First Capital Sets a New Benchmark for Sustainability in Sri Lanka’s Capital Markets

First Capital Holdings PLC, a subsidiary of JXG (Janashakthi Group) and a pioneering force in Sri Lanka’s capital markets landscape, is advancing its sustainability agenda by embedding ESG principles, responsible investment practices and strong governance frameworks into its long-term business strategy. With landmark achievements during FY2025/26, including becoming the first investment institution globally to receive the Sustainability Standards & Certification Initiative (SSCI) Certificate of Acceptance and Sri Lanka’s first investment institution to join the United Nations Global Compact (UNGC), UN Women’s Empowerment Principles (WEP) and the Partnership for Carbon Accounting Financials (PCAF), First Capital continues to strengthen its role in shaping a more responsible and resilient capital markets ecosystem.

Diluni Danushika, Head of Sustainability & Corporate Reporting at First Capital Holdings PLC, shares insights into the organisation’s sustainability strategy, the integration of ESG into decision-making, and its commitment to creating long-term value for stakeholders.

Q: Sustainability has evolved significantly within the financial services industry over the last decade. From your perspective, what role should investment institutions play in shaping a country’s sustainable economic future?

Diluni Danushika: Investment institutions hold a unique position within the economy; not as traditional lenders deploying capital from their own balance sheets, but as intermediaries, advisors and facilitators that connect investors, companies and the broader capital markets ecosystem. Our influence lies in the standards we uphold across the markets we serve: the quality of guidance we provide to investors, the governance and disclosure expectations we encourage among issuers, and the integrity of the market infrastructure we help strengthen.

For an institution like First Capital, this creates a meaningful opportunity to shape sustainable outcomes by raising market standards, embedding responsible investment principles into our advisory and investment activities, and expanding financial literacy to enable more Sri Lankans to participate confidently in capital markets.

As the sector evolves, we believe institutions that use their intermediary role to promote transparency, accountability and long-term value creation will play a defining role in shaping a sustainable economic future. Sustainability must therefore not be viewed as a separate initiative, but as a strategic lens through which every advisory engagement, investment decision, product offering and stakeholder relationship is evaluated.

Q:During FY2025/26, First Capital secured several landmark global sustainability affiliations, many of them firsts for Sri Lanka’s capital markets sector. Beyond the recognition itself, what strategic value do these affiliations create for the organisation and its stakeholders?

Diluni Danushika: While the recognition is significant, the true value of these affiliations lies in the discipline, accountability and continuous improvement they bring to our sustainability journey. Becoming the first investment institution globally to receive the Certificate of Acceptance from the Sustainability Standards & Certification Initiative (SSCI) by the European Organisation for Sustainable Development, Germany, and Sri Lanka’s first investment institution to join the United Nations Global Compact, the UN Women’s Empowerment Principles and the Partnership for Carbon Accounting Financials, has provided us with internationally recognised frameworks against which we can measure and advance our progress.

These affiliations strengthen our access to global best practices, peer networks and emerging sustainability frameworks, enabling us to benchmark our approach against leading institutions worldwide while accelerating our learning and implementation journey.

For our stakeholders including investors, clients, regulators and partners, these commitments provide independent validation that our sustainability agenda is aligned with globally recognised standards and driven by measurable outcomes rather than internal ambition alone.

Q: Sustainability is often viewed as an environmental agenda. How has First Capital redefined sustainability as a driver of long-term business resilience, governance and value creation?

Diluni Danushika: As an investment institution entrusted with managing and advising on capital, we believe governance is the foundation upon which sustainable value creation is built. Strong governance enables accountability, informed decision-making, effective risk management and long-term stakeholder confidence.

During FY2025/26, we placed significant emphasis on strengthening governance readiness by preparing our Board and senior management for the adoption of SLFRS S1 and SLFRS S2 through dedicated training and capacity-building initiatives. This ensures that sustainability-related risks and opportunities are embedded into strategic decision-making rather than treated as a separate reporting requirement.

We have also focused on aligning accountability with action by integrating sustainability-related KPIs into employee performance assessments and remuneration structures across the organisation. By connecting sustainability outcomes with performance evaluation, ESG becomes embedded into everyday decision-making and organisational behaviour.

