Business
Sri Lankan exporters face new EU sustainability rules as compliance deadlines loom
Organizations should act now to stay ahead of new regulations
SRI LANKAN EXPORTERS targeting the European Union are being urged to prepare immediately for sweeping new sustainability regulations that will fundamentally change how businesses market products, manage supply chains and demonstrate environmental and social responsibility.
Beginning September 27, 2026, companies selling goods and services into the EU will face tougher scrutiny under the Empowering Consumers for the Green Transition Directive (EmpCo), which is designed to eliminate misleading environmental claims commonly known as “greenwashing.”
Businesses found making unsubstantiated sustainability claims could face penalties of up to €2 million or 4% of annual turnover in the relevant EU member state, together with reputational damage and possible restrictions on market access.
According to Peterson Solutions Sri Lanka, many exporters remain unaware that the new rules extend well beyond product labels, applying equally to websites, social media, advertisements, sustainability reports and other promotional material carrying environmental claims.
“The era of simply saying a product is ‘green’, ‘eco-friendly’ or ‘sustainably produced’ is coming to an end,” said Dr. Rukshan Gunatilaka (PhD), Asia Pacific Regional Manager of Peterson Solutions Sri Lanka. “Businesses must now be able to produce credible evidence supporting every sustainability claim they make. Compliance is no longer just a regulatory obligation. It’s becoming an absolute necessity for access to EU markets.”
He said sustainability has evolved from a voluntary corporate initiative into a core business requirement as governments, investors and consumers increasingly demand transparency and accountability throughout global supply chains.
“Doing business and protecting the planet can no longer be treated as separate objectives,” Dr. Gunatilaka said. “Environmental, social and governance performance now has a direct impact on a company’s reputation, shareholder value and long-term commercial success. Companies that fail to address these issues risk losing both customers and market confidence.”
The EU’s regulatory reforms form part of a broader shift towards more responsible global trade. Besides EmpCo, exporters must also prepare for the Packaging and Packaging Waste Regulation (PPWR), which begins applying from August 12, 2026, with further requirements phased in through 2030, and the EU Deforestation Regulation (EUDR), whose due diligence obligations take effect for larger companies on December 30, 2026.
The regulations affect a wide range of Sri Lankan export sectors, including food and agriculture, tea, spices, rubber products, apparel and textiles, fisheries, plastics, tourism-related products and even certain service industries supplying European clients.
Peterson Solutions says one of the biggest misconceptions among businesses is that these regulations apply only to European companies. In reality, any organization exporting to Europe, or making sustainability claims reaching European consumers, may be required to demonstrate compliance.
“The European market remains one of Sri Lanka’s most valuable export destinations,” Dr. Gunatilaka said. “Companies that prepare early will not only avoid regulatory risks but also strengthen customer trust, improve competitiveness and position themselves for long-term growth.”
Dulini Wijeratne, Assistant Manager – Business Communications and Marketing at Peterson Solutions Sri Lanka said, “Businesses should view compliance as a strategic investment rather than merely an additional cost.”
“Many established exporters already regard sustainability compliance as an essential part of doing business in Europe,” she said. “Companies planning to enter the EU market are also beginning preparations early because they recognize that robust sustainability systems create long-term commercial advantages.”
Part of the Netherlands-headquartered PCU group, established in 1920, the company operates in more than 80 countries, delivers projects across 120 countries and serves a global client base exceeding 40,000 clients.
Peterson Solutions provides certification support, sustainability consulting, responsible sourcing, supply chain traceability, ESG advisory services, academy solutions and technology-based solutions. Its digital platforms help organizations monitor carbon emissions, manage ESG performance, strengthen due diligence systems and maintain documentation required for increasingly complex international regulations.
In Sri Lanka, Peterson Solutions works across food and agriculture, apparel, plastics, rubber manufacturing, fisheries, aquaculture, tourism and other export-oriented industries. It also supports clients in Cambodia, Myanmar and the Maldives.
The company advises organizations to begin reviewing their sustainability communications, supply chains and governance systems now, rather than waiting until regulatory deadlines approach.
“The question regulators, investors and consumers are increasingly asking is no longer whether a company has sustainability ambitions,” Dulini Wijeratne said. “The question is: Can you prove it?”
To support organizations preparing for these evolving requirements, Peterson Solutions Sri Lanka will conduct a complimentary webinar titled “ESG Reporting Basics: Why, When & How” on 29 July 2026 from 3.30 p.m. to 4.30 p.m. (Sri Lanka Time).
Interested participants may register at: https://app.livestorm.co/peterson-solutions/esg-reporting-basics-why-when-and-how
Many organizations understand that sustainability is becoming important but are often unsure where to begin. The webinar is designed to provide practical guidance and help businesses take their first steps towards effective ESG reporting,” said Dulini Wijeratne.
Peterson Solutions Sri Lanka said businesses seeking to understand how the evolving EU sustainability framework may affect their operations can obtain guidance on compliance requirements, risk assessments, supply chain traceability, ESG implementation and evidence-based sustainability reporting.
Business
Needs of populace hit by Cyclone Ditwah seen as waiting to be addressed
By Hiran H. Senewiratne
The government is yet to address fully the needs of the Cyclone Ditwah affected populace though one year has elapsed. The devastation cost the country more than US $ 4.1 billion, an Australia-based Chartered Engineer of Sri Lankan origin said.
‘Cyclone Ditwah affected more than 2.2 million people in 25 districts, which is considered to be one tenth of the population. However, only 39 percent of the allocated funds have been spent to date, the speaker, a one-time General Secretary of the JVP, now living in Australia Lionel Bopage said.
