The document discusses corporate social responsibility (CSR) initiatives of HNB, a large bank in Sri Lanka. It provides details of HNB's CSR programs focused on education, health, environment and entrepreneurship. It also discusses how CSR can increase profits by promoting a company's reputation and enhancing employee loyalty. The document analyzes HNB's strengths, weaknesses, opportunities and threats and proposes recommendations to further enhance the bank's sustainability and CSR strategies, such as expanding its microfinance program and investing in environmental management systems.

1. A project report submitted for the requirement of
POST OF JUNIOR EXECUTIVE/EXECUTIVE –CORPORATE SOCIAL
RESPONSIBILITY
Sep - 2016
B B SHANEL A PERERA (AIB Sri Lanka , DCM - IBSL , MBA finance –Cardiff UK )
Junior Executive -credits
HNB Moratuwa
Phone +94 11 4213075 | +94 77 3149219 | Fax +94 11 2645294 |

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Introduction
The HNB Sustainability Foundation was established in 2009 as an independent body to
manage the community development initiatives of the Bank. CSR & sustainability has
always been an vital part of how HNB .Since its operates – as the „Partner in Progress‟, HNB
has focused not only on creating access to finance, but also strived to achieve social
inclusiveness for rural communities
During this period, each and every project continued to be focused on four key pillars namely
Education, Health, Environment and Entrepreneurship and is aligned to the Millennium
Development Goals of the bank. They are managed to ensure the long term sustainability of
the business.
Sustainability management is an hour of need topic to discuss; the approach to economic,
social and environmental risk management are the most. Committed to serve all layers of
society and with careful customer segmentation provide financial access and services across
the non banking groups. Sustainability is at the heart of the Bank‟s corporate strategy. By
incorporate social responsibility into core business processes and stakeholder management,
Bank believes its ability to achieve the ultimate goal of creating both social and corporate
value.
Does Corporate Social Responsibility Increase Profits?
It is generally believes that corporate social responsibility (CSR) could increase company
profits and thus most large financial institutions are actively engaged in it. They understand
that CSR can promote, respect the company in the marketplace which can result in higher
turnover, enhance employee loyalty and greater stability to the firm.
CSR activities focusing on sustainability may lower the operational costs and improve
efficiencies. An added advantage for public quoted companies is that aggressive CSR
activities may help them gain a possible awards, international recognitions and tax benefits as
well. This may eventually improve the company‟s stock price, and profitable stock will make
shareholders happier.

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SWOT Analysis
SWOT will help companies to think & take action on environmental challenges. It pushes
companies to explore relationship with internal departments, as well as suppliers, customers,
or other stakeholders on strategies to create and sustain long-term value.
•1. The largest private sector bank in Sri Lanka which has over 250 branches
•2. 4300 staff and strong management team
•3. Staff trained at the best training center in Sri Lanka (Asia's Overall Award for
Best Results Based Trainingfor the 4th time in succession)
•4. Strong brand – Bank brand was rated as the sixth most valuable brand in Sri
Lanka by the Brand Finance Lanka 2013)
•5. Tailor made banking solution available to promote
•6. Best retail bank in Sri Lanka over the past 07 years (Asian Banker)over 128 years.
•7. Recent investment on IT developments..
•8. Over 3 million Existing customer base.
Strength
•1. Too many IT Systems.
•2. Staff retentions and retirements.
•3. Stick to out of date process.(manual statements , mortgage cancellation
process)
•4. More towards operational aspects
•5. Service gap (interns)
•6. Lack of knowledge on product and services
Weaknesses
•1. Post war development
•2. Availability of low cost funding with the liberalizing of borrowing from foreign
banks
•3. Recent changes of interest rates of government securities. Leads to gain on
margin retained.
•4. High risk in new entrants
•5. Growing remittance, apparel, agricultural sectors and SME sector.
Opportunities
•1. Central bank regulations
•2. Declining switching cost, rapid pace of changing technology and mobility
•3. Global crisis – impact on remittances
•4. Stiff completion and price war
•5. Changing buying patterns
Threats