At First Capital, we view sustainability through the lens of long-term resilience. Every investment decision requires consideration of whether a business, its governance framework and its strategy can withstand evolving environmental, social and regulatory challenges. This approach enables sustainability to serve as a strategic driver of prudent risk management, stronger governance and sustainable value creation.

Q: The financial sector is increasingly expected to influence sustainable outcomes through capital allocation rather than its own operational footprint. How do you see First Capital contributing to this transition within Sri Lanka’s capital markets?

Diluni Danushika: While reducing our own operational footprint remains important, we recognise that the greatest impact an investment institution can create is through the capital it helps mobilise and the decisions that influence capital allocation. This is why First Capital Asset Management became the first corporate entity in Sri Lanka to join the UN Principles for Responsible Investment (PRI), reflecting our commitment to integrating ESG considerations into investment analysis, portfolio construction and decision-making processes across our asset management activities.

We are progressively embedding ESG considerations into how we evaluate issuers, assess external investment opportunities and construct portfolios across our unit trusts and wealth management mandates. Our membership with the Partnership for Carbon Accounting Financials (PCAF) further strengthens this approach by enabling us to measure and understand the emissions associated with our investment activities, beyond our direct operational footprint.

Ultimately, the role of an investment institution is to influence the direction of capital towards businesses and opportunities that demonstrate long-term resilience, responsible practices and sustainable growth potential. Through this approach, First Capital aims to contribute towards the evolution of Sri Lanka’s capital markets into a more responsible and sustainable ecosystem.

Q: Climate accountability is becoming an increasingly important expectation for financial institutions worldwide. What does climate leadership mean for First Capital, and how are initiatives such as joining PCAF shaping your future approach?

Diluni Danushika: For First Capital, climate leadership begins with measurement, transparency and accountability. We believe meaningful progress requires a clear understanding of our environmental impact, because what cannot be measured cannot be effectively managed.

Traditionally, financial institutions have focused primarily on measuring their own operational emissions. However, the broader impact of the sector is significantly influenced by the emissions associated with financing and investment activities. Recognising this, First Capital became the first capital markets institution in Sri Lanka to join the Partnership for Carbon Accounting Financials (PCAF), adopting a globally recognised framework to measure greenhouse gas emissions associated with our investment and financing activities.

During the year, we verified our carbon emissions, establishing a stronger foundation for future climate-related reporting. A key priority moving forward is the incorporation of financed emissions measurement into our sustainability framework, enabling us to better understand the environmental impact associated with our investment activities and make more informed decisions.

For us, climate leadership is not defined by a single milestone or commitment. It is about embedding robust measurement, transparency and accountability into our decision-making processes, ensuring that climate considerations become an integral part of how we operate and create long-term value.

Q: First Capital has invested considerably in strengthening governance around sustainability, including preparing for SLFRS S1 and S2 reporting. Why is governance becoming one of the most critical pillars of sustainability today?

Diluni Danushika: Governance is the foundation that determines whether sustainability commitments translate into meaningful action. Environmental and social ambitions can only create lasting impact when supported by strong oversight, accountability and disciplined execution.

At First Capital, we recognise that sustainability-related financial disclosures are evolving from voluntary best practice into an increasingly important regulatory and stakeholder expectation. Therefore, during the year, we invested in preparing our Board and senior management for SLFRS S1 and SLFRS S2 through focused training and awareness programmes, ensuring leadership teams are equipped to navigate this evolving landscape.

As investors, regulators and rating agencies increasingly evaluate the quality of ESG governance, not merely the existence of sustainability policies- organisational readiness will become a key differentiator.

Our approach has also been to embed accountability throughout the organisation. By linking sustainability-related KPIs to employee performance assessments and remuneration, we have created a structure where ESG responsibility extends beyond a dedicated sustainability function and becomes part of how the entire organisation measures success.

Strong governance enables sustainability to move from commitment to execution, ensuring that responsible practices are integrated into strategic decision-making and long-term business performance.

Q: Financial inclusion remains one of the strongest social dimensions of sustainability. How do initiatives such as investED, multilingual investor forums and financial literacy programmes contribute to building a more inclusive investment ecosystem in Sri Lanka?

