In March 2024, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), as the sole authority for accounting, auditing and sustainability standards in the country, unveiled a comprehensive implementation roadmap to support the adoption of international sustainability standards. The Global Sustainability Disclosure Standards of the International Standards Board (ISSB).
The roadmap will guide Sri Lankan businesses in integrating these critical standards, reflecting their commitment to improving transparency and aligning with global sustainability requirements.
As part of the implementation roadmap, CA Sri Lanka has already undertaken several proactive initiatives to raise awareness and support the adoption of these standards among various stakeholders, including the business community. These efforts include ongoing awareness-raising sessions, strategic partnerships with government and donor agencies, building expertise and developing key resources in both the private and public sectors, ensuring that Sri Lankan businesses are well-equipped for the upcoming changes and fully supporting the transition process. .
The adoption of the Sri Lanka Sustainability Disclosure Standards, SLFRS S1 (General Requirements for Disclosure of Financial Information Related to Sustainability) and SLFRS S2 (Climate-Related Disclosures), commenced in January 2025, with full implementation planned for 2030.
This phased adoption ensures inclusiveness, tailoring requirements based on the size of businesses. Accordingly, by 2025, the top 100 listed entities on the Colombo Stock Exchange (CSE) (on the Main Board based on market capitalization as of 1 January 2025) are expected to be mandatorily compliant with the new sustainability standards. By 2026, this requirement will be extended to all listed entities on the Main Board of the CSE. By 2027, all entities listed on the CSE, except those on the Empowerment Board, will be required to comply with the standards for annual periods beginning on or after 1 January 2027.
By 2028, companies preparing accounts based on Sri Lanka Accounting Standards and having an annual turnover of Rs. 10 billion for the last two consecutive years, will be required to comply with the standards, and by 2029, this will be extended to all companies preparing their accounts based on Sri Lanka Accounting Standards. 5 billion. By 2030, listed entities of the Empowerment Board will also be required to adopt the standards, ensuring a comprehensive and inclusive approach to sustainability reporting.
Following the release of a set of sustainability standards by the ISSB in June 2023, CA Sri Lanka actively organized sessions to raise awareness among stakeholders about these new standards from 2023 onwards. The first sessions were held in September and October 2023, and aimed to broaden understanding of sustainability initiatives. These efforts were strengthened and expanded throughout 2024 with a series of additional sessions conducted by foreign and local subject matter experts.
Meanwhile, to further facilitate this transition, CA Sri Lanka will also introduce a Readiness Maturity Assessment Model with an Application Guidebook in early 2025. These tools will provide businesses with clear guidance and best practices for seamless implementation. Furthermore, recognizing the importance of capacity building, a bi-monthly Greenhouse Gas (GHG) Emissions Certification Program has been launched to ensure compliance with reporting requirements. By mid-year, CA Sri Lanka will assess the adoption status of the top 100 listed companies on the CSE, reflecting its proactive approach to monitoring the progress of the CSE. Furthermore, at the annual TAGS Awards, the institution will further recognize companies that demonstrate exemplary implementation of sustainability standards. CA Sri Lanka Chairman Heshana Kuruppu said that the adoption of SLFRS S1 and S2 marks a critical step in enhancing transparency and trust in sustainability-related financial disclosures.
