Company Profile · Manufacturing & Industrial · ~10 min read
Haycarb Disclosure Profile
Haycarb PLC’s sixth Integrated Annual Report, for the year ended 31 March 2026, is the company’s first filing in the mandatory SLFRS S1 and S2 period. This profile records what the report discloses and what it does not, scored against ESGNexus Disclosure Grading Methodology v1.2.
Why we profiled this company
Haycarb is not the largest company in its sector by market capitalisation and is not profiled as a sector leader. It entered the pipeline because it published two documents covering the same financial year with materially different disclosure postures — a six-month interim report carrying no frameworks and no assurance, and a fully assured integrated annual report — and because it is the first manufacturing-sector filer in the first mandatory SLFRS cohort to disclose Scope 3. Both documents were read; the annual report is the one graded.
| Snapshot — Haycarb PLC | |
|---|---|
| Company (legal name + ticker) | Haycarb PLC (HAYC.N0000), Colombo Stock Exchange Main Board |
| Sector | Manufacturing & Industrial — coconut shell activated carbon |
| Market-cap rank in sector | Not the sector’s largest. Profiled on pipeline priority, not as sector leader: Haycarb published two documents covering the same financial year with materially different disclosure postures, and is the first manufacturing filer in the mandatory cohort to carry assurance across all three of its disclosure sets. |
| Financial year covered | FY2025/26 (ended 31 March 2026) — first mandatory SLFRS period for a March year-end filer |
| Reporting frameworks | SLFRS S1 and SLFRS S2; GRI Universal Standards; SASB Chemicals; <IR> Framework; TCFD; UN SDGs. The company states the standards “informed the preparation of this Report” and that disclosures are “aligned with” SLFRS S1 and S2 — no “in accordance with” assertion is made (pp. 7, 9, 11) |
| External assurance | Three engagements. Ernst & Young, limited assurance on the SLFRS S1 and S2 disclosures (SLSAE 3000 Revised, unqualified, 5 June 2026, pp. 112–113). Ernst & Young, limited assurance on GRI EESG indicators (pp. 114–115). Control Union Inspections, reasonable assurance on the FY2025/26 organisational GHG inventory to ISO 14064-1:2018 (p. 184). The emissions reduction target itself carries no assurance — the report says so (p. 103) |
| Materiality process | Double materiality, annual. Five named inputs — external environment, strategy, risks and opportunities, stakeholder perspectives, double materiality assessment — producing 20 material topics graded High/Medium/Low, mapped to strategy, capitals, risks and GRI. Validated by the Corporate Management Team, approved by the Board, aligned to the Hayleys Group Material Assessment Policy. GRI 3-1 to 3-3 (pp. 146–149). A separate quantified financial materiality threshold uses profit before tax: above ~10% high, 7–10% medium, 3–7% low, ≤3% very low (p. 64). Not independently facilitated |
| Scope 1 & 2 emissions | 29,369 tCO₂e combined, FY2025/26 — Scope 1 13,303 tCO₂e; Scope 2 16,066 tCO₂e (location-based only; no market-based figure disclosed). Four-year series and gas-by-gas Scope 1 breakdown given. Scope 2 recalculated from the base year on country-specific grid factors. ISO 14064-1:2018 (pp. 184, 186) |
| Scope 3 / financed emissions | Disclosed: 20,416 tCO₂e across 7 of the 15 GHG Protocol categories — capital goods, fuel- and energy-related activities, upstream and downstream transport and distribution, waste generated in operations, business travel, employee commuting. Category 1, purchased goods and services, is not measured. No date or timeline is given for extending coverage (pp. 184–185) |
| Climate scenario analysis | Performed. Two named pathways: IPCC AR6 SSP1-2.6 (“Net Zero”, ~1.8°C by 2100) and SSP2-4.5 (“Divergence”, ~2.7°C), with IEA Net Zero Emissions and Announced Pledges scenarios for transition. Four climate risks and opportunities assessed across three horizons with quantified downside bands and PBT-calibrated sensitivity labels; inputs, assumptions and uncertainties listed (pp. 96–99) |
| Net-zero / carbon target | Absolute gross Scope 1 and 2 reduction of 25% by 2030 against a 2022–23 base period, with a 14.3% interim milestone by 2027. Not derived by a Sectoral Decarbonisation Approach; no carbon credits used; stated as aligned to the Paris Agreement. No net-zero date stated. Reviewed quarterly by the Sustainability Steering Committee and reported to the Board (p. 103) |
| Board climate governance / ESG oversight | Board holds responsibility for the sustainability roadmap and reviews climate developments quarterly. Deputy Managing Director accountable for ACTIVATE implementation. ESG Steering Committee chaired by the Managing Director, drawn from all functions. Audit Committee owns the integrity of sustainability disclosures and met three times during 2025/26 on sustainability and climate risk. A FY2025/26 self-assessment of Audit Committee competency in climate risk, scenario analysis and reporting frameworks identified a need for further climate risk training (pp. 44, 65–67) |
| Board independence | Not assessed in this profile — see the corporate governance section of the report |
| CSR commitment | No monetary commitment or ratio stated. ACTIVATE 2030 sets a 50% increase in CSR beneficiaries from a 2022/23 base of over 100,000 |
| ESGNexus disclosure assessment | Comprehensive 6.5 of 7 applicable criteria (0.93), Methodology v1.2. Six Present, criterion 3 Partial. Disclosed: three assurance engagements, two named climate scenarios, a full SLFRS S2 target disclosure and a documented materiality method. Not disclosed: Scope 3 Category 1, purchased goods and services, with no date attached to measuring it; the company frames its SLFRS disclosure as a focused selection of seven matters. |
Source: Haycarb PLC Integrated Annual Report 2025/26, pages as cited. Assessed against ESGNexus Disclosure Grading Methodology v1.2.