Diluni Danushika: A sustainable capital market must be accessible, inclusive and supported by an informed investor community. Historically, participation in Sri Lanka’s capital markets has been concentrated among a relatively limited segment of financially literate individuals, often centred around urban areas and English-speaking communities.

Through initiatives such as investED, our university outreach programme, we aim to address this gap by introducing young people to the fundamentals of investing and capital markets. The programme has engaged over 1,000 students across leading private universities, helping create awareness and confidence among future investors.

Similarly, our multilingual investor forums and Stock Talk Webinar Series are designed to make investment knowledge more accessible by communicating in Sinhala, Tamil and English, while simplifying complex financial concepts through practical and relevant discussions. In addition, our Professional Fund Management Course, conducted for students of the Department of Finance, Faculty of Commerce and Management Studies at the University of Kelaniya, supports the development of future finance professionals by providing them with practical insights into investment management and capital markets.

Financial inclusion is not simply about increasing access to investment platforms; it is about ensuring individuals across different backgrounds, regions and languages have the knowledge and confidence to make informed financial decisions. Building this understanding is essential to creating a more participatory and resilient investment ecosystem.

Q: Through FinPowerHer and your commitment to the UN Women’s Empowerment Principles, First Capital has demonstrated a focus on gender inclusion. From your perspective, how can financial institutions move beyond representation to create meaningful economic participation for women?

Diluni Danushika: At First Capital, we believe meaningful gender inclusion requires more than representation. It requires creating the knowledge, confidence and opportunities that enable women to actively participate as investors, leaders and decision-makers.

Through FinPowerHer, we seek to encourage greater engagement with financial independence and investment awareness among women by creating platforms that address barriers, build confidence and make conversations around investing more accessible.

Our approach is centred on recognising that women’s financial journeys are diverse and require solutions that reflect their unique needs and aspirations, rather than applying a one-size-fits-all approach.

Internally, our commitment to gender-balanced leadership is reflected through our own organisational practices. During the year, First Capital Holdings PLC was recognised with the award for “Higher Representation of Women on the Board,” acknowledging our continued focus on diversity, inclusivity and balanced governance.

Together with our commitment to the UN Women’s Empowerment Principles, these initiatives reinforce our belief that empowering women in finance and leadership is not only a social responsibility, but also a key contributor to stronger decision-making, innovation and sustainable organisational growth.

Q:Many organisations today have sustainability initiatives, but embedding sustainability into organisational culture remains challenging. How has First Capital approached this internally, and why is employee engagement essential to long-term success?

Diluni Danushika: At First Capital, we believe sustainability must be embedded into organisational culture rather than managed as a standalone function. Long-term success depends on ensuring that every employee understands their role in advancing responsible business practices.

During FY2025/26, we strengthened internal sustainability awareness through structured training programmes, organisation-wide communication initiatives, internal campaigns and the introduction of a dedicated Sustainability Month. These initiatives created opportunities for employees across functions to engage with environmental, social and governance priorities.

Beyond awareness creation, we have focused on embedding accountability by integrating sustainability-related KPIs into employee performance assessments and remuneration structures across the organisation. This ensures that ESG considerations become part of everyday decision-making and business execution.

Employee engagement is critical because sustainability outcomes are ultimately shaped by collective action. By building shared ownership across the organisation, we are creating a culture where sustainability is viewed not as an additional responsibility, but as an integral part of how we operate, create value and measure success.

Q: Looking beyond individual projects, how do community partnerships, entrepreneurship programmes and environmental conservation initiatives strengthen First Capital’s broader sustainability strategy?

Diluni Danushika: At First Capital, we view sustainability as a broader commitment to strengthening the ecosystems in which we operate. Our communities, the environment and the economy. While individual initiatives may address specific areas of impact, collectively they represent a consistent approach towards building long-term resilience.

Our partnerships with organisations such as WNPS PLANT, supporting forest restoration in the central highlands, environmental awareness programmes focused on plastic pollution and marine conservation, the First Capital Startup Nation collaboration with Hatch, SME advisory partnerships, and our Rs. 15 million contribution to the Rebuild Sri Lanka Fund, all reflect this broader commitment.

These initiatives are aligned with our belief that a resilient capital markets institution depends on a resilient economy, a sustainable environment and empowered communities. Supporting entrepreneurship and SMEs contributes towards strengthening the pipeline of future businesses within the economy, while environmental conservation supports the natural ecosystems that underpin key sectors and livelihoods.

