CA Sri Lanka among world’s first to join global drive for ISSB Sustainability Standards adoption

Sri Lanka has been recognised among the first jurisdictions in the world, and in South Asia, to join the global drive to adopt the IFRS Sustainability Disclosure Standards (ISSB Standards). 

As part of this effort, the IFRS Foundation has released an initial set of 17 jurisdictional profiles, including Sri Lanka, offering capital markets greater transparency on how countries are aligning with the ISSB Standards. This also marks a significant milestone towards establishing a global baseline for sustainability disclosures.

The International Sustainability Standards Board (ISSB), under the IFRS Foundation, develops a global baseline for sustainability disclosures. 

IFRS (International Financial Reporting Standards), widely adopted around the world, now incorporate sustainability-related standards IFRS S1 and S2, or SLFRS S1 and S2 in the Sri Lankan context, issued by the ISSB to enable transparent, consistent, and comparable reporting to investors. These standards represent a significant step in embedding sustainability into mainstream financial reporting.

In Sri Lanka, the ISSB Standards are implemented by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka), in its standing as the sole authority for setting accounting and auditing standards in the country. As the national standard-setter, CA Sri Lanka plays a pivotal role in aligning Sri Lanka’s regulatory environment with international best practices.

Among 17 jurisdictions profiled globally in June by the IFRS Foundation, Sri Lanka has formally committed to fully adopting the ISSB Standards. By joining countries such as Australia, Bangladesh, Brazil, Chile, Ghana, Hong Kong SAR, Jordan, Kenya, Malaysia, Mexico, Nigeria, Pakistan, Chinese Taipei, Tanzania, Türkiye, and Zambia, CA Sri Lanka underscores the nation’s commitment to strengthening sustainability-related disclosures, fostering market transparency, and attracting sustainable investment.

This growing global momentum reflects a shared recognition of the need for high-quality, comparable sustainability-related information to serve investors worldwide. ISSB Chair Emmanuel Faber said: “The ISSB Standards are bringing clarity to investors on the risks and opportunities lying in value chains across time horizons in a rapidly changing world.”

For Sri Lanka, this marks a significant milestone in strengthening its regulatory framework in line with international standards, supporting national efforts towards sustainable economic growth, bolstering investor confidence, and enhancing long-term competitiveness in global markets.

CA Sri Lanka President Heshana Kuruppu said that as a progressive professional body with a regulatory role, the Institute is committed to ensuring that Sri Lanka embraces sustainable growth and responsible economic stewardship. 

“By adopting the ISSB Standards, we are ensuring that our businesses can compete on a level playing field in global markets while providing investors with transparent, comparable, and reliable information on environmental, social, and governance (ESG) impacts. This move reflects our determination to integrate sustainability into our economic framework, drive responsible investment, and build a resilient, future-ready Sri Lankan economy,” he said.

The IFRS Foundation, through its Regulatory Implementation Programme and capacity-building tools such as the IFRS Knowledge Hub on sustainability, will continue to support jurisdictions, including Sri Lanka, in this transition, ensuring the effective and timely implementation of the ISSB Standards. 

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 1 January 2025) on the Colombo Stock Exchange (CSE) are expected to mandatorily comply with the new sustainability standards. By 2026, this requirement will extend 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 1 January 2027.

By 2028, companies that prepare their accounts based on the Sri Lanka Accounting Standards, with the last two consecutive years’ annual turnover exceeding Rs. 10 billion, must comply with the standards. By 2029, this will extend to all companies that prepare their accounts based on Sri Lanka Accounting Standards with an annual turnover exceeding Rs. 5 billion. By 2030, Empower Board-listed entities as of 1 January 2024, and all other Specified Business Enterprises, will also be required to adopt the standards. For Empower Board listings after 1 January 2024, the adoption date will be for annual reporting periods beginning on or after the fifth anniversary of their respective listing date on the Empower Board, thereby ensuring a comprehensive and inclusive approach to sustainability reporting.

As part of CA Sri Lanka’s ongoing commitment to fostering a culture of sustainability and transparency in corporate reporting, the Institute has successfully delivered over 60 Continuous Professional Development (CPD) hours by July 2025. These include quarterly sessions on greenhouse gases (GHG) quantification and reporting, monthly webinars covering key technical areas, and sector-specific knowledge-sharing to ensure practitioners and preparers are equipped to meet the evolving expectations under SLFRS S1 and S2. These initiatives align with the national roadmap for the phased adoption of Sustainability Disclosure Standards, which commenced in 2024 and will continue through to 2030.

To further support preparers and ensure consistency in application, CA Sri Lanka is set to launch the ‘Preparers’ Guide on SLFRS S1 and S2’ alongside a specially curated short course in September 2025. These resources will provide practical guidance and contextual clarity for entities at different stages of the implementation timeline. 

Additionally, the Institute is in the process of adopting Assurance Standards for Sustainability Disclosures, tailored to the Sri Lankan context, to enable the provision of credible and verifiable sustainability-related information in financial reporting.