CBSL Chief urges $ 10.85 b climate push by 2030

• Highlights growing climate risks to agriculture, infrastructure, and financial stability, urging alignment with global disclosure standards like S1 and S2
• Warns against treating sustainability as checkbox, citing inter-institutional gaps and funding constraints as major hurdles
• Announces formation of stakeholder committees to implement roadmap and position Sri Lanka as regional leader in sustainable finance

Central Bank Governor Dr. Nandalal Weerasinghe

By Janani Kandaramage 

Central Bank Governor Dr. Nandalal Weerasinghe on Monday cautioned that Sri Lanka must mobilise an estimated $ 10.85 billion by 2030 to meet its climate commitments, underscoring the urgent need for investment in climate resilience and sustainability – an effort that is crucial for Sri Lanka’s economic recovery, acting as both a shield against future shocks and a springboard for long-term, inclusive growth.

Delivering the keynote address at the launch of the Sustainable Finance Roadmap 2.0, the CBSL Governor said the figure represents the cost of implementing the country’s Nationally Determined Contributions (NDCs) under the Paris Agreement, as the country grapples with an increasing frequency of climate-related disruptions on agriculture, infrastructure, energy, and livelihoods.

“Extreme weather events are no longer anomalies – they are the new normal, sustainable finance is not optional. It is a global imperative, and it is an imperative here in Sri Lanka,” he remarked.

“This is a critical step forward,” Dr. Weerasinghe added, labelling the initiative as pivotal to shaping a financial system that is both environmentally responsible and socially inclusive. He warned that the cost of inaction is rising as climate risks become increasingly entrenched, posing severe threats to macroeconomic and financial stability.

The new roadmap builds upon the 2019 framework and aligns with the Central Bank’s updated mandate under its recent legislative reforms, which place inclusiveness on par with financial and price stability. He believes it reflects a strategic shift, integrating both environmental and social dimensions to create a sustainable and inclusive financial ecosystem.

The roadmap outlines a comprehensive approach that goes beyond climate resilience to prioritise inclusive green financing. It places a strong focus on integrating vulnerable communities, micro, small and medium enterprises (MSMEs), and gender equity into the financial ecosystem, with Phase II of the National Financial Inclusion Strategy positioned as a key driver for economic resilience in the face of storms.

Linking the domestic challenge to the international landscape, Dr. Weerasinghe underscored the urgency for Sri Lanka’s financial sector to align with global decarbonisation efforts and new disclosure frameworks such as S1 and S2, particularly as export markets like Europe tighten climate-related regulations.

He observed that climate shocks must now be viewed through a monetary lens, pointing to inflationary risks triggered by supply chain disruptions and the threat of credit crises from non-performing portfolios in the aftermath of climate-related catastrophes.

The CBSL Governor also issued a pointed call to action for all stakeholders, noting that inter-institutional gaps and funding constraints continue to pose significant obstacles. “Sustainability cannot be treated as a checkbox. It is a national priority that demands full commitment from all corners of the financial system,” he stressed.

To ensure effective implementation, stakeholder committees and working groups will soon be established. These bodies are expected to coordinate across sectors and institutions to deliver on the roadmap’s objectives.

“The successful execution of Roadmap 2.0 will not only strengthen the foundation of our financial sector but also position Sri Lanka as a regional leader in sustainable finance,” Dr. Weerasinghe asserted, urging institutional heads and financial leaders to rise to the challenge.