Overview of SLFRS S1 & S2
Introduced: June 28, 2024 (standards issued)
Effective from: January 1, 2025 (top 100 listed companies)
Last modified: March 2024 (implementation roadmap)
Region(s): Sri Lanka
About SLFRS S1 & S2
Sri Lanka has formally adopted the International Sustainability Standards Board’s IFRS S1 and S2 as part of its national accounting standards, now called SLFRS S1 & S2 Sustainability Reporting.
These standards embed sustainability and climate risk disclosures into the core financial reporting structure under local GAAP.
The phased rollout begins with the top 100 Main Board–listed firms in FY 2025 and expands through 2030 to cover all listed and large unlisted public interest entities, aligning Sri Lanka with global ESG transparency benchmarks.
Criteria for compliance
Compliance is phased by entity size and type.
FY 2025
Top 100 Main Board–listed companies
FY 2026
All Main Board–listed companies
FY 2027
All listed companies
FY 2028-29
Unlisted public-interest entities with turnover exceeding LKR 10 billion (manufacturing) or LKR 5 billion (services)
FY 2030
Remaining Empower Board SMEs
Disclosure requirements
Entities must report in line with full IFRS S1 and S2, including:
- Governance, strategy (with scenario analysis), risk management, metrics & targets
- GHG emissions: Scope 1 & 2 mandatory, Scope 3 if material
- Climate transition plans and progress against stated targets
- Qualitative and quantitative ESG disclosures under general sustainability (S1)
- Digital tagging per CA Sri Lanka guidance
Key obligations
- Sustainability disclosures must be included in the Annual Report
- Reports must be submitted to the Colombo Stock Exchange (CSE) and the Auditor General
- Board review and approval is required prior to submission
Third-party assurance
Currently voluntary, with a national GHG certification program launched to support future capacity. Mandatory assurance has not yet been scheduled, but early adoption is encouraged.
Penalties for non-compliance
Regulated under the Sri Lanka Accounting & Auditing Standards Act, violations may result in:
- Orders to restate inaccurate filings
- Public censure
- Monetary penalties
- Listing sanctions by the Colombo Stock Exchange
