Year: 2025

Water: Elixir of life and strategic natural resource

Posted on by itsupport

In an age of accelerated climate change and increasing environmental stress, water is becoming an ever scarcer strategic natural resource. Water, however, is not just an elixir of life, but is also associated with natural catastrophes and geopolitical conflicts. As the granddaddy of sustainability, the water theme offers huge potential for investors. Investments in innovative water enterprises generate not just a financial return and diversification, but also a societal dividend.

Addressing environmental stress
We have an apparent superabundance of water in our corner of the world, but globally, (potable) water is a rare commodity that is becoming ever scarcer. Increasing environmental pollution caused by industrial waste, chemicals, and plastics is putting a strain on water resources around the world. At the same time, climate change is causing extreme weather events like droughts, floods, and severe storms that disrupt the natural hydrological balance and further strain an already tight water supply. Agricultural, industrial and urban overuse of water resources additionally worsens the problem and endangers entire ecosystems. These ecological challenges have far-reaching social implications.

In many developing countries, millions of people lack access to clean drinking water, which causes health risks like cholera and typhus and results in high child mortality. Women and girls particularly suffer because they often are the ones responsible for fetching water and thus miss out on educational and career opportunities.

Entire communities literally have ‘water up to their neck.’ According to the World Health Organisation (WHO), investments in clean water could prevent up to 1.6 million deaths each year. Committed governmental and corporate involvement and investment in water matters is both economically and ethically imperative.

The thirst of artificial intelligence
Water is playing an ever more important role in the technology sector. The rapid rise of artificial intelligence (AI) and cloud technologies is particularly driving up water consumption because high-performance data centres consume enormous amounts of energy and accordingly have to be efficiently cooled.

Although part of the water used to cool them can be recycled, a lot of it gets lost to evaporation. Moreover, water abstraction for data centres is often regionally concentrated, which creates additional challenges in arid areas like the US state of Arizona or parts of Spain. So, pressure is mounting on technology companies to develop more sustainable methods. Closed recirculating cooling systems, rainwater utilisation, and low-evaporation technologies are considered promising solutions for quenching AI’s thirst for water without further straining global water resources.

In addition, site selection is playing an ever bigger role in protecting water reserves. Meanwhile, investors and the public are demanding transparency, compelling companies to disclose their water consumption and to present strategies to reduce it.

Potable water from the ocean
Over 97 percent of the water on Earth is not drinkable fresh water, but is salty and unpotable. Desalination of sea water is thus widely considered one of the most promising approaches to sustainably alleviating the stress on global water resources. Advancements in areas like reverse osmosis and innovative membrane technologies enable ever more efficient treatment of salt water.

The high energy demand of desalination plants had long been a drawback, but renewable energy and heat recovery lower their consumption these days by up to 40 percent. Examples like Israel and Singapore demonstrate how quasi-autarkic water circuits can be created through a combination of desalination, sustainable water management and recycling. This can relieve traditional sources of fresh water and ease regional shortages. Rigorous research and investments in expanding these technologies in an environmentally sound way are needed to enable solutions of this kind to catch on worldwide and make water infrastructure more resilient.

Water as a growth factor
Water is a driver of economic advancement. From the food and beverage and textile sectors to semiconductor manufacturing and AI-supported data centres, virtually every industry depends on a secure water supply. The dwindling availability of ‘blue gold’ directly impacts the production capacity of entire branches of industry and can permanently slow economic growth in the regions affected. If sources of water run dry, production and economic growth stall. The OECD warns that the worsening water crisis could reduce global economic output by eight percent by the year 2050. Some developing countries could even see a 15 percent drop in economic output. Outdated water infrastructure today already causes economic costs totalling $470bn annually.

Risk factor
Water, however, is not just a growth factor, but also a risk factor. The World Bank calculates that the damage wreaked by urban flooding causes costs amounting to $120bn per annum. While builders have to ask themselves whether they want to continue building in areas threatened by water risks, insurance companies are increasingly weighing whether they still want to insure those risks in the future. For other businesses as well, water is increasingly becoming a strategic issue necessitating proactive management. Regulatory requirements are mounting, as are the penalties that loom for noncompliance. Moreover, if companies disregard sustainability in their water management practices, they also risk harming their reputation and losing the trust of investors, customers and the public.

Water – and the scarcity thereof – is also increasingly the cause of geopolitical conflicts. One example of this is the Grand Ethiopian Renaissance Dam, the construction of which is further straining the already fragile relations between Ethiopia, Egypt and Sudan because the falling water level of the Nile River threatens the livelihoods of countless people.

In Iran, in turn, persistent droughts exacerbated by decades of mismanagement are pushing people to take to the streets in mass protest while water scarcity is depopulating entire regions and fuelling social strife. Even in the US, overutilisation of the Colorado River is increasingly becoming a stress test because drastic water conservation measures are inevitable and agriculture and urban water supply networks are both reaching their limits. Diplomatic skill and foresightful policy strategies are called for to avert escalations and safeguard long-term stability.

Granddaddy of sustainability
Water can be unpredictable and immensely powerful. But humanity has also been harnessing the power of water for decades. As the granddaddy of sustainable power generation, water is compellingly convincing as a steady, dependable and flexibly deployable source of energy that does not run dry even during ‘dark doldrums’ (periods of little or no sunlight and no wind).

Hydroelectric power contributes to energy supply security and is an invaluable backbone of the energy transition. The subject of water also features prominently in the United Nations’ Sustainable Development Goals (SDGs), weaving through them like a blue ribbon due to its social, economic and environmental relevance.

Water also is explicitly mentioned in sustainability goal number six (clean water and sanitation), which unfortunately is a still a long way from being achieved. Although access to clean drinking water and sanitation is a basic human right, 2.2 billion people around the world were still denied this fundament of health and well-being in 2022.

Water is an established theme also with regard to sustainability investing. The first ‘water mutual funds’ were launched around 25 years ago. They invest predominantly in companies connected with water supply utility operation, water technology and environmental services.

The utility and industrial sectors usually make up more than 80 percent of a typical ‘water portfolio,’ which thus combines both defensive and offensive qualities and promises a good risk/reward trade-off at least on paper. However, due to the high sectoral concentration, the supposedly good risk-adjusted return comes only at the cost of having to put up with an elevated tracking error relative to the world equity market (eg MSCI All-Country World Index), and that’s if the performance promise is even kept at all.

Although active management of a thematic fund makes a lot of sense in theory because it enables one to react to subtrends and to over- or underweight fundamentally strong or weak companies, in real-world practice the majority of water fund managers do not succeed in beating the relatively simple passive water indices. Investors therefore must think about whether they have the ability to identify the best managers or should favour the more promising and cheaper alternative presented by a water ETF.

There is also a third option, though it only comes into question for active investors, and that is to discerningly pick individual water-related stocks instead of investing in a mutual fund or ETF. That way you avoid product fees, but bear the risk of active management yourself. Whatever variant an investor chooses in the end, in an era of richly valued US technology stocks, a ‘water portfolio’ not only creates a diversifying counterbalance, but may even contribute to easing an investor’s conscience.

