinghe, remarked, “While Sri Lanka’s financial sector recognises the importance of green finance at a strategic level, there are still operational challenges in aligning lending processes with environmental goals. Addressing these gaps will be key to scaling up sustainable financing in the country.” The PLASTICS project, leveraging insights from the GFMA, continues to expand its efforts, ensuring greater access to affordable green finance for SMEs and advancing sustainability across sectors.
A call to action
COP29 underscored the urgency of local action in addressing global climate finance gaps. The Strategic Briefing not only fostered innovation but also empowered financial institutions to play a leading role in building a resilient, low-carbon Sri Lankan economy. As Dr. Johann Hesse stated, “Green finance is not just a global responsibility; it’s a local imperative.” These words resonate deeply in Sri Lanka’s current economic and environmental context, underscoring that the green transition is not merely a global agenda but a critical local responsibility.
As financial institutions grapple with unprecedented challenges and opportunities, events like the Strategic Briefing illuminate a path forward–one that blends global insights with local action. By embracing green finance, Sri Lanka’s financial sector can lead transformative change, unlocking sustainable economic growth while safeguarding the nation’s rich biodiversity and ecological resilience. Now is the time for Sri Lankan banks and financial leaders to move beyond discussions and take decisive steps to integrate green finance into their core operations, positioning the country as a regional leader in sustainable development.
(The writer is a communications specialist who focuses on biodiversity and the environment)