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Stakeholder
group
Investors
Customers
EmployeesSuppliers
Community
Sustainability Vision & Strategy
Bank‟s vision “to be the acknowledged leader and chosen partner in providing financial
solutions through inspired people” is the beginning of HNB sustainability vision. Hence
sustainability is an embedded component of the business model of the bank.
Sustainable development is an ongoing and continuous process which gives a full
consideration when objectives, goals and targets are implemented, and is integrated with
governance and accountability arrangements and risk management.
Sustainability is at the very core of the Bank‟s corporate strategy. By integrating social and
environmental responsibility into core business processes and stakeholder management, the
Bank recognizes its ability to achieve the
ultimate goal of creating both social and
corporate value.
Bank is committed to serve all strata of
society and through careful customer
segmentation provide financial access and
services across the range of demographic
groups.
Sustainability management is an important precautionary approach to economic, social and
environmental risk management, careful loan covenants and adherence to the green pledge
bank integrate responsible environmental practices into our core business and serve as a
conduit for behavioral and attitudinal change in our key stakeholders.
Pillars of HNB -sustainability
Environment Conservation
Economic Performance
Community / social

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Pillars of HNB –CSR
Most of the financial institutions have a strong focus on CSR initiatives .Some of the critical
areas are covered by existing CSR projects including: Environment protection, awareness and
prevention of health risks, capacity building and youth empowerment, SME development
etc.
Education
AnnualBook donation
•Servicing of laptops donated to Visakha Nursery school
•Renovation of a HNB „Nena Pubuduwa‟ school library
in Karapitiya
•Sponsorship of 2 students for an IT Forum
•Principal sponsor of the National Trust Sri Lanka for
protecting cultural heritage
Health
•Principal sponsor of World Aids Day national programme held in
Batticaloa, with the Ministry of Health
•Sponsored a Rapid Testing Centre -over 400 individuals were
screened for HIV
•Financial assistance to selected cancer patients and maintenance of
counselling centre at the National Cancer Institute Maharagama, an
ongoing CSR project of the Bank was continued during 2015 as
well
•Birthday card project with the Paediatric unit of the National Cancer
Institute Maharagama - whereby drawings of the children at the
Paediatricunit were used in the birthday cards for staff. In return, a
payment was made to the unit to purchase expensive medicine for
the children admitted to the paediatricunit
Environment
•Environmentaland Social Management System
•The Bank‟s Environmental and Social Management System
(ESMS) provides the policy framework, implementation
process and a monitoring mechanism to ensure that the
financingextended to our customers are used to set up and
fund operations which are economically and socially
sustainable, eco friendly and do not harm bio diversity via
their outputs in the form of emissions, effluents, waste etc.
Empowering Entrepreneurs
•Empowering Entrepreneurs
•Financial Literacy and Capacity Building
•In addition to economic empowerment HNB also socially
empowers a multitude of rural communities across the
country, including those who are non-customers of HNB, via
capacity building initiatives such as programmes on
managementskills and financial literacy and establishment of
market linkages and tailor made solutions for financial
solutions.

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The process implementation of CSR activities can be segregated in to
external and internal process,
Some of the national development priorities in summery
• As an external mechanisium I have seen a lack of coordination of CSR activities among each and every
project there is an overlapping of activities; split of resources among different projects adhoc selection
of projects, while certain development areas have gained more priority than others
• Hence a better coordination to streamline CSR activities according to national priorities will:
•- Enhance the impact of CSR activities on national development
•-Avoid overlapping of programmes to ensure efficient use of resources
CSR - EXTERNAL
•Internalprocesses are to be compiled with the expected goals of the bank mission “Combining
enterprenualspirit with empowered people and leading edge technology constanttalyexceed stake
holder expectation.
CSR - INTERNAL
Financial exclusion: not delivering the financial services to the poor
segment of the society
Improving the level of nutritional energy consumption
Uplifting living standards in rural areas especially in Northern,
Eastern, Uva, North Western and Sabaragamuwa provinces
Improving connectivity through facilitating greater usage of
telephone, mobile and internet especially in rural areas
Ensuring environment sustainability by working towards reducing
CO2 emissions
Improving child and maternal health in war affected areas and estate
areas
Increasing employment opportunities for women with secondary and
higher levels of education, especially in rural areas
Improving the quality of education and education outcomes