Innovating for sustainability in the water sector

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Water and sustainability have always been inextricably linked. As our planet warms, we feel the impact of climate change through changes in water. Climate change is increasing the frequency and severity of droughts, flooding, sea level rise and other phenomena, putting the quantity and quality of our freshwater resources at risk. That is why the role of the water sector is more important than ever – innovating numerous ways to optimise this precious resource to meet our domestic, industrial and agricultural needs.

Today, DuPont Water Solutions technologies purify more than 50 million gallons of water every minute in 112 countries. While some of these water purification approaches have been trusted and used for decades, our most recent advancements are unlocking previously untapped water sources and enabling our customers to reliably treat challenging waters – including wastewater – for reuse.

Reducing the costs
With water resiliency solutions more vital than ever, water treatment innovators are in line with the overarching water sector objective – to reduce the total cost of water. This goes beyond lowering operational costs but also includes reducing the environmental footprint. While the sector embraces this need, it has often been hard to compare solutions or make the business case for modernisation for sustainability. As such, in 2024 our team introduced the Water Solutions Sustainability Navigator, a digital tool that enables users to compare how different potential water treatment solutions impact sustainability indicators, including carbon emissions, chemical usage, wastewater produced, solid waste generated, and spatial footprint – with calculations third-party verified to be in conformance with relevant ISO standards.

Our most recent advancements are unlocking previously untapped water sources

The tool compares various water treatment technologies, whether from DuPont or from other manufacturers. Currently, the tool allows users to input four different water treatment technologies – reverse osmosis, ultrafiltration, ion exchange resins, and membrane bioreactors – used alone or in combination. With many factors influencing the design and selection of water treatment solutions, the tool helps users better understand the interconnection of sustainability-driven choices and the cost of operations.

By uncovering solutions that require fewer chemicals, less energy or a smaller spatial footprint, our customers are not only reducing their impact on the planet, but also driving down the total cost of water. In one example of the tool’s use, the United Arab Emirates’ (UAE) energy strategy includes a commitment to Net Zero by 2050. This region relies on energy-intensive seawater desalination to supply freshwater and was seeking a lower carbon footprint desalination process.

A planned 320MM litre per day UAE desalination system was studied using the navigator tool, and the use of FilmTec Seamaxx RO element was estimated to provide the lowest carbon impact and energy use over its estimated five-year operating life compared to other elements in its class. In a system this size, the potential carbon impact savings over the next best element alternative were estimated at 46,000 MT CO2e.

In another example, the Sustainability Navigator was used to measure the CO2 emission savings generated by advancing the performance of reverse osmosis membranes as compared to predecessor technology.

Advancing performance
Using the World Business Council for Sustainable Development (WBCSD) Avoided Emissions Guidance, a recent case study showcases how DuPont’s commitment to advance the performance of its membranes, such as FilmTec BW30 PRO-400 reverse osmosis elements, supports the reduction of carbon emissions among their global customers.

Advanced FilmTec BW30 PRO-400 RO elements, introduced to the market in 2022, transform brackish water sources into high-quality freshwater to secure water access for industrial, energy, or municipal users while using lower operating pressures, as compared to the previous versions.

As such, these advanced membranes require three percent less energy to operate – leading to reduced carbon emissions (180 MT CO2e for a mid-sized facility over a five-year operating lifetime of the element) and costs for users.

As achieving water resiliency continues to rise in priority around the globe, DuPont’s water treatment innovations are ready to be put to work and help make more freshwater available regardless of the local water challenges.

Moreover, choosing technologies best suited to lower the cost of operations and reduce the environmental footprint is made easier through the use of the Water Solutions Sustainability Navigator. We are especially proud to be named by World Finance as the most sustainable in the water sector – increasing the sustainability of our sector will enable a more secure water future for humans in every part of the world.

How ForteBank is Shaping Kazakhstan’s Banking Future

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In the fast-evolving financial landscape of Kazakhstan, ForteBank stands as a testament to pragmatic leadership and disciplined strategy. Under the stewardship of CEO Talgat Kuanyshev, ForteBank has entered a new chapter defined by universal growth, operational excellence and international ambition. With over three decades of experience, including senior roles at ATF Bank, KassaNova Bank and ForteBank, Kuanyshev brings a clear, results-orientated approach to the institution; one that prioritises delivering tangible value in every decision.

Today, ForteBank ranks among Kazakhstan’s leading financial institutions, holding a confident market position as the fourth-largest bank in the country by assets, loans and deposits. It maintains a seven percent market share in assets and deposits and six percent in loans among privately owned banks. Its balanced portfolio spans retail, SME and corporate segments almost equally, protecting the bank from market fluctuations and ensuring resilient, sustainable expansion. This diversification has become a hallmark of ForteBank’s strategic direction.

A major milestone in the bank’s international presence was achieved in February 2025 when ForteBank became the first privately owned Kazakhstani bank in over a decade to issue Eurobonds. The $400m placement attracted more than $1bn in orders from investors across Europe, the Middle East and the Gulf, affirming the bank’s growing reputation on the global stage. These funds are being directed to finance strategic projects across industries such as transport, construction, logistics and gold production – further amplifying ForteBank’s impact on Kazakhstan’s real economy.

Redefining convenience
Digital transformation has been a cornerstone of ForteBank’s strategy. With more than 85 percent of services now offered through digital channels, and its in-house developed ForteApp boasting over 950,000 monthly active users, the bank is redefining convenience for retail and corporate clients alike. In the SME sector, ForteBusiness offers full digital onboarding for legal entities, a pioneering achievement in Kazakhstan. This digital-first approach significantly reduces onboarding time, strengthens risk controls, and allows customers across the country – including remote regions – to access high-quality banking services.

The bank’s retail operations are organised around three value propositions: ‘Forte’ for general retail customers, ‘Solo’ for affluent clients and ‘Premier’ for high-net-worth individuals. Meanwhile, the SME and corporate divisions are expanding rapidly, supported by an integrated branch network of 21 regional branches and nearly 100 service points. ForteBank’s physical infrastructure remains a critical asset, complementing its digital presence by acting as consultative centres for more complex client needs.

Positive financial figures
Financially, ForteBank’s discipline is evident: return on average equity stood at 33.1 percent by the end of 2024, while the cost-to-income ratio fell to an efficient 28.8 percent. The bank’s non-performing loans ratio declined to 3.6 percent, and total assets grew by 25.8 percent year-on-year to KZT 4.1trn ($8bn), supported by a steady rise in customer deposits. The bank’s capital adequacy ratio stood at 23.9 percent, well above the regulatory minimum, reflecting strong capitalisation and prudent risk appetite.

ForteBank evaluates every initiative against a simple but rigorous standard

One standout feature of ForteBank’s performance has been the growth in net interest income, which reached KZT 262.7bn ($510m) by year-end 2024, supported by a steadily increasing net interest margin of 7.5 percent. While maintaining this growth, the bank continues to hold a highly liquid balance sheet with 50.4 percent of total assets in liquid form, providing resilience amid external shocks.

ForteBank’s risk management framework has evolved into a strategic strength. The cost of risk decreased to 2.4 percent in 2024, while impaired loans as a share of gross loans dropped to five percent, down from 6.6 percent the year before. The bank has taken a disciplined approach to portfolio diversification and maintains a conservative exposure to high-risk sectors. Additionally, it keeps related-party lending below one percent of its total loan book, signaling a transparent and institutionally robust credit process.

