The Influence of ISSB Standards on Integrated Reporting Landscape in Sri Lanka

Integrated reporting has been a prominent practice in Sri Lanka for more than a decade, driven primarily by voluntary initiatives, market-led awards, the influence of professional accounting bodies, and the proactive engagement of leading listed firms.

- By SAMANTHI SENARATNE, SENIOR PROFESSOR IN ACCOUNTING, DEPARTMENT OF ACCOUNTING, UNIVERSITY OF SRI JAYEWARDENEPURA

Many Sri Lankan public listed companies - particularly those in the banking, finance, diversified conglomerate, plantation and manufacturing sectors produce sophisticated integrated reports that articulate value creation across financial, manufactured, intellectual, human, social, and natural capitals. However, despite the widespread adoption of integrated reporting formats, the quality, consistency, and comparability of sustainability information embedded within integrated reports have remained uneven across firms and industries. Sustainability disclosures often relied on narrative descriptions, selective metrics, and self-determined indicators, limiting comparability and hindering investor confidence. It is within this context that the adoption of ISSB standards - IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S2 on Climate-related Disclosures marks a transformative development in Sri Lanka's corporate reporting landscape.

A central impact of ISSB sustainability standards adoption is the formalisation and strengthening of the regulatory foundation for sustainability disclosures that feed into integrated reporting. The Sri Lanka Accounting Standards Committee's adoption of IFRS S1 and S2 as SLFRS S1 and S2, the Securities and Exchange Commission's approval of mandatory ISSB-aligned disclosures for the top 100 publicly listed companies from 2025, and the Colombo Stock Exchange's amendments to listing rules collectively elevate sustainability reporting from a voluntary practice to a mandatory and enforceable obligation. This alignment will increase confidence in the reliability of information disclosed in integrated reports.