Alliance Finance Company PLC (AFC) is the 3rd oldest finance company in Sri Lanka, with a network of 91 touch points across the island reaching out to serve more than 117,000 customers. AFC maintains a robust salary structure on a par with industry standards to make sure that all its employees are compensated fairly Tweet This!, in recognition of the duties and responsibilities related to their job role.
This case study is based on the 2018-19 Annual Report by AFC published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
The diverse and skilled employee base is AFC’s most valuable asset. Accordingly, every AFC employee is entitled to all statutory benefits and leave entitlements in addition to fixed salaries, while AFC also provides a host of other benefits, that are made available to all confirmed AFC employees. In order to promote employee welfare AFC took action to:
- introduce a medical insurance scheme
- implement an enhanced gratuity scheme
- provide maternity leave
- establish an enhanced provident fund
- provide provident fund loans
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With this case study you will see:
- Which are the most important impacts (material issues) AFC has identified;
- How AFC proceeded with stakeholder engagement, and
- What actions were taken by AFC to promote employee welfare
What are the material issues the company has identified?
In its 2018-19 Annual Report AFC identified a range of material issues, such as financial performance, ethics and integrity, environmental sustainability, supply chain management, customer experience. Among these, promoting employee welfare stands out as a key material issue for AFC.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups AFC engages with:
To identify and prioritise material topics AFC engaged with its stakeholders through the following channels:
|Stakeholder Group||Method of engagement|
|· AGM and Annual Report (annually)
· Interim financial statements (quarterly)
· Corporate website (continuous basis)
· Announcements to the CSE (continuous basis)
· Press releases (continuous basis)
|Customers||· Customer satisfaction survey (bi-annually/quarterly)
· Customer relationship management function (continuous)
· Customer exit surveys in Microfinance (annual)
· Customer hotline (continuous)
· Customer education programmes (continuous)
· Online and social media platforms (continuous)
|Employees||· Employee feedback survey (annual)
· Performance appraisal (annual)
· Multi-level staff meetings (continuous)
· Open door policy (continuous)
· Training need assessment (annual)
· Social media platforms (continuous)
· Work-life balance initiatives (continuous)
|Business Partners and Suppliers
|· Direct dialogue (continuous)
· Service quality survey (annual)
· Stakeholder feedback survey (annual)
|· Regulatory reporting (continuous)
· CBSL audits (annual)
· Special meetings for regulatory clarifications (need basis)
· Press releases and CSE publications (continuous)
|Community||· CSR initiatives (periodic)
· Press releases and publications (continuous)
· Engagement through branches (continuous)
In its 2018-19 Annual Report AFC reports that it took the following actions for promoting employee welfare:
- Introducing a medical insurance scheme
- AFC has introduced two external medical schemes to its staff, based on the grades. The staff above Assistant General Manager grade are covered through one medical scheme and the rest of the staff is covered through another medical scheme, which includes four schemes and eligibility is decided based on the grades. Additionally, staff has the opportunity to include their family or to upgrade the scheme at their cost.
- Implementing an enhanced gratuity scheme
- AFC has an enhanced gratuity for its staff and staff is benefiting as per the below criteria:
- Half a month of terminal salary for each year of completed service for those who have completed five years in service.
- One-month terminal salary for each year of completed service for those employees who complete 10 continuous years in service.
- One and a half months terminal salary for each year of completed service for those employees who complete 15 continuous years in service.
- Two months terminal salary for each year of completed service for those employees who complete 25 continuous years in service.
- Providing maternity leave
- Female employees are entitled to full pay maternity leave of a total of eighty-four (84) days, subject to the statutory provisions governing such leave.
- Establishing an enhanced provident fund
- AFC has an enhanced provident fund, where it contributes 20% of the total monthly emoluments (exclusive of any commission, bonus or any allowance for special purposes) and employees contribute 10% of the monthly emoluments.
- Providing provident fund loans
- Employees contributing towards the Alliance Provident Fund are entitled to obtain loans from the fund at 6% interest per annum, provided they are confirmed permanent employees. These loans are given as personnel loans and housing loans, based on the requirement and the eligibility of the staff member.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees
Disclosure 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees corresponds to:
- Sustainable Development Goal (SDG) 3: Ensure healthy lives and promote well-being for all at all ages
- Targets: 3.2
- Sustainable Development Goal (SDG) 5: Gender Equality
- Targets: 5.4
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.5
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1) This case study is based on published information by AFC, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
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