CA Sri Lanka among first to join global ISSB Standards drive

Heshana Kuruppu

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 the capital markets greater transparency on how countries are aligning with the ISSB Standards. 

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

Among the 17 jurisdictions profiled globally in June by the IFRS Foundation, Sri Lanka has formally committed to fully adopting the ISSB Standards. By joining the countries such as Australia, Bangladesh, Brazil, Chile, Ghana, Hong Kong SAR, Jordan, Kenya, Malaysia, Mexico, Nigeria, Pakistan, Chinese Taipei, Tanzania, Turkey and Zambia, CA Sri Lanka underscores the nation’s commitment to strengthening the 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 the investors worldwide. 

ISSB Chair Emmanuel Faber said, “The ISSB Standards are bringing clarity to the 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 the 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 the 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. By 2025, the first 100 listed entities (on the Main Board based on the 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 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 January 1, 2027.

By 2028, the 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 the Sri Lanka Accounting Standards, with an annual turnover exceeding Rs.5 billion. 

By 2030, the Empower Board-listed entities as of January 1, 2024 and all other Specified Business Enterprises will also be required to adopt the standards. For the Empower Board listings after January 1, 2024, the adoption date will be for the 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.