Core business principles
Yet ForteBank’s ambitions extend beyond financial metrics. Its environmental, social and governance (ESG) agenda embeds sustainable principles into the core of the business. Among recent initiatives are the construction of a secondary school for 900 pupils, sponsorship of Kazakhstan’s national paralympic tennis team, environmental programmes including waste reduction and tree planting campaigns, and efforts to enhance financial literacy among vulnerable groups.

From an environmental standpoint, ForteBank has developed a green procurement policy and measures greenhouse gas emissions (Scope one and two) for both operations and pilot loan portfolios. Over 115 tons of wastepaper was collected for recycling in 2024, and the bank is transitioning to energy- and water-efficient technologies across its offices. On the social side, employee well-being programmes include voluntary health insurance, financial support for family events, and extended leave entitlements based on tenure.

ForteBank is also one of the few banks in Kazakhstan with a formal accessibility programme for customers with disabilities, including accessible branch infrastructure, a web version optimised for users with hearing or visual impairments, and ongoing front-line staff training. In 2024, ForteBank also became a participant in the financial regulator’s initiative to improve access to banking services for individuals with limited mobility, solidifying its commitment to financial inclusion.

Three core tangibles
The bank’s leadership philosophy, shaped at the board level by Chairman Timur Issatayev, is grounded in clarity and pragmatism. ForteBank evaluates every initiative against a simple but rigorous standard: if a project cannot demonstrate at least three tangible benefits – whether financial, operational, or reputational – it is reconsidered or redesigned. This disciplined approach to decision-making ensures a clear focus on outcomes over optics.

The bank’s approach to human capital is both structured and progressive

Internally, ForteBank’s culture reflects its leadership values, with strong employee engagement supported by initiatives such as preferential mortgage support and seasonal transportation programmes that foster a cohesive and motivated workforce. More than 3,850 employees work across the country, many of whom have been with the bank through multiple stages of its evolution.

The bank’s approach to human capital is both structured and progressive. Employee training and development remain a key focus area, with mandatory compliance programmes and role-specific upskilling rolled out bank-wide. Leadership talent is actively cultivated, with internal mobility and succession planning serving as central pillars of ForteBank’s long-term workforce strategy.

ForteBank’s contribution to Kazakhstan’s economy is significant not only in numbers but also in its ability to support broader development goals. Its loan portfolio – KZT 1.82trn ($3.5bn) as of January 2025 – is well diversified by sector, including manufacturing, infrastructure, retail and services. Meanwhile, its deposit base of KZT 2.87trn ($5.6bn) reflects high levels of public trust and a strong reputation for safety and reliability. Top-10 borrowers represent only 25.6 percent of the total loan portfolio, underscoring a healthy distribution of credit exposure.

Maintain and strengthen
As Kazakhstan continues its trajectory of diversified economic growth and cautious fiscal management, ForteBank is poised to maintain and strengthen its market position. The bank’s strategic priorities include increasing the loan-to-assets ratio from 42 percent to align with the market average of 57 percent, optimising the balance sheet structure, enhancing digital onboarding across segments, and growing the share of online lending.

It is also investing in AI-driven models for credit scoring and fraud detection, further improving decision-making and client protection. Performance metrics such as net promoter score (NPS) are now monitored across products and channels, serving as additional feedback loops in the bank’s client-centric operating model.

While many institutions in emerging markets are still navigating structural reforms, ForteBank has already adopted a platform-based IT landscape, enabling faster development cycles and scalability. A new mobile app tailored for business clients has been launched, while core processes across customer service, compliance, and underwriting are being automated to improve both speed and accuracy.

In an era where financial institutions must balance innovation with responsibility, ForteBank provides a model for success: leadership that values simplicity and results, a strategy rooted in universal growth, and a vision firmly anchored in the future. Empowering people, championing businesses and shaping the future – ForteBank embodies these commitments, both at home and abroad.

Bonds in Macao: the impetus of modern finance

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To address challenges of its unbalanced industrial structure, Macao has highlighted the importance of economic diversification, and prioritised modern finance, especially the bond market, as a cornerstone of its strategic transformation. Recent years have witnessed the birth, expansion and maturation of Macao’s bond market, and its progress from isolated breakthroughs to systemic advancement. With fruitful results, the construction of the bond market has enriched Macao’s financial ecosystem, and laid a solid foundation for economic diversification in the future.

Strategic expansion: high-speed growth
In 2020, the Macao SAR government first introduced the concept of ‘modern finance’ in its policy address. Later, in 2022, the ‘one plus four’ appropriate economic diversification strategy was formalised (‘one’ refers to the diversified development of the integrated tourism and leisure industry, and ‘four’ refers to four major industries: health, modern financial services, high technology and finally the convention, exhibition, trade, culture and sports industry.

Today, the financial sector has grown to become the second-largest industry in Macao, with an ecosystem led by banking and insurance, together with bonds, funds and other financial business.

The development of Macao’s bond market dates back to 2018, and in 2021 the Central Securities Depository (CSD) system was implemented. In recent years, the Macao SAR government has undertaken efforts to enhance bond issuance mechanisms, financial infrastructure, supporting laws and regulations, and the collaboration with Chinese Mainland, Hong Kong and other regions.

Nowadays, notable issuers include the Ministry of Finance of China, People’s Government of Guangdong Province, and mainstream financial institutions and enterprises. Bonds in Macao are issued in different currencies, namely in Chinese Yuan, US dollars, Hong Kong dollars and Macau Patacas. By 2024, the total value of publicly offered and listed bonds in Macao reached $100bn.

The construction of the bond market has enriched Macao’s financial ecosystem

As a mainstream local commercial bank and the Chair Institution of the Securities and Funds Industry Association of Macao, ICBC (Macau) plays a pivotal role in the development of Macao’s bond market. The bank serves in multiple capacities including issuer, institutional investor, underwriter, clearing bank, agency bank and trustee administrator, providing comprehensive services that span the entire bond market value chain.

For the past few years, the bank has witnessed important moments of Macao’s bond market, and spearheaded significant transactions. It has executed over $1bn of bond issuance across four consecutive years, making it the most active and diversified bond issuer with the largest scale of issuance among its local peers. It has also pioneered innovative products in offshore bonds, such as ‘Kung Fu Bonds,’ ‘Dim Sum Bonds,’ ‘Lotus Bonds,’ ‘Pearl Bonds’ and ‘Yulan Bonds,’ creating a multi-market and multi-product underwriting portfolio. Leveraging its advantage of a full bank license, ICBC (Macau) makes extensive investment in various bond markets.

Macao’s ascendancy in modern finance is underpinned by its unique geopolitical, institutional and policy advantages.

Geopolitical strength
As a strategic gateway between Chinese Mainland, Portuguese-speaking countries, and the Belt and Road Initiative (BRI) markets, Macao leverages its unique status as a free port, independent tariff zone, and integral part of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). In the context of China’s expanded opening-up policy, this strategic location amplifies Macao’s prominent advantage as a regional hub.

Robust market environment
Macao and its surrounding area boast a sound financial ecosystem and business-friendly climate, characterised by internationally recognised confidentiality standards, with abundant fiscal reserve and social wealth, competitive tax rates (lower than major global financial centres), and an open financial system. Its financial regulatory authority has consistently maintained an open and pragmatic regulatory stance, and supported financial innovation. By the end of 2024, international assets accounted for 83.4 percent of total assets of the banking sector in Macao.

