Q: CFA Society Sri Lanka hosted the 10th Capital Market Awards recently. Could you discuss the importance of celebrating corporate commitment to excellence – especially in these challenging times?

A: It would be an understatement to say that Sri Lanka’s capital markets have been nothing but volatile in the last 10 years. In such a context, it’s important to cut through the noise, and provide quality information and analysis to investors in a timely manner to enable them to make the right investment calls.

Analysts and companies that continue to provide such services irrespective of unprecedented market conditions are the cornerstones of a dynamic and vibrant capital market. And as such, they need to be recognised and celebrated.

Q: Can you share with us the thought process behind this year’s theme for the awards ceremony – i.e. ‘Invest Smart, Build Resilience, Thrive in Sri Lanka’?

A: There is cautious optimism among the investment community that the economy is turning around after what may be the biggest economic crisis seen since independence. However, the country is still not out of the woods, and requires material, structural and fiscal reforms to achieve long-lasting stability.

In such a context, it is important to understand what asset classes would be resilient while providing acceptable levels of return. The idea behind the theme was to provide expert insights on what type of investments can work in the current environment while minimising risks.

Q: What characteristics differentiated the corporates that were recognised at the awards ceremony from the rest this year?

A: We believe the main difference is the winners leveraged the challenges to showcase their capabilities, and did not waver on their commitment to stakeholders who were relying on timely on the ground analysis of what was happening in the economy and capital markets.

Additionally, we saw some winners upping their game through the use of technology and social media, gaining an edge over the others.

Q: How important is it for companies to invest in improving the depth and quality of investment analysis?

A: It is very important! There is an information overload in the current environment and given this, it’s very important to separate the truth from misinformation, and provide quality information and analysis to users.

It’s the responsibility of the analysts to provide fundamental driven analysis by staying away from speculation and to that extent, it is important that companies invest in people, processors and technology on a continuous basis.

Q: As an advocate of sustainability reporting, what are your main observations regarding how Sri Lankan corporates are embracing ESG (environmental, social and governance) reporting?

A: Our main observations regarding how Sri Lankan corporates are embracing ESG reporting are positive. Over the past few years, we have noticed a growing trend among Sri Lankan companies of integrating environmental, social and governance factors into their reporting practices.

Many companies are recognising the importance of disclosing their sustainability initiatives, impacts and risks to stakeholders, thereby enhancing transparency and accountability.

However, there is still room for improvement in terms of the standardisation and depth of ESG disclosures to ensure more comprehensive reporting across the corporate landscape.

Q: What plans does CFA Society have in terms of accelerating sustainability reporting in Sri Lanka?

A: CFA Society Sri Lanka’s plans to accelerate sustainability reporting include collaborating with the Securities and Exchange Commission (SEC) and Colombo Stock Exchange (CSE) through an MOU, to educate companies and investors on ESG best practices.

Furthermore, CFA Society Sri Lanka plans to conduct educational programmes and awareness campaigns to promote ESG principles.

In the future, we plan to establish ESG reporting awards to recognise companies excelling in sustainability reporting. This will provide the necessary momentum to attract and encourage more corporates to adopt ESG best practices.

Going ahead, we will promote the Certificate in ESG Investing, which is offered by the CFA Institute to equip local investment professionals with ESG analysis skills.

Our future plans also include collaborating with the CFA Institute and other societies to advance sustainability reporting efforts.

Q: So what trends do you foresee when it comes to corporate reporting over the next 12-24 months?

A: Over the next 12-24 months, corporate reporting is likely to see increased focus on ESG factors, greater adoption of digital reporting technologies and heightened transparency, in response to growing stakeholder demands for sustainability and accountability.

Q: And last but not least, what are the society’s plans for the next 12 months?

A: Over the next 12 months, CFA Society Sri Lanka’s salient plans include creating awareness and education on sustainability reporting and ESG practices, as well as instituting ESG reporting awards to recognise exemplary companies.

Telephone 0727 484122  |  Email ceo@srilanka.cfasociety.org  |  Website www.cfasocietysrilanka.org