CA SL unveils comprehensive implementation road map for sustainability standards

CA Sri Lanka President Heshana Kuruppu at a session 

SLFRS S1 and S2 publications by CA Sri Lanka 

In March 2024, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), in its standing as the sole authority for accounting, auditing and sustainability standards in the country, unveiled a comprehensive implementation road map to support the adoption of the International Sustainability Standards Board’s (ISSB) global sustainability disclosure standards. 

The road map aims to guide Sri Lankan businesses in integrating these critical standards, reflecting a commitment to enhancing transparency and aligning with the global sustainability requirements.

As part of the implementation road map, CA Sri Lanka has already carried out several proactive initiatives to increase awareness and support the adoption of these standards among various stakeholders, including the business community. These efforts include continuous awareness sessions, strategic partnerships with government and donor agencies to build expertise in both the private and public sectors and the development of important resources, to ensure businesses in Sri Lanka are well-equipped for the upcoming changes and are fully supported throughout the transition process.

The adoption of the Sri Lanka Sustainability Disclosure Standards, SLFRS S1 (General Requirements for Disclosure of Sustainability-Related Financial Information) and SLFRS S2 (Climate-Related Disclosures), commenced in January 2025, with full implementation planned by 2030. 

This phased adoption ensures inclusiveness, tailoring requirements based on the size of businesses. Accordingly, by 2025, the first 100 listed entities (on the main board based on market capitalisation as of January 1, 2025) on the Colombo Stock Exchange (CSE) are expected to mandatorily comply 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 listed entities on the CSE, except those on the Empower Board, will need to comply with the standards for annual periods beginning on or after January 1, 2027. 

By 2028, companies that prepare their accounts based on the Sri Lanka Accounting Standards, with the last two consecutive year’s annual turnover exceeding Rs.10 billion, must comply with the standards, while by 2029, this will extend to all companies that prepare their accounts based on Sri Lanka Accounting Standards with the annual turnover exceeding Rs.5 billion. By 2030, the Empower Board-listed entities will also be required to adopt the standards, ensuring a comprehensive and inclusive approach to sustainability reporting.

Following the release of the first set of sustainability standards by the ISSB in June 2023, CA Sri Lanka actively organised sessions to raise awareness on these new standards among the stakeholders from 2023 onwards. The first sessions were conducted in September and October 2023, aimed at broadening the understanding of sustainability initiatives. These efforts were strengthened and expanded throughout 2024, with a series of additional sessions, which were conducted by foreign and local subject experts. 

Meanwhile, to facilitate this transition further, CA Sri Lanka will also introduce a readiness maturity assessment model in early 2025 along with the Application Guideline book. These tools aim to provide businesses with clear instructions and best practices for seamless implementation. Furthermore, having recognised the importance of capacity building, a bimonthly greenhouse gas (GHG) emission certification programme has been launched to ensure compliance with reporting requirements. By mid this year, CA Sri Lanka will assess the adoption status of the top 100 listed companies on the CSE, reflecting its proactive approach to monitoring progress. Furthermore, at the annual TAGS awards ceremony, the institute will further evaluate and recognise the companies demonstrating exemplary implementation of sustainability standards. CA Sri Lanka President 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, empowering the investors and stakeholders with reliable data to make informed decisions. 
“Embracing sustainability is not merely a response to global trends; it is a commitment to creating long-term value for all stakeholders. The road map has provided a clear path to assist Sri Lankan companies in meeting international sustainability requirements while making sure they have the tools and information needed for a seamless transition,” he added.