Policy support
The Guangdong-Hong Kong-Macao Greater Bay Area is now a $1.8trn economy, which provides fertile ground for Macao’s financial development. As one of the four centre cities within the Greater Bay Area, Macao stands to gain from the diverse financial service demands and vast market of the area, which propels the growth of its modern financial sector.

Meanwhile, the deep integration between Macao and Hengqin has formed a distinctive mechanism and provided strong support for Macao’s modern financial advancement, through effectively combining Macao’s strength of internal and external connectivity and resource coordination with Hengqin’s capacity for real economy support, financial development and adequate infrastructure. As of the end of 2024, the asset management scale of fund companies in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin has reached $600bn.

Financial interconnectivity
Having successfully established Macao’s bond market ‘from zero to existence,’ it calls for market participants to further explore a pathway ‘from existence to excellence.’ Looking into the future, Macao is equipped to leverage its dual markets at home and abroad by anchoring its strategy in the bond market. Through measures such as broadening and deepening market participation, innovating product and service offerings, and cultivating a dynamic industry system, Macao will be able to enhance its market competitiveness, and achieve the strategic goal of appropriately diversified economic development.

First, Macao will focus on precise management of regional markets, including boosting bond market liquidity, strengthening fintech applications, and introducing more innovative investment products. Particularly in advancing the development of Macao’s secondary bond market, market participants could provide tailored services in areas such as valuation, trading, and funding support, in order to improve liquidity of the bond market.

In addition, Macao will leverage the development of the Greater Bay Area and its role as the platform connecting China and Portuguese-speaking countries as strategic opportunities, and continue to strengthen cooperation and exchanges with financial institutions and industry organisations in Chinese Mainland and Portuguese-speaking countries. Through measures such as cross-border collaboration, resource sharing, and the integration of complementary advantages, Macao aims to achieve synergistic effects and increase the scale of cross-border investment and financing, therefore promoting its bond market across domestic and international spheres.

Last but not least, Macao will align with the global sustainable finance initiatives, and intensify partnerships with regional and international institutions to broaden investor engagement in its bond market. Macao will also explore the application of blockchain and digital currency solutions in the bond market, to optimise cross-border connectivity, elevate total factor productivity, and strike a strategic balance between risk mitigation and growth opportunities.

Airports and climate change: risks and opportunities

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Airports are increasingly exposed to the effects of climate change, which pose significant risks to their operations, safety, economic sustainability and long-term resilience. Yet, within these challenges also lie opportunities. Aeroporti di Roma (ADR) is committed to positioning itself at the forefront of climate-related initiatives in the airport sector, aiming not only to manage risks but also to seize emerging opportunities.

As complex infrastructures, airports consist of numerous interrelated systems, each with varying degrees of exposure and sensitivity to climate hazards. Many major airports, including those managed by ADR, have been expanded over decades, and the age of certain infrastructure elements can impact their ability to withstand extreme weather events or long-term climate shifts. ADR fully recognises that climate change entails multi-dimensional risks with clear economic consequences. These include potential higher operating costs, potential declines in revenues, and reduced ability to attract investment or access capital markets.

Moreover, the anticipated intensification of climate impacts may require additional insurance coverage for critical assets and significant investments to upgrade or rebuild vulnerable infrastructure. All these economic risks are deeply linked to a company’s reputation – an essential factor in maintaining stakeholder trust and ensuring long-term financial viability. At the same time, ADR believes that climate change can generate new avenues for business development through innovation and sustainable solutions in airport operations.

Navigating climate risk
In response to these challenges, ADR has developed a comprehensive climate change risk analysis methodology, which not only aligns with international best practices such as ICAO guidelines and ISO 14091, but in many areas exceeds them. This methodology categorises climate risks into two broad types: physical risks – those directly related to climate impacts such as storms, floods, heatwaves and sea level rise – and transition risks, which arise from the global shift towards a low-carbon economy. ADR’s primary focus, for now, is on the physical risks.

ADR believes that climate change can generate new avenues for business development through innovation and sustainable solutions

The analysis process begins with a thorough screening of relevant climate hazards, using the classifications defined in the EU taxonomy. This is followed by the identification of critical airport assets – such as runways, taxiways, aprons and drainage systems – and an evaluation of their exposure, sensitivity and capacity to adapt. A dynamic risk modelling phase then assesses how these assets might be affected under different climate scenarios and time horizons, taking into account the possible implementation of mitigation measures.

This detailed and data-driven approach has enabled ADR to identify areas of possible future vulnerability, particularly under the SSP2-4.5 scenario – a ‘middle of the road’ projection in which the global average temperature could rise by around 2.7°C by the end of the century. Based on this analysis, ADR has built a robust foundation for planning and decision-making.

Building a climate adaptation plan
The results of the climate change risk analysis have guided the development of ADR’s climate adaptation plan – a strategic and forward-looking framework designed to address future challenges. The plan outlines a series of targeted measures to reduce vulnerability and enhance resilience across all areas of airport infrastructure. These interventions are aligned with broader environmental objectives and are designed to integrate where possible with emission reduction efforts.

In particular, the climate adaptation plan has produced a list of measures defined for the mitigation of the main physical risks related to climate change for Fiumicino and Ciampino airport. The list of measures can be summarised in the following categories: measures to integrate design requirements to take account of the changing climatic phenomena, integration or extension of control models (thermal or energy) or existing monitoring, integration or extension of monitoring and maintenance plans and measures to increase asset resilience against climate changes.

By integrating these technically robust and forward-looking measures, ADR’s climate adaptation plan reflects a proactive and comprehensive approach to climate resilience. It demonstrates the company’s deep commitment to sustainability, not just as a regulatory or reputational necessity, but as a strategic pillar for the future of airport operations. In doing so, ADR aims to maintain stakeholder trust and secure the long-term viability of the infrastructures under its management.

Exploring investment opportunities in Barbados

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Barbados has long been synonymous with warm hospitality, pristine beaches and a high quality of life. But beyond its natural Caribbean charm emerges a well-regulated and robust business centre that has positioned the nation as a premier jurisdiction for global business.

In a world where much uncertainty exists across the globe, the discerning investor seeks a jurisdiction that provides a welcoming investment climate, one that is grounded in substance and good governance. As the most easterly of the Caribbean islands, with a size of 166 square miles, Barbados checks the box for all this and more, while delivering a compelling value proposition.

Over the years, Barbados has evolved into a respected jurisdiction for global business, offering a diverse range of investment opportunities. These include financial services, insurance, wealth management, fintech, ICT, renewable energy and R&D, to name a few. The jurisdiction continues to offer a competitive advantage for global investors and business entities. Boasting a tradition of political and social stability and a developed legal system based on English common law, Barbados continues to attract investors near and far, who are seeking to expand their global footprint. Additionally, the jurisdiction features an expanding network of double taxation agreements with 40 countries.

Best for business
Barbados is fully committed to international best practices and adheres to global standards of transparency and tax cooperation, as endorsed by the Organisation for Economic Cooperation and Development (OECD). As such, the country’s general corporate tax rate is nine percent with some sector exceptions including small businesses earning less than $1m, taxed at five percent; international shipping, taxed at 5.5 percent to one percent on a sliding scale; and insurance, with class one entities taxed at zero percent and classes two and three at two percent.

