## SLID-KPMG: Audit Committees Move Beyond ESG Compliance 📈

The 32nd SLID-KPMG Audit Committee Forum highlighted a shift in corporate governance, urging audit committees to treat sustainability reporting with the same rigor as financial data under new SLFRS S1 & S2 standards. • Strategic Oversight The board's role is evolving from mere disclosure to embedding ESG into core strategy. Diversified conglomerates like Aitken Spence PLC are now linking sustainability risks and opportunities directly to investment and divestment decisions, such as transitions from thermal power to waste-to-energy. • Data Governance & Accountability For large-scale operations like the apparel & textiles giant MAS Holdings, credible ESG reporting now requires enterprise-wide data architecture. Key focuses include: • Standardizing definitions and automating validation at source. • Moving from periodic validation to continuous controls monitoring. • Linking ESG performance metrics directly to individual KPIs to ensure accountability. • Implementation & Sustainable Finance Sector Resilience: Companies like Lion Brewery PLC are investing in wastewater treatment and flood protection to mitigate climate-related operational risks. Access to Capital: Financial institutions like DFCC PLC are pioneering green and blue bonds. However, concerns remain regarding the ability of SMEs to meet the stringent compliance demands of EU and other advanced markets to access preferential sustainable capital. • Key Takeaway Compliance with SLFRS S1/S2 must begin at the strategy stage, not the reporting stage. Audit-ready data is now central to safeguarding reputation and long-term value in the Sri Lankan economy.