Sustainability reporting has become a cornerstone of modern corporate governance across South Asia. Yet, as Dr. Ranjith Krishnan, Associate Professor at CHRIST University, Delhi NCR, highlights, the true credibility of ESG disclosures is not measured by the volume of data published — it is measured by how useful that data is when real financial and corporate decisions must be made. A Sri Lankan tea exporter may diligently report water consumption figures, while an Indian textile manufacturer carefully documents greenhouse gas emissions. But when a lender sits across the table, they need far more than isolated metrics. They need to understand drought exposure, regulatory transition costs, and long-term climate resilience. This gap between disclosure and decision-making utility is precisely where both nations have significant room to grow — and significant lessons to share with each other.
The Current State of ESG Reporting in India
India has made notable strides in formalizing sustainability reporting. The Securities and Exchange Board of India (SEBI) introduced the Business Responsibility and Sustainability Report (BRSR) framework, mandating structured ESG disclosures for the top 1,000 listed companies by market capitalization. This framework aligns with global standards and covers environmental impact, social responsibility, and governance practices in considerable detail. India's sheer scale of industry — from textiles and pharmaceuticals to information technology and manufacturing — means that its ESG reporting ecosystem is broad, though not always deep. Many disclosures remain compliance-driven rather than strategically integrated into business planning. The challenge for India is moving from a checkbox mentality to a culture where sustainability data genuinely informs investment, lending, and operational decisions.
Sri Lanka's Sustainability Reporting Landscape
Sri Lanka, despite being a smaller economy, has demonstrated commendable leadership in integrated reporting. The Colombo Stock Exchange has encouraged listed companies to adopt integrated reporting frameworks, and several Sri Lankan firms — particularly in the tea, apparel, and banking sectors — have embraced the International Integrated Reporting Council (IIRC) framework. This approach connects financial performance with environmental and social outcomes in a cohesive narrative, rather than treating ESG as a separate appendix to annual reports. Sri Lanka's strength lies in storytelling through data — communicating how sustainability factors affect long-term value creation. However, the country faces challenges related to standardization, third-party assurance, and the economic pressures that have recently strained corporate governance priorities.
Where the Two Nations Can Learn from Each Other
The complementary strengths of India and Sri Lanka create a natural opportunity for mutual learning. India can benefit from Sri Lanka's integrated reporting culture, where ESG factors are woven into the broader business narrative rather than siloed into standalone sustainability reports. When financial institutions in Colombo evaluate a loan application from a plantation company, they are increasingly trained to read environmental risk as a financial risk. This holistic perspective is something Indian lenders and investors are still developing, despite growing awareness around climate-related financial risks.
Conversely, Sri Lanka can draw from India's regulatory architecture. SEBI's BRSR framework, with its structured disclosure requirements and phased implementation approach, offers a replicable model for building mandatory ESG reporting standards. Sri Lanka's current framework relies heavily on voluntary adoption, which creates inconsistencies in data quality and comparability. A more structured regulatory mandate, inspired by India's approach, could elevate the reliability of Sri Lankan ESG data for international investors and development finance institutions.
The Role of Financial Institutions in Driving Change
Banks and financial institutions in both countries hold enormous power to accelerate meaningful ESG integration. When lenders begin pricing climate risk into loan terms, or when equity analysts factor governance scores into valuations, companies quickly recognize that sustainability reporting is not merely a public relations exercise. Both India and Sri Lanka need their financial sectors to develop ESG literacy at scale — from relationship managers at regional branches to chief risk officers at major banks. Regional cooperation, including shared training programs, common risk assessment frameworks, and bilateral dialogue between regulators like SEBI and Sri Lanka's Securities and Exchange Commission, could accelerate this transition significantly.
Standardization and Assurance: The Missing Links
One of the most pressing shared challenges is the lack of standardized metrics and independent assurance. Without consistent definitions — whether for water intensity, carbon scope, or supply chain labor standards — ESG data from Indian and Sri Lankan companies remains difficult to compare, aggregate, or trust. Third-party assurance of sustainability reports, still relatively uncommon in both markets, is essential for building credibility with global investors who are increasingly scrutinizing greenwashing risks.
Building a South Asian ESG Dialogue
Ultimately, what India and Sri Lanka need is not just better individual frameworks — they need a regional conversation. South Asia's interconnected supply chains, shared climate vulnerabilities, and overlapping investor bases make a compelling case for harmonized ESG standards. By learning from each other's regulatory innovations, reporting cultures, and financial sector practices, both nations can build sustainability ecosystems that go far beyond disclosure — ecosystems where ESG data genuinely drives better decisions, stronger businesses, and more resilient economies.