Furthermore, another major development in Barbados, influenced by the OECD’s base erosion and profit shifting (BEPS) pillar two tax initiative, has been the introduction of a 15 percent qualified domestic minimum top-up tax, which is applied to in-scope large multinational enterprise (MNE) groups with annual consolidated revenue of at least €750m. Barbados has also since signed the multilateral convention to facilitate the implementation of the pillar two subject to tax rule. Investments in R&D activities also benefit from a refundable R&D credit of 50 percent of eligible expenditure. Qualifying activities span fields such as medical sciences, engineering and technology, natural sciences and financial technology. Additionally, income arising from intellectual property located in Barbados is subject to a favourable tax rate of 4.5 percent. These reforms signal Barbados’ continued commitment to ensuring a level playing field for MNEs, while strengthening the nation’s corporate tax system in the process. Barbados’ value proposition for business goes beyond compliance.

What sets Barbados apart is not only the strategic benefits of doing business but the fact that its workforce is well educated and its people are warm, friendly and welcoming. Investors will also find Barbados to be a location that offers a talented and available pool of qualified industry professionals, excellent physical infrastructure including a modern seaport and international airport with efficient air connectivity, as well as a sound ICT infrastructure with fibre-optic high-speed internet. Barbados also offers an attractive option for high-net-worth individuals including quality healthcare facilities and a range of accommodation (from budget to luxury) and other amenities.

Additionally, the Barbados government has made significant strides in digital transformation with initiatives that seek to simplify the process of doing business and enhance the ease of access to services.

Living the island life
When you add the jurisdiction’s delectable cuisine, lively arts and music culture, as well as its year-round sunshine to the mix, Barbados offers a compelling alignment of opportunity and quality of life. In fact, the jurisdiction has emerged as an attractive location for remote work and digital nomads. The Welcome Stamp, a 12-month visa for remote workers, serves as an added bonus for business professionals who value lifestyle, connectivity and stability – key components of the Barbados brand and an ideal place to live and work.

Indeed, Barbados isn’t just a destination; it is an experience and an informed choice. Whether you are an MNE considering expansion to a safe and thriving domicile or an entrepreneur ready to scale globally, consider Barbados, a welcoming investment climate that facilitates investment, partnership and growth.

There is no better time than now to explore the opportunities. Further information can be found at www.InvestBarbados.org

AI 2.0: The hype is over and it is time to monetise

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The summer of 2025 brings a noticeable shift in the financial markets, especially for companies that may have relied too heavily on the now-familiar two-letter acronym – AI. A couple of years ago, investors were buzzing with euphoria around artificial intelligence plays. Just the mention of AI in the earnings call could inflate valuations. This year, investor sentiment has evolved. Capturing investor attention today requires more than hype and ambitious growth projections – it demands solid earnings growth.

The first wave: narrative over numbers
The first wave of AI enthusiasm, spanning 2023 and 2024, was driven by compelling narratives and substantial investment inflows – amounting to hundreds of billions of dollars. Many companies capitalised on the excitement, often without the earnings to justify the momentum. An elite group of seven companies didn’t need blockbuster profits to attract matching inflows.

Their rocketing valuations were driven more by future potential rather than present performance. These seven names – Microsoft, Google parent Alphabet, Tesla, Amazon, Apple, Facebook parent Meta and Nvidia – emerged as the chief architects of the AI-fuelled revolution and saw their share prices soar to record highs. Collectively known as the ‘Magnificent Seven,’ they are the tech giants that are in a race to build the infrastructure layer so AI can thrive.

What is the common ground between the first six companies? They are all major customers of Nvidia, apart from Apple, which spends a tiny amount of money on Nvidia hardware. All the rest are buying boatloads of Nvidia chips to train their large language models (LLMs) and fuel their AI capabilities. This is how Nvidia sparked the AI rally – and the gains followed.

Is Nvidia losing investor confidence?
Nvidia’s shares were up 239 percent in 2023 and another 171 percent in 2024. However, despite strong fundamentals, the tech heavy-weight has been struggling to gain traction in 2025. At the start of the year, a whopping 114 percent annual revenue increase was not enough to get traders and investors racing to load up on the shares. Nvidia reported $130.5bn in revenue for 2024 (fiscal 2025) – more than double the $60.9bn it posted the previous year.

The companies that can turn AI innovation into consistent, long-term profits will stand out

Investors’ reaction? A few polite claps, some yawns, and just enough buying momentum to keep Nvidia’s shares steady after the February 26 earnings report, which included fiscal 2025 performance. The market’s muted response suggested that even sky-high expectations may have already been priced in. Does this mean investors are becoming less interested in fundamentals and more attached to the idea of stratospheric growth? After all, Nvidia set the bar high in the fourth quarter of 2023, crushing Wall Street’s expectations with an explosive 265 percent year-over-year revenue jump.

As the AI sector evolves, differentiation will be key. Investors are now paying closer attention to fundamentals: sustainable margins, monetisation strategies, and disciplined capital spending. The companies that can turn AI innovation into consistent, long-term profits will stand out. At the same time, others may struggle to justify their elevated valuations in a market that’s increasingly focused on earnings. Before those earnings have a chance to materialise, some spending must take place – and given time to yield results.

Capex: A hero or a villain?
Capital expenditures, or capex, refer to the amount of money a company allocates for investment in innovation, upgrades and new assets like hardware or software. In the context of AI, companies usually spend on purchasing high-performance computing hardware and building data centres to support it. Unlike operating expenses, which cover day-to-day costs, capex is focused on projects that are expected to deliver value over years, even decades.

Capex does not always sit well with investors, because these kinds of investments require patience and long-term vision. This is where the market tends to split – between those with the discipline to wait for long-term value and those chasing quick wins.

The year of big investments
That is a distinction the market’s biggest players appear to understand well – even if it means being misunderstood by investors. The Magnificent Seven has turned this year into a year of bold investments, showing a solid conviction in the future of artificial intelligence through record levels of capital expenditure.

Microsoft has committed $80bn to expand its data centres and build its AI infrastructure. This daring investment effort is designed to power its Azure cloud platform and its broader enterprise ecosystem. Microsoft’s AI chatbot Copilot is expected to become a mainstay tool for both businesses and consumers aiming to optimise their workflow and daily tasks.

As an early backer of ChatGPT parent OpenAI, in which it holds a 49 percent stake following a bold $13bn bet, Microsoft has positioned itself front and centre in the generative AI space. Close behind is Google’s parent Alphabet, which has earmarked around $75bn for similar initiatives. The commitment reinforces the search giant’s position in AI research and cloud services.

The Magnificent Seven has turned this year into a year of bold investments

A significant portion of it supports the development of Gemini – Google’s flagship generative AI model and a direct competitor to both ChatGPT and Copilot. Amazon is making the boldest move of all, with capital expenditures exceeding $100bn for 2025. Much of that spending will be funnelled into AI infrastructure for Amazon Web Services (AWS) – the backbone of its enterprise operations and a major driver of its profitability.

Similarly, Meta has revised its outlook sharply upwards, committing a totoal of between $60bn and $65bn – a nearly 70 percent increase over prior projections. The lion’s share of that big-ticket spending will go towards building warehouse-size data centres to power the AI products across the company’s apps, which include Facebook, Instagram and WhatsApp.

