Protect the planet through our sustainable banking practices & operations

In an era where the interdependence of economic vitality and social responsibility is increasingly recognized, Ujjivan Small Finance Bank (USFB) stands as a testament to the symbiotic relationship between robust business performance and the stewardship of people and the planet. Our conviction is that sustainable growth is not a parallel track to financial success but its very foundation. Past years, we have been diligently working towards intertwining these elements, demonstrating that responsible banking is not only a moral undertaking but a strategic driver of our success.

Ujjivan SFB is actively engaging in research and development to understand transition risks and its impact on Retail, Agriculture and MSME segments, with a particular focus on supporting these businesses through their transitions. While transition risk is currently being evaluated, Ujjivan SFB is laying the groundwork for future inclusion in its material risk framework. Management intervention is playing a crucial role in this process, with preliminary work underway that will pave the way for policy advocacy shaped by the Bank's leadership.

The Bank has also embraced the Network for Greening the Financial System (NGFS) guidelines, conducting a qualitative scenario analysis on climate-related risks, the insights from which have been detailed in the ICAAP report submitted to the Reserve Bank of India. On Risk measurement, the Bank has attempted to quantify its severity for physical risk. 79 districts covering 192 Bank branches with a total outstanding balance of ₹7,341.5 Crores as of the reporting date were seen to be exposed to Very High or High risk as per an internal Climate Vulnerability Index (CVI) classification. This accounts for ~26% of the total exposure to Micro Banking portfolio.

The assessment focuses only on the severity aspect, should a climate induced physical risk event occur. Here again, the severity is factored using simple summation techniques under an assumption of a nationwide physical risk impact occurring at the same time; the probability of which is quite negligible. The Bank takes cognizance of the industry level challenges in assessing the probability of physical risk events since historical data cannot be leveraged to make a reasonable forecast over a decadal scale.

Therefore, the assessment of forward-looking loss estimates can only be undertaken through some form of stress testing or scenario analysis, an approach where industry best practices are yet to emerge. To mitigate what is measured and to combat the increasing climate risk in flood and drought prone areas within the micro banking sector, the Bank has set an exposure limit of 5% (as a percentage to total Micro banking exposure) on a prudential basis.

Eight districts are internally identified as vulnerable to Flood, Cyclones etc. Additionally, the Bank’s branch opening policy was also enhanced to ensure that branch opening is restricted in the Coastal Regulation Zones (CRZ) buffer limits to minimize operational and Business Continuity Risks. These limits/restrictions are regularly monitored and reported internally.

Ujjivan SFB recognises water as a critical natural resource and is committed to conserving it through efficient usage and responsible practices across its offices. The Bank has adopted a combination of technology-driven solutions and awareness programs to minimise freshwater consumption while ensuring operational efficiency. In FY 2024-25, 6.2% reduction in freshwater usage was observed. This freshwater is used only for domestic purposes such as drinking and other secondary needs, and every effort is made to optimise usage and reduce wastage.

Ujjivan SFB continues to strengthen its commitment towards sustainable practices by adopting structured waste management measures across its Corporate Office (CO), Regional Offices (RO), and branches. Housekeeping teams have been trained to ensure proper segregation, weighing, recording, and daily disposal of waste to the designated collection team. All waste is segregated at source as per its nature, recorded category-wise at corporate and regional offices, and managed in compliance with waste management standards. For waste sent to authorised vendors, Ujjivan SFB obtains certificates or documents confirming responsible disposal.

Notably, the Triprayar branch of Ujjivan SFB in Kerala was awarded a certificate for its exemplary waste management practices, demonstrating diligence in segregating waste and collaborating with the local Panchayat Waste Collection Team, Ritha Karma Sena.