Output, efficiency and profit have been key to the development of Sri Lankan manufacturing companies, yet there has been a recent shift towards a more sustainable approach to doing business. Operations have become more refined, waste is minimised, and there’s a strong focus on safety and wellbeing. Most notably, manufacturers are pursuing policies to preserve and enhance the natural world.
Among them, Sri Lankan corporate Hemas Holdings, which has a diverse range of consumer brands, has integrated environmental, social and governance (ESG) principles into its operations.
‘Sustainability information is reported quarterly, enabling holistic decision-making’
'We are committed to proactive measures to mitigate risks, including sustainability-related risks and opportunities, and impacts on our stakeholders, the environment, society and overall governance,' says Sabrina Esufally, managing director of Hemas Consumer Brands. 'We ensure respect for human rights across our workforce and value chains, and maintain a zero-tolerance policy towards any form of child labour, forced labour or compulsory labour.’
Transition costs
Third-party contract manufacturing is closely audited to ensure compliance with labour regulations, environmental standards, and health and safety practices, and suppliers are encouraged to align with Hemas’s sustainability policies.
‘We have implemented a sustainability management framework that includes tracking sustainability information, including sustainability-related risks and opportunities, on a quarterly basis. This information is reported to management quarterly, enabling holistic decision-making,’ Esufally says.
She acknowledges the challenge of transitioning to sustainable practices, particularly the high upfront costs of sustainable technologies, which can be hard to justify to stakeholders due to uncertain long-term returns. The limited availability of advanced technologies in some regions and the integration of new systems with existing processes also pose difficulties.
To help entrench sustainability practices across its value chain, the company conducts cost-benefit analyses to highlight long-term financial benefits, seeks incentives and grants, and collaborates with technology providers. It also runs pilot projects to test new technologies and builds internal expertise in sustainability practices and regulatory compliance.
‘Whether we like it or not, we have to report on ESG'
Regulatory drive
Lina Manufacturing, the pharma manufacturing arm of conglomerate Sunshine Holdings, is currently gearing up for mandatory ESG reporting that begins in the financial year 2025.
‘Whether we like it or not, we have to report on ESG from FY25,’ says CEO T Sayanthan, highlighting the regulatory drive towards sustainability. Proactive measures are being undertaken, including obtaining environmental and ISO certifications, and establishing robust health and safety protocols.
The company is also transitioning to more automated and digital manufacturing processes. The automation of its metered-dose inhaler line, for example, has helped minimise waste and enhance operational efficiency.
Looking ahead, Sunshine Holdings is committed to adopting global best practices in sustainability, such as a paperless environment and further strengthening health and safety measures. It is also in the process of appointing a sustainability officer to oversee these initiatives. ‘We have a compliance officer in place. We have a health and safety officer in place. Very soon, we should also have a sustainability officer,’ Sayanthan says.
Positive contribution
Sri Lankan conglomerate Aitken Spence adopts a strategic and science-based approach to sustainability, strongly focused on mitigating negative impacts while amplifying its positive contributions to the environment, the economy and its stakeholders. The group has a presence in the tourism, maritime, logistics, energy, plantation, services and apparel sectors in the region.
Yasangi Muditha Randeni, Aitken Spence’s general manager for corporate strategy and sustainability, says: ‘We work towards this by systemically and systematically identifying and addressing areas where we can have impacts, optimising our operations, enhancing existing systems for better efficiency, and ensuring new initiatives are built with a strong focus on long-term sustainability from the outset.’
‘Groundbreaking initiatives have highlighted our capacity to overcome obstacles’
The group’s sustainability implementation framework provides clear guidance for operations, outlining mandatory actions, establishing stricter controls for specific subsidiaries and recommending exemplary practices that exceed baseline requirements.
Randeni says group companies adopt diverse management systems benchmarked against global standards and best practices. The benchmarks endorsed include the Ten Principles of the UN Global Compact, the Sustainable Development Goals, Sri Lanka’s nationally determined contributions, the UN Guiding Principles on Business and Human Rights, the Women’s Empowerment Principles, and the Science-Based Targets initiative.
‘Notable examples of this commitment include Aitken Spence Printing’s operation of South Asia’s first LEED-certified green printing facility and our waste management solutions in the Western Province, where our waste-to-energy power plant provides critical infrastructure to support sustainable urbanisation.’
She adds that one of the primary challenges in transitioning to sustainable practices, particularly in the manufacturing sector, is the limited availability of advanced technology and access to capital. Many of the company’s initiatives are pioneering in the region, so they often operate without peer examples or opportunities for competitive pricing.
‘Whether it’s Heritance Kandalama, the world’s first LEED-certified hotel and the first building outside the US to achieve this certification, the first LEED-certified hotel in the Maldives, sustainable agricultural practices or Sri Lanka’s first and only waste-to-energy power plant, we have encountered similar challenges in driving change. Nevertheless, these groundbreaking initiatives have solidified our commitment to sustainability and highlighted our capacity to overcome obstacles through innovation and collaboration.’
In the company‘s agricultural operations, innovative technologies including drones have been adopted for crop monitoring, land management and data analysis. These innovations optimise the use of water, fertilisers and pesticides while improving crop yields.
'Sustainability is seen as about more than meeting today’s standards,' says Randeni. 'It’s about transforming business models to create a lasting, meaningful, positive impact.
More information
Visit ACCA's sustainability hub, which offers resources and support, and read ACCA’s guide to sustainability reporting
Read AB article ‘Building ESG into due diligence‘ and the related ACCA report Sustainability in transactions