The rest of the Magnificent Seven group, Apple, Tesla and Nvidia, have not disclosed official capex projections. Still, their forward guidance and spending activity suggests continued, sizable investment in AI and related technologies. For Apple, the focus is on developing AI-enabled iPhones powered by Apple Intelligence, the tech titan’s way of catching up in the AI race. For Tesla, it is the autonomous driving capabilities through Full Self-Driving, the EV maker’s highest-level driver assistance software.

For Nvidia, it is about the continued innovation in GPU and chip manufacturing, with Blackwell as the next big thing that should keep demand growing. These are only some of the ways these tech leaders are positioning themselves for long-term relevance.

A new era in the works
Taken together, this wave of capital investment in 2025 – totaling over $300bn among the top players alone – signals more than just an optimistic note. It reflects a fundamental shift in how value will be created in the coming decade.

Despite market volatility, occasional pushbacks from investors, and macroeconomic challenges, these firms are not backing down on their bold investment initiatives. Instead, they are doubling down – investing today for tomorrow’s growth, fully aware that the returns may take time to materialise.

In AI 1.0, markets rewarded guidance and expectations. In AI 2.0, they reward performance. The speculative phase has given way to operational discipline and value creation rooted in the adoption of new technology.

High interest rates, compared to just four years ago, have reintroduced the idea that capital comes at a cost. This has brought a sharp focus on those who hold the upper hand. The big infrastructure players, with their pricing power and established supply chains, are the main winners.

What to expect in 2026
After a couple of years defined by euphoric share-price gains, followed by a breakneck rush to lay out infrastructure, the market is entering a new chapter – one grounded in execution, efficiency, and results. As we look ahead to 2026, three trends are likely to influence the AI earnings cycle.

Firstly, enterprise adoption becomes the real litmus test. Are companies paying for AI at scale? Are workflows evolving in ways that are both meaningful and monetisable? Do consumers need AI daily? These questions will take centre stage.

Secondly, margins will come under pressure. Infrastructure costs are high, and energy prices are rising. Companies with leaner and more efficient models will be better positioned to maintain profitability.

And thirdly, competitive moats will start to matter more. In the early innings of the AI race, ambition and access to capital were enough to keep companies in the game. By 2026, investors will want clear answers: Who owns the data? Who controls distribution? Who has proprietary models, scale advantages, or ecosystem lock-in?
As the space matures, staying power – not just innovation – will separate the frontrunners from the fading hype.

Futureproofing health: why recovery is the new performance benchmark

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Preventative health is no longer an abstract concept – it is quickly becoming the foundation of personal and professional performance. As the global wellness economy surpasses $6trn and continues to expand, businesses, athletes and individuals alike are seeking ways to invest in their longevity, vitality and resilience. At CTN, we have embraced this shift, developing advanced cryotherapy and wellness solutions that make recovery accessible, safe and impactful for everyone.

Historically, recovery treatments such as cryotherapy and hyperbaric oxygen therapy were confined to elite athletic circles and specialised medical facilities. Today, thanks to innovation and technological refinement, these solutions are entering mainstream wellness spaces, corporate environments and even private homes. This democratisation of recovery is setting a new standard for how we care for our bodies and minds – and CTN is proud to be at the forefront of this evolution.

One of the most significant developments in our sector has been the shift from invasive, medically supervised treatments to safe, non-medical recovery technologies that fit seamlessly into modern lifestyles.

CTN’s cryotherapy devices, such as the X°CRYO for targeted cryotherapy and the e°CABIN for whole-body cryotherapy treatments, offer professional-grade results without the risks associated with traditional liquid nitrogen systems. Our mild hyperbaric oxygen therapy device, OxyPro, and our LedPro red light therapy solution further expand the toolkit for proactive wellness, accelerating recovery, reducing inflammation, and enhancing mental clarity.

We foresee a future where recovery technologies are embedded into everyday life

Clients today demand more than just one-dimensional treatments. They seek comprehensive wellness experiences that combine multiple modalities to deliver faster, longer-lasting results. CTN’s technology ecosystem was designed with this integrative mindset. For example, pairing hyperbaric oxygen therapy with whole-body cryotherapy creates a synergistic effect that boosts cellular repair and recovery far beyond what either treatment could achieve alone. This trend is reshaping not only individual health journeys but also the operational strategies of wellness businesses. Recovery studios, gyms, spas and even corporate wellness programmes are evolving to incorporate these technologies. By offering efficient, automated, and easy-to-use devices, CTN enables businesses to stay ahead of this curve – delivering value to their clients while streamlining their own operations. Our solutions require minimal staffing, offer high safety margins, and provide a rapid return on investment, making them an ideal fit for forward-thinking organisations.

Furthermore, the role of recovery technology in preventative health cannot be overstated. As healthcare systems around the world strain under the weight of chronic conditions and ageing populations, a growing emphasis is placed on early intervention and self-care. Recovery modalities such as cryotherapy, oxygen therapy, and red light therapy empower individuals to take proactive steps toward better health, reducing the risk of injury, accelerating healing processes, and improving overall quality of life.

Recovery solutions available to all
CTN’s partnerships with elite athletes, such as UFC champion Ilia Topuria and Team Finland’s Olympic and Paralympic squads, have shown that consistent recovery practices lead to measurable improvements in performance and resilience. However, these benefits are not reserved for the world’s best athletes. Our technology is designed to make world-class recovery solutions available to everyone – from busy executives combating stress and fatigue, to wellness enthusiasts investing in their future vitality.

Innovation is at the heart of our mission. As the wellness sector continues to evolve, so too must the technologies that support it. At CTN, we are continually researching, developing, and refining our solutions to ensure they align with the latest scientific insights and market needs. Whether through the integration of smart technologies for personalised protocols or through enhanced design for greater comfort and efficiency, we are committed to staying ahead of the curve.

Looking ahead, we foresee a future where recovery technologies are embedded into everyday life, just as fitness and nutrition have become integral components of modern living. In this future, recovery is not reactive – it is proactive. It is not about fixing what is broken but about maintaining what is strong. CTN’s cryotherapy and wellness solutions are a blueprint for this future, offering a bridge between cutting-edge science and accessible daily practice. As we move into the next chapter of global wellness, CTN remains dedicated to leading with expertise, innovation, and integrity. We believe that recovery technology has the power to reshape how humanity approaches health and performance – and we are proud to be pioneering that transformation. For those ready to invest in a future of resilience, vitality, and preventative wellness, the journey starts with CTN.

How to educate in a time of conflict

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One of the most challenging problems of practice that teachers face in schools is how to discuss burning political events, including war. This is especially delicate in international schools, such as the Ecole Internationale de Genève, where many nationalities are represented in the community, sometimes from the very nations at war. There is a temptation to avoid any mention of sensitive events, since schools are not political entities. However, decades of research on preventing prejudice and violence through education remind us that students must be given a space to discuss how they feel. The problem for teachers is how to scaffold such discussions.

Three principles, three strategies
In 2020, I led the publication of a UNESCO study entitled ‘Preventing violent extremism through education: from policy to practice,’ with contributions from curriculum experts, psychologists and philosophers. Based on what came out of this work, I would like to suggest three principles and strategies for educators to consider.