Key takeaways
- Haycarb is the only company ESGNexus has graded whose sustainability disclosures carry three assurance engagements: limited assurance on the SLFRS S1 and S2 disclosures, limited assurance on the GRI indicators, and reasonable assurance on the GHG inventory to ISO 14064-1:2018.
- Category 1 of the GHG Protocol — purchased goods and services — is absent from the Scope 3 inventory. For a company whose principal input is coconut shell charcoal, that is the largest upstream category, and the report gives no date for measuring it.
- The company quantifies the financial climate risk in its raw material chain at LKR 29.2–43.9 billion over the long term. It does not quantify the emissions in that same chain.
- Scope 1 and 2 emissions of 29,369 tCO₂e stand 7.9% above the 2022–23 base period on which the company’s 25% reduction target is defined. The report discloses both figures and states only the 1% year-on-year movement.
- The climate scenario analysis names its pathways — IPCC AR6 SSP1-2.6 and SSP2-4.5, with IEA transition scenarios — and publishes its inputs, its assumptions and the assumption it excludes.
A Manufacturer That Sells Decarbonisation
Haycarb makes activated carbon from coconut shells. Its products purify water and air and increasingly go into energy storage, which places the company on the supply side of the energy transition it is also exposed to. Group revenue for the year ended 31 March 2026 was Rs. 67.1 billion, profit after tax Rs. 4.3 billion, with 2,084 employees, 16 subsidiaries and two associates across eleven countries and roughly 16% of the global coconut shell activated carbon market. Sri Lankan assets account for 61% of the group balance sheet.
That business model creates a specific disclosure problem. The raw material is an agricultural commodity grown in monsoon-dependent tropical regions, and the company’s climate exposure is concentrated upstream, in a supply chain it does not own.
Disclosure And Frameworks
The FY2025/26 integrated annual report cites SLFRS S1 and S2, GRI Universal Standards, SASB’s Chemicals standard, the <IR> Framework, TCFD and the UN SDGs. The framing is careful: the standards “informed the preparation of this Report” and the disclosures are “aligned with” SLFRS S1 and S2. There is no “in accordance with” assertion, and the SLFRS section states that it covers a “focused selection” of seven matters — four climate-related and three sustainability-related risks and opportunities — on an explicit proportionality basis. Readers should hold both facts together: the disclosure that exists is unusually complete, and the company has not claimed it is exhaustive.
The materiality process is set out rather than asserted. Five inputs feed a double materiality assessment producing twenty topics, each graded for impact and mapped to strategy, capitals, principal risks and GRI disclosures. Changes are disclosed — “Energy cost” was added this year and “Marketing and labelling” dropped. The assessment is validated by the Corporate Management Team and approved by the Board. Separately, and more unusually, the report publishes a quantified financial materiality threshold expressed against profit before tax: an adverse effect above roughly 10% of PBT is high, 7–10% medium, 3–7% low. Most first-cohort filers assert materiality; few show the ruler.