He made these comments at a Rotary Club Colombo South monthly meeting held at the Kingsbury Hotel, Colombo recently.
Bopage quoted from a Loughborough University research report published in February to the effect that Sri Lanka has under invested in prevention but over invested in recovery.
Bopage added: ‘The largest single economic category affected were not buildings but the agriculture sector which provides livelihoods for the majority of affected persons. Therefore agricultural livelihoods have been hit most.
‘More than 58,000 hectares of paddy lands were flooded in the Eastern districts alone, while 46 reservoirs reached critical spill level or failed outright following the disaster.
‘A rapid education sector assessment found that 1,682 schools were affected and more than 555,000 children were unable to attend schools. Further, 622 water supply schemes had been left non-functional and apart from that 11300 homes were damaged or destroyed. But reconstruction is happening at a very slow pace.
‘Tens of thousands of households in the hill country and in the East are still living in damaged properties and on unstable slopes drawing water from schemes that have not been restored.
‘ A Post Disaster Needs Assessment put the cost of resilience at US$ 3.4 billion but restoration work is happening at a slow pace even with foreign donor assistance.’
Business
WB forecast buoys bourse but weak investor participation slows momentum
By Hiran H. Senewiratne
The CSE yesterday kicked off on a positive note due to a World Bank forecast that Sri Lanka could achieve 4.4 percent economic growth this year but later lost momentum due to weak investor participation.
Amid those developments both indices moved upwards. The All Share Price Index went up by 132 points while S and P SL20 rose by 21.02 points.
Turnover stood at Rs 1.97 billion with three crossings. Those crossings were; Lanka IOC 2.7 million shares crossed to the tune of Rs 470 million; its shares traded at Rs 127, CCS 2.7 million shares crossed to the tune of Rs 315 million; its shares sold at Rs 118 and JKH five million shares crossed for Rs 91.5 million; its shares traded at Rs 18.30.
In the retail market companies that mainly contributed to the turnover were; Commercial Credit and Finance Rs 126 million (1.3 million shares traded), Lanka IOC Rs 98 million (775,000 shares traded), Asiri Surgical Hospitals Rs 77 million (7.6 million shares traded), Commercial Bank Rs 51.3 million (307,000 shares traded), Sampath Bank Rs 46 million (325,000 shares traded), HNB Rs 37 million (98000 shares traded) and Tokyo Cement Rs 31 million (393,000 shares traded). During the day 50 million share volumes changed hands in 14547 transactions.
It is said that the petroleum sector performed well, especially Lanka IOC, while in the banking sector counters, especially Commercial Bank and Sampath Bank performed well. In the manufacturing sector, JKH impressed.
TAL Lanka Hotels announced that it has scheduled an Extraordinary General Meeting on October 29 to obtain shareholder approval for a proposed Rs 1.87 billion rights issue. The proceeds will be utilized for the repayment of bank borrowings, part refurbishment of the Taj Samudra Hotel in Colombo, settlement of vendor liabilities, and general corporate requirements.
Yesterday the rupee was quoted at Rs 330.95/331.05 to the US dollar in the spot market, weaker from Rs 330.85/95 the previous day, while bond yields were quoted broadly steady, dealers said.
Business
Huawei continues to showcase practical AI applications at Sri Lanka AI Week 2026
Sri Lanka AI Week 2026 continued into its second day bringing together government, industry, academia and technology partners to explore practical applications of artificial intelligence. As the AI Technology Partner for the second consecutive year, Huawei showcased 18 use cases spanning government, education, finance, industry, green energy and everyday life, demonstrating how AI can be applied to real-world needs.
Prime Minister Dr. Harini Amarasuriya visited the Huawei exhibition together with officials from the Ministry of Education, Higher Education and Vocational Education, experiencing the Smart Classroom, AI in Education and MindGraph by Beijing Normal University demonstrations. The Smart Classroom demostration highlighted how connected technologies can bring teachers and students in different locations into a shared learning environment, while the AI in Education showcase demonstrated how AI can support teachers, enhance learning and enable more personalised education. The Prime Minister praised the efforts of the Ministry of Education, Higher Education and Vocational Education, Huawei and their partners to demonstrate practical applications of AI in education, noting the role of technology in supporting teachers, expanding learning opportunities, and advancing a more inclusive, equitable and future-ready education system.
Later in the day, Deputy Minister of Digital Economy Eng. Eranga Weeraratne, Deputy Minister of Industry and Entrepreneurship Development Chathuranga Abeysinghe, Secretary to the Ministry of Digital Economy Waruna Sri Dhanapala, and Chinese Ambassador Wei Huaxiang visited the Huawei exhibition and explored the AI Hands-On Classroom AI Empowering Industry, AI in Education and Smart Classroom demonstrations. Deputy Minister Weeraratne praised Huawei’s practical approach to showcasing AI applications, noting their relevance to Sri Lanka’s digital transformation across education, industry and skills development. The engagement also extended across the wider AI ecosystem, with industry professionals, technology partners, academics and other visitors engaging with the demonstrations and expressing appreciation for Huawei’s practical approach to applying AI across different areas of society and the economy.
Daniel Wu, CEO of Huawei Sri Lanka, said that Huawei will continue bringing global experience, technology and ecosystem resources to Sri Lanka, while working side by side with local partners to build local capabilities, develop local talent and create real value for the country. “I believe that by working together, we can make AI not only more intelligent, but also more local, more inclusive, and more meaningful for everyone,” he said.
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