The first principle is that everyone is safe here. Wars create fear, anxiety and distress but also scapegoating, bullying and ostracism. It is the first duty of educators to know their students and the extent to which they might be affected by a conflict. No teasing, accusation, or discriminatory behaviour is ever acceptable, but this message needs to be reinforced in times of war. We should approach children from affected areas openly and check if they are alright. There should be a plan in place so that traumatised children know where to go to if the burden becomes too much.

The first strategy is therefore to create a safe space. Ask students how they are, as a class and individually. Be attentive to their mood and behaviour and give them a chance to express how they are feeling.

Use school resources, including psychologists and counsellors, to create a programme to support distressed students.

Searching for truth
The second principle is critical thinking. The first casualty in war is the truth: propaganda abounds and the chaotic, unfiltered world of social media both desensitises users and feeds them ideologically skewed accounts of conflict. Knowing what to trust and how to form an opinion is difficult, and this is why students need to be introduced to an empirical criterion of meaning.

The job of the teacher is to educate students how to think, not to tell them what to think

Hence the second strategy is to check your bias and get students to check theirs. Ask yourself what your assumptions are and how you project them, unconsciously or consciously, onto the way you chair discussions and present materials. The job of the teacher is to educate students how to think, not to tell them what to think. For their part, students should always ask themselves what their sources of information are.

The third principle concerns higher order moral imperatives. The teacher’s work is ultimately to lead the discussion to a level that is more general and is transferable to other situations.

So, the third strategy is to take discussions to this higher level. This allows students to leave the lesson with powerful syntheses or ‘headlines’ that are philosophical in nature. It also means closing discussions above the confusion of heated positions and moving towards a place of agreement. Sometimes we cannot end with a universal understanding, but instead a lingering universal question.

Skills development
To assist teachers in this aspect of their work, we are offering a new course at the Ecolint Institute of Learning and Teaching entitled ‘Teaching in Times of Conflict.’ This two-session in-person, one-session online workshop provides educators with various practical strategies. Delivered through expert-led presentations and facilitated breakout sessions, the course covers presenting unbiased information, supporting students’ emotional well-being, answering challenging student questions and reflecting on these practices. Participants will leave with a Certificate of Completion from the Ecolint Institute, recognising their participation and skills development.

The need to look after students and colleagues affected by war is of paramount importance. But avoiding the discussion of global events will not help students to become caring, critical thinkers. Hence the challenge facing us as educators. One thing is for sure, if we do not curate these discussions, social media will do it for us and that will not provide the support needed to nurture critically minded global citizens.

Sustainable aviation – the Turkish Airlines way

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‘Sustainable aviation’ is increasingly in the spotlight, and for good reason. But working towards this important goal is far from simple. At Turkish Airlines, we see it as a comprehensive and realistic approach to minimising our environmental impact – but there is no denying that carbon offsetting alone is insufficient. The issue has to be tackled from multiple angles. In our case the pillars are: the integrating of fuel efficiency, operational improvements, fleet renewal and the adoption of sustainable aviation fuels (SAF). In short, we strive to integrate sustainability into our operations and engage passengers through user-friendly platforms such as CO₂mission.

Carbon footprint-reducing measures
As mentioned above, our sustainability approach is multi-pronged and we have worked hard towards it for many years, long before ‘sustainability’ was the buzzword it is today. Since 2008, Turkish Airlines has implemented over 100 operational optimisation projects aimed at increasing fuel efficiency. In 2024 alone, these projects resulted in approximately 70,000 tons of fuel savings and prevented more than 220,000 tons of CO₂ emissions. Our fuel saving committee and advanced fuel management information systems help ensure continuous improvements. We have made significant progress but our primary focus remains the same, namely to keep fine-tuning operational efficiency and promoting the use of SAF.

Elsewhere, we have initiated projects such as ‘statistical contingency fuel’ to minimise excess fuel carriage on flights using data analytics. Additionally, we have phased out single-use plastic cups, introduced FSC-certified paper products and adopted lighter cabin equipment to reduce weight and fuel consumption. Collectively, these initiatives enhance both operational efficiency and environmental sustainability.

Inspiring green thinking
It is imperative to motivate passengers on sustainability and there are a number of ways to go about this. To engage our passengers, we have developed a dedicated hub – the CO₂mission platform. Though this multifunctional platform does not eliminate carbon emissions directly, it provides passengers with a transparent and verified system, encouraging them to contribute to global climate action. In order to inspire passenger participation, we have put a lot of effort into creating a platform with a user-friendly interface, allowing them to calculate and offset their carbon footprint with ease. Supported projects – all of which are internationally recognised gold standard and VCS-certified – include renewable energy generation, ecosystem restoration and community-based initiatives, enabling passengers to actively contribute to a more eco-friendly world.

To offer a more detailed rundown of these initiatives, the ‘renewable energy’ projects revolve around wind, solar and hydroelectric power to reduce fossil fuel consumption, while the ‘ecosystem restoration’ category helps to preserve natural ecosystems, increasing carbon sequestration capacity for long-term impact. The third in the family of initiatives – ‘community care’ – provides fuel-efficient stoves in developing regions to reduce carbon emissions and improve local communities’ quality of life.

We have noticed that projects that offer social benefits, such as the community-based cookstove initiatives, have been particularly popular, achieving increased overall engagement. It is evident that passengers appreciate seeing tangible impacts from their contributions. As for the physical in-flight experience, we strive to create awareness through sustainable practices such as digital menus and the use of biodegradable products. These initiatives aim to motivate passengers to become more environmentally conscious – whether they happen to be on a plane or elsewhere.

Future sustainability efforts
Without a doubt, the limited availability and high production costs of SAF pose the biggest challenge for our industry. In 2024, SAF accounted for only about 0.3 percent of global jet fuel usage. Scaling SAF production and making it economically viable requires extensive collaboration across the aviation sector, significant investments and supportive policies.

As for our own ongoing efforts, we are fully invested in our mission to reduce our environmental impact and will accelerate our sustainability initiatives with the goal of becoming a carbon neutral airline by 2050. To go about this, we will make full use of the multifaceted strategy we have developed over the years – and as ever continue to improve it. The areas of focus involve the increased use of sustainable aviation fuels, continued fleet modernisation and the expansion of data-driven fuel optimisation projects. Additionally, we have published our comprehensive ‘climate transition plan.’ Complacency has no place in the fight for the environment, and Turkish Airlines is determined to continue to invest in new technologies to further reduce our environmental footprint.

A blueprint for sustainable banking

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Sri Lanka is a comeback story that economists are closely monitoring as it still has some way to go, despite the significant progress made in the aftermath of the financial crisis that unfolded in 2022. Recording its first quarter of growth in the third quarter of 2023 after six consecutive quarters of negative growth, the country maintained its growth momentum in 2024 to record five percent growth, albeit from a low base.

The country held Presidential and Parliamentary elections in 2024 with a smooth transition of power during the year. The stability achieved through consistently applied policies is commendable as the country achieved stability in the trifecta, inflation, interest rates and exchange rates of abnormally high levels in 2022 and 2023. Exports, tourism and worker remittances increased foreign currency inflows supporting stability and growth.