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Creating a shared value (CSV) not CSR
Logos are crucial aspects of business marketing .Logo attach a major graphical representation
of a company brand and become the single most visible manifesto of the company within the
target market. For this reason a well design logo is an essential part of any company s overall
CSR & sustainability strategy.
Following are some of the logos proposed for HNB CSR –SUSTAINABILITY
• Agenda is determined by external reporting and personal preferences
• Citizenship , philanthropy
• Sustainability
• Doing good to the society (charitable)
• Separate from profit maximization
• In response to external pressure
CSR -CORPORATE SOCIAL RESPONSIBILITY
• Agenda is company specific and internally generated
• Joint company and value Creation
• Economic and social benefits relative to cost
• Integral to profit maximization
• Essential to challenging
CSV - CREATING SHARED VALUES

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Proposed Recommendations and strategies of been a good corporate
citizens
As one of the leading financial institutions in the country, HNB has proved the sustainability
of its operations through existence in the market since its inception as Hatton Bank in 1888.
Today, the Bank has demonstrated sustainability through diverse initiatives which are directly
linked to its core business activities, to make a greater impact on the country and the
communities in which it operates.
Community Relations
• Mechanisms to identify requirements of the community that it interacts with, including
partnerships and suppliers and response to the needs of communities. Company's overall strategy
for identifying and implementing special projects
Governance
•frameworks, structures and processes of an entity to facilitate conformance to
requirements,equity among stakeholders, ethical behavior and optimum performance
FinancialPerformance
•The performance and position of the entity measured in nancial terms
Environmental integration
•standards,compliance and measures towards greening the business processes and staff
capacity enhancement towards greening the business
Environmental Management
•Eefcient use of resources by the company and measures to reduce the environmental
foot print of the business and its clients businesses.
Economic Contribution
•the extent to which the entity contributes to the economy through investments,
employment, value creation and facilitation of regional development
Customer Relations policies
• measures to improve the products/services for the customers considering needs/satisfaction, the
extent/effectiveness in communicating all relevant information about the products/services to the
public and compliance with regulations applicable to the distribution/sale of the
products/services.
Employee Relations
• Strategies that were adopted during the year to strengthen Employee relations specially pertaining
to training, career advancement, benets and equal opportunities in employment.
Environmental value
•additionspecic eco-friendly projects carried out by the organization that are
not directly related to its normal operations

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“Good corporate citizenship is becoming increasingly important for the long-term health of
financial institutions even though most of them put great effort to show a return on their
investment from socially responsible activities “corporate citizenship is defined as go beyond
humanity and compliance, and is addressing how companies manage their social and
environmental impacts as well as their economic contribution. Corporate citizens are
accountable not just to shareholders, but also to stakeholders such as employees, customers,
suppliers, local communities and society at large.”
As a leading commercial bank in Sri Lanka, HNB‟s contribution to the economy of the
country is enormous. This contribution is not limited to the payment of taxes and funding
infrastructure projects, but creating employment directly as well as indirectly through the
customers of the Bank.
Hence, propose and recommend the enhancement of the following ongoing
initiation by the bank to more sustainability and been a good corporate
citizen
HNB‟s renowned micro-finance product ‘GamiPubuduwa’ is one of the greatest steps in the
industry towards social sustainability. A number of customers who obtained micro finance
loans under this scheme over a period of 25 years, have now grown into SME or corporate
level and make significant contributions to the country‟s economy. The Bank has been
partnering the progress of these customers not only through financing the startups and
expansions, but enhancing their capacity through workshops to improve financial literacy of
micro entrepreneurs, training programs for SMEs and facilitating buy-back schemes etc.
Sustainability for HNB also includes environment conservation and protection. Continued
investments in environmental and social management systems (ESMS) bear evidence to
how a corporate entity can contribute to environmental sustainability. These include taking
into consideration the adverse effects to the environment and society when granting loans to
customers‟ projects; investment in electronic banking solutions, investment in systems to
reduce paper usage; investments in LEED certified Green buildings, investments in advanced
technology to make the Bank‟s electricity consumption far below the industry average and
the HNB the HNB Green Pledge taken by all employees.

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