Ultimately, our sustainability strategy extends beyond individual programmes. It is about creating shared value and contributing towards a more inclusive, resilient and sustainable future.

Q:Sustainability expectations from investors, regulators and customers continue to evolve rapidly. What emerging trends do you believe will most significantly shape the future of sustainable finance over the next five years?

Diluni Danushika: Several key trends will shape the evolution of sustainable finance in the years ahead.

Firstly, sustainability and climate-related disclosures are transitioning from voluntary practices to regulatory expectations. The adoption of frameworks such as SLFRS S1 and SLFRS S2 reflects a broader global movement towards greater transparency, accountability and consistency in sustainability reporting.

Secondly, the measurement of financed emissions through frameworks such as PCAF is expected to become increasingly important as financial institutions recognise that their greatest environmental impact often lies within the activities they finance and invest in.

Thirdly, the demand for high-quality, comparable ESG data will continue to increase. This will require stronger data infrastructure, enhanced analytical capabilities and greater use of technology to support more informed sustainability assessments and decision-making.

We also expect areas such as financial inclusion, gender-lens investing, and nature and biodiversity-related risks to become more integrated into mainstream ESG frameworks, particularly within emerging markets.

Ultimately, the future of sustainable finance will be defined not only by commitments made, but by how effectively organisations embed accountability, measurement and transparency into their strategies and operations.

Q: Looking ahead, First Capital has outlined priorities including operationalising financed emissions measurement and advancing SSCI High Impact Goals. What does the next phase of your sustainability journey look like, and what ambitions are you working towards over the coming years?

Diluni Danushika: Having established our sustainability foundations through global affiliations, governance strengthening and internal alignment during the past year, our next phase is focused on execution, measurement and demonstrating tangible progress.

A key priority is operationalising our PCAF-aligned financed emissions measurement framework, enabling us to move from establishing a methodology to generating meaningful insights that can support better investment decision-making. We will also continue strengthening our readiness for SLFRS S1 and S2 reporting by progressing from awareness and capability-building towards comprehensive disclosure readiness.

In parallel, we will continue advancing our SSCI High Impact Goals, translating our sustainability commitments into measurable objectives, timelines and actions that create long-term impact.

We also remain committed to deepening our financial inclusion and gender inclusion initiatives, including investED, investor awareness programmes and FinPowerHer, ensuring these platforms continue to create meaningful and sustained outcomes.

Internally, strengthening the connection between sustainability performance and organisational accountability will remain a priority, ensuring that our people, processes and incentives continue to align with our sustainability ambitions.

Ultimately, our goal is for First Capital’s sustainability journey to be recognised not by the number of commitments we make, but by the consistency, transparency and impact of the outcomes we deliver.

Q: While sustainability is often viewed through an external lens, how has First Capital embedded employee wellbeing, engagement and growth into its sustainability agenda, and what impact has this had on shaping the organisation’s long-term resilience?

Diluni Danushika: At First Capital, we believe that organisational resilience begins with the wellbeing, engagement and growth of our people. Our sustainability approach therefore extends beyond environmental and governance priorities to creating an inclusive workplace where employees are supported to perform, develop and thrive.

We have established a comprehensive framework of policies and initiatives focused on employee wellbeing, flexibility, learning and financial security. These include flexible working arrangements, work-from-home options, maternity and paternity benefits, medical and life insurance coverage, educational assistance, professional development support and financial assistance schemes including distress, housing and vehicle loans.

We have also placed strong emphasis on mental and physical wellbeing through confidential counselling support provided by a trained psychologist, annual health screenings with over 95% employee participation, and regular wellbeing initiatives focused on mindfulness and stress management. Achieving zero workplace injuries during the year further reflects our commitment to maintaining a safe and healthy work environment.

The impact of this people-centred approach is reflected in our workplace culture. During the year, First Capital achieved a 90% employee satisfaction score on the Great Place to Work® Trust Index, demonstrating the level of trust, engagement and positive employee experience built within the organisation.

We believe investing in our people is fundamental to building long-term resilience. By empowering employees with the right support, opportunities and environment to succeed, we strengthen our ability to attract, retain and develop talent while driving sustainable business performance.