The restructuring of the international sovereign bonds and the release of the third tranche of the Extended Fund Facility from the International Monetary Fund strengthened the economy. The country’s gross official reserves stand at 3.9 months by the close of 2024 and the country’s default rating was revised upwards, giving rise to a pervasive sense of renewed optimism among the people.

The financial inclusion goal
From its inception in 1986, Sampath Bank has transformed the banking industry in Sri Lanka using technology and innovative products to achieve financial inclusion, a term not yet coined at the time. From being the first bank in Sri Lanka to operate a multi-point network of Automated Teller Machines (ATM) in 1988 or the first to issue debit cards in South Asia in 1997, Sampath Bank has continuously sought to democratise convenient banking, seeking higher penetration levels with affordable and convenient banking. Accordingly, Sampath Bank aligned its priorities to support the recovery and growth of the economy.

Supporting the revival of businesses was a key area of focus, and the Business Revival Unit was set up to provide financial advice and management tools to move beyond cashflow constraints to thrive in a reviving economy. Over 74 businesses that were revived, stabilised and moved out of the bank’s stage two and stage three portfolios are testimony to the effectiveness of this new unit. These businesses are now stable with improved management and practical repayment schedules with sufficient headroom for growth.

Sampath Bank has continuously sought to democratise convenient banking

The loan book of the bank increased by 10 percent during the year compared to a decline of 4.7 percent in the previous year, as the bank supported growth in active sectors of the economy such as tourism, information and communication technology and healthcare.

The bank retained its leadership position in worker remittances and increased market share, assisting a growing migrant population to support their families in Sri Lanka by re-imagining the offering with relevant benefits and extending our reach. Growth in digital transaction volumes and values continue to nurture our legacy of leveraging relevant technology to integrate Sri Lankans with a digital era and the benefits of access to opportunity and financial services.

Building on a strong legacy
A new strategy was crafted in 2024 to position the bank along a new growth trajectory to be the best in whatever we do. It builds on the bank’s legacy of meeting the needs of the future through enhanced stakeholder value propositions. The strategy focuses on five pillars: corporate, SME, transaction banking, high-net-worth families, and advanced analytics. This strategy enables the bank to extend SME value chains, thereby enhancing our value proposition for the SMEs, entrepreneurs and farmers by building resilient ecosystems that ease access to markets and finance. The bank has a sound launching pad for this strategy with leadership in cards, loyal customer base, customer insights, a motivated team and solid financials, facilitating the development of unique and purposeful offerings for target customer segments. Advanced analytics and use of AI tools will support efficiency and growth as we harness the advancements in technology to level up the bank’s operating model.

Sampath Bank made the highest investment in its history in digital technologies in 2024 and is on the next phase of transitioning the people to the new norm. Teams are being coached to unlearn, relearn and improve, in order to drive both their own and the bank’s performance. This was underpinned with the highest training spend in the history of the bank. This approach aims to drive growth, improve customer loyalty, and position the bank for future success while strengthening its leadership in key business verticals.

Sampath Bank delivered strong PAT growth recording an EPS of Rs23.30 in 2024 compared to Rs14.62 reported in 2023 as delivery on strategy was buoyed by a recovering economy. Net interest income growth and a significant decrease in provisions for impairment contributed to profit growth. Profit after tax amounted to Rs27.3bn ($93m), an increase of 59.4 percent, reflecting the value created for investors.

The bank’s total asset growth was 15.3 percent as the balance sheet expanded to Rs1,778bn ($6.1bn), reflecting a focused growth strategy. Loans and advances recorded growth of 10 percent to Rs964.6bn ($3.3bn) as business confidence increased with economic stability. Investment portfolios increased by 28.7 percent to Rs801bn ($2.7bn), reflecting the cautious approach to growth in 2024 as well as our capacity for future growth.

Strong deposit growth of 16.2 percent to Rs1,469bn ($5bn) funded growth as increased customer centricity strengthened brand leadership. The Current Account and Savings Account (CASA) growth was also encouraging at 18.3 percent, easing pressure on NII margins as interest rates declined. Importantly, the bank’s Tier 1 capital adequacy ratio improved marginally, remaining well above industry standards while also recording significant improvement in asset quality indicators.

Targeted sustainability initiatives
Sampath Bank continues to enhance the sustainability of the business model while also investing in the future of the planet and its people through targeted sustainability initiatives. The Environmental and Social Management System is now an institutionalised process that assesses the environment and social impact of loan facilities above Rs100m. Financial inclusion is supported through multiple initiatives as well as our subsidiary, Siyapatha Finance. Additionally, implementing SLFRS sustainability standards in 2025 will ensure that controls over sustainability reporting are as rigorous as those over financial reporting.

The bank minimised scope one and two emissions by increasing our own solar generation capacity, which generated 664.6Mwh in 2024. Additionally, lending Rs1,440m ($4.9m) in renewable energy projects with a total installed capacity of 10Mw helped minimise scope three emissions. Initiatives to minimise and manage waste continue to transform how we work while enhancing awareness of the need for action by all throughout the bank.

We continue to invest in our people, supporting their career progression through focused training

The bank’s sustainability initiatives have been strategic in nature, nurturing environmental and social ecosystems that support each other to thrive. ‘Wewata Jeewayak,’ the bank’s flagship project, is now in its 24th year having undertaken a total of 30 reservoirs that are vital for the country’s food production, supporting the livelihoods of over 3,700 families in farming communities. This milestone was marked with the restoration of nine tanks in 2024, the highest undertaken in a single year. The project helps to irrigate 3,400 acres of paddy fields, enabling farmers to work two seasons instead of one. These reservoirs store and distribute rainwater to fields and homes, while also rejuvenating the flora and fauna. Project partners enhance the scope, extending it to financial inclusion, entrepreneurship development, and good agricultural practices, to name just a few aspects of this increasingly multifaceted project that delivers benefits at grassroots. ‘A breath to the ocean’ looks at restoration of mangroves, coral replanting and turtle conservation to support life below water. ‘Gasai Mamai Pubudu Pothai’ (The Tree, Me and My Savings Book) inculcates awareness of the importance of nurturing trees in the next generation. Environment restoration projects undertaken by the bank include the Kanneliya and Udawalawe forest restoration projects as well as the Mangrove Restoration Project in Anawilundawa Ramsar Wetland, reflecting our commitment to the environment.

Investing in the future
We continue to invest in our people, supporting their career progression through focused training while also implementing initiatives to support their health and well-being, including their mental wellbeing. Over 16 programmes were implemented for health and well-being covering over 23 percent of employees. The renewed focus on training resulted in an average of 45 hours of training per employee and 98.5 percent coverage of employees. We promoted 458 employees during the year to meet the business needs of a bank in a growth phase. The bank’s retention rate of 96.8 percent and the return-to-work rates after maternity leave stand testimony to our holistic employee value proposition.

Sri Lanka had a strong start for 2025 with a convergence of positive factors. Political stability, an improved sovereign rating, growth in trade, tourism and remittances together with improved business confidence augur well for the country’s ability to reach the forecasted GDP growth of approximately five percent in 2025. The banking sector is expected to be a catalyst and a beneficiary of the improved prospects for the country.

The multi-pronged strategy for growth described above will guide our quest to be the best bank in the country. We remain confident about realising our aspirations as we build on solid foundations with a motivated team.