• USD 10.85B needed for Sri Lanka to meet its climate goals by 2030, per NDC estimates.
• New roadmap expands focus to include financial inclusion and social justice, alongside green finance.
• CBSL aligns with global trends, aiming for climate resilience through risk management and inclusive growth.

Sri Lanka doubles down on sustainable finance

Dr. P. Nandalal Weerasinghe, Governor of the Central Bank of Sri Lanka (CBSL), unveiled the Sustainable Finance Roadmap 2.0 on May 5 in Colombo. The updated roadmap marks a pivotal shift in the country’s strategy—expanding beyond green finance to include social equity, MSMEs, and gender equality as core pillars.

“Sustainable finance is no longer optional. It is an economic, social, and environmental imperative,” said Governor Weerasinghe.

From risk to resilience

The roadmap builds on CBSL’s first initiative launched in 2019 and comes amid rising global climate risks. NGFS estimates show $4.2 trillion in global financial assets are at risk, while the World Bank warns of 130 million people being pushed into poverty without urgent action.

In Sri Lanka, climate change is already straining agriculture, energy, and infrastructure. CBSL emphasized the dual threats to its price and financial stability, noting that climate disruptions can trigger inflation and non-performing loans.

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What’s new in Roadmap 2.0?

• Social sustainability is now embedded, driven by the CBSL Act’s updated mandate on inclusion.
• Emphasis on internal risk management frameworks to improve resilience within the financial system.
• Implementation of Phase II of the National Financial Inclusion Strategy, promoting Inclusive Green Finance (IGF).
• Coordination challenges and blended finance solutions remain key areas for improvement.

“Climate risk is now a financial stability issue. Our policies must reflect that reality,” Weerasinghe noted.

A call to action

CBSL urged stakeholders to support the roadmap’s implementation and continue engagement through new working groups. With sustained action, Sri Lanka aims to retain its “advancing” status under the 2024 SBFN Global Brief and lead sustainable finance efforts in the region.

“We are at a crucial juncture. Let us work together to build a resilient and inclusive financial system.”

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