Assurance is where this report separates from its peers. Ernst & Young issued an unqualified limited assurance conclusion on the SLFRS S1 and S2 disclosures under SLSAE 3000 (Revised) on 5 June 2026, and a second limited assurance report on the GRI indicators. Control Union Inspections provided reasonable assurance — the higher level — over the organisational GHG inventory under ISO 14064-1:2018. Two qualifications, both stated by the company rather than found by us: the emissions reduction target itself is unassured, and the materiality process is validated internally, not independently.
Environmental Disclosure
Scope 1 emissions were 13,303 tCO₂e and Scope 2 (location-based) 16,066 tCO₂e, with a four-year series and a gas-by-gas Scope 1 breakdown. No market-based Scope 2 figure is given. Scope 3 was reported at 20,416 tCO₂e across seven of the fifteen GHG Protocol categories.
Energy consumption rose 8% to 1,237,238 GJ, of which 77% was renewable — though that share is overwhelmingly self-generated waste heat recovery (917,470 GJ) rather than procured or generated renewable electricity, with solar contributing 10,685 GJ. Energy intensity improved from 26.24 to 18.44 GJ per Rs. million of revenue. Water withdrawal rose 14% to 791 ML, and the report discloses that approximately 82% of group withdrawal and consumption occurs in areas rated High or Extremely High baseline water stress on the WRI Aqueduct Atlas. Waste generation was 5,042 MT with an 88% diversion rate.
On targets, the report does what SLFRS S2 asks, and few filers manage: it publishes a full target architecture. The Scope 1 and 2 commitment is a 25% absolute gross reduction by 2030 against a 2022–23 base period, with a 14.3% interim milestone at 2027. The disclosure states the boundary, target type, the decision not to use a Sectoral Decarbonisation Approach, the non-use of carbon credits, quarterly review by the Sustainability Steering Committee, the next review date, and the absence of assurance. What is missing from that disclosure is progress against the base period — discussed below.
Social And Governance Disclosure
Social targets under ACTIVATE 2030 are dated and quantified against 2022/23 baselines: 40 hours of training per employee annually (from nine), attrition at or below 5%, recordable injury and lost-time injury frequency rates below 1 (from 1.8 and 0.9), and a 50% increase in CSR beneficiaries from a base above 100,000. No monetary CSR commitment or ratio is disclosed.
Climate governance is described with allocated accountability rather than boilerplate. The Board holds responsibility for the sustainability roadmap and reviews climate developments quarterly. The Deputy Managing Director is accountable for implementing ACTIVATE. The Managing Director chairs the ESG Steering Committee and draws members from every function. The Audit Committee owns the integrity of sustainability disclosures and met three times during the year specifically on sustainability and climate risk, under a Three Lines of Defence model.
One disclosure deserves particular notice. The company conducted a self-assessment of Audit Committee members’ competency in climate risk assessment, scenario analysis and sustainability reporting frameworks. It published the result: strengths in financial materiality and risk governance, and a need for enhanced training in climate risk management. Publishing the gap in your own board’s climate literacy is not a common act.
How We Assess The Disclosure
ESGNexus grades disclosure completeness against a published, equal-weighted, page-referenced checklist of seven criteria drawn from SLFRS S1 and S2 (Disclosure Grading Methodology v1.2). We assess what the report does and does not disclose — not the company’s underlying performance. Each criterion is marked Present, Partial or Absent (or N/A where it genuinely does not apply); the score is elements present divided by applicable elements, mapped to a band. The full checklist below is reproducible: the same report and this rubric should yield the same result.
| # | Criterion | Score | Basis (as disclosed) |
|---|---|---|---|
| 1 | Materiality assessment disclosed, with method shown | Present | Annual double materiality assessment with the process set out: five named inputs, organisational and impact materiality criteria itemised, 20 topics graded High/Medium/Low and mapped to strategy, capitals, risks and GRI; movement year on year disclosed (“Energy cost” added, “Marketing and labelling” removed). Validated by the Corporate Management Team, approved by the Board. GRI 3-1 to 3-3 (IAR 2025/26, pp. 146–149). A separate PBT-banded financial materiality threshold is disclosed (p. 64). No numeric topic scoring or external facilitation is shown. |
| 2 | Scope 1 and Scope 2 GHG emissions quantified, with methodology | Present | Scope 1 13,303 tCO₂e; Scope 2 (location-based) 16,066 tCO₂e, FY2025/26, with a four-year series and a gas-by-gas Scope 1 breakdown. Basis stated: ISO 14064-1:2018, third-party verified by Control Union Inspections; Scope 2 recalculated from the base year on country-specific grid emission factors (pp. 184, 186). No market-based Scope 2 figure. |
| 3 | Scope 3 / financed emissions disclosed or explicitly deferred | Partial | Quantified: 20,416 tCO₂e across 7 of the 15 GHG Protocol categories, named individually (capital goods; fuel- and energy-related activities; upstream and downstream transport and distribution; waste generated in operations; business travel; employee commuting) (pp. 184–185). The eight unmeasured categories include Category 1, purchased goods and services — the raw material supply chain, and on the company’s own scenario analysis its principal climate exposure. The report commits only to “explore opportunities to expand category coverage”, with no date, reporting year or timeline. Methodology v1.2 grants Present to partial-category measurement only where the undisclosed categories are deferred with a stated date, so Present is unavailable here; Partial is the highest defined value the text supports. |
| 4 | Climate scenario analysis actually performed | Present | Performed for FY2025/26 against two named pathways — IPCC AR6 SSP1-2.6 (Net Zero, ~1.8°C) and SSP2-4.5 (Divergence, ~2.7°C) — supported by IEA Net Zero Emissions and Announced Pledges scenarios and country NDCs. Four climate risks and opportunities assessed across short, medium and long horizons with quantified downside bands and sensitivity labels calibrated to profit before tax. Inputs, assumptions, excluded assumptions and uncertainties are listed (pp. 96–99). |
| 5 | Board-level climate governance described concretely | Present | Named structure with allocated mandates: Board responsible for the sustainability roadmap and reviewing climate developments quarterly; Deputy Managing Director accountable for ACTIVATE implementation; ESG Steering Committee chaired by the Managing Director with cross-functional membership; Audit Committee responsible for the integrity of sustainability disclosures, meeting three times during 2025/26 on sustainability and climate risk. A competency self-assessment of Audit Committee members on climate risk, scenario analysis and reporting frameworks was conducted and its shortfall disclosed (pp. 44, 65–67). |
| 6 | Quantified targets with baseline year and target date | Present | Absolute gross Scope 1 and 2 reduction target: 25% by 2030 against a 2022–23 base period, with a 14.3% interim milestone by 2027. Boundary, target type, non-use of carbon credits, jurisdictional alignment, quarterly review process and next review date all stated; the report also states that no third-party assurance has been obtained for the target (p. 103). Supported by dated ACTIVATE 2030 targets on sourcing, energy, water and waste with 2022/23 baselines. |
| 7 | Integration: mainstream financial report vs. quarantined standalone CSR section | Present | Sustainability is a primary section of the integrated report, not an annex: SLFRS S1 and S2 disclosures occupy pp. 63–111 ahead of the capitals; environmental data sits in Natural Capital (pp. 170–195); material topics are mapped to strategy, capitals, principal risks and GRI; ACTIVATE is presented as “the core of value creation” (p. 44). The SLFRS disclosures sit inside the assurance boundary. |
Overall band: COMPREHENSIVE — 6.5 of 7 applicable criteria (0.93), against Methodology v1.2. Six criteria Present; criterion 3 Partial. The single mark below Present is Scope 3: the inventory omits Category 1, purchased goods and services, with no date attached to measuring it. Separately, the company frames its SLFRS disclosure as a focused selection of seven matters. A Comprehensive band means the report discloses the required elements. It is not a statement that the company asserts full SLFRS S1 and S2 compliance — Haycarb describes its disclosures as “aligned with” the standards and does not claim to report in accordance with them.
Interpretation note. Methodology v1.2 does not define a value for a Scope 3 disclosure that is quantified but covers only some categories with the remainder undated. Present is denied by the standard’s dated-deferral proviso; the 0.25 and zero values each describe a filer that has quantified nothing, and applying either would rank Haycarb below a company that measured nothing at all. Partial is therefore the highest defined value available. This is an interpretation of v1.2, not an amendment to it: v1.2 is fixed through FY2026/27, and the case is recorded in the ESGNexus interpretations register for the next scheduled methodology review.
Alongside the checklist, we characterise the disclosure on four qualitative dimensions — completeness, comparability, credibility and candour — each rated against cited evidence. These carry the nuances the checklist score does not.
| Dimension | Assessment | Basis (as disclosed) |
|---|---|---|
| Completeness | Solid | Environmental, social and governance data are all quantified with four-year series and framework indexing. Two limits keep this below Leading: Scope 3 covers 7 of 15 categories with the largest upstream category unmeasured and undated (pp. 184–185), and the SLFRS disclosure set is framed by the company as a “focused selection” of seven matters prepared on a proportionality basis (pp. 64–65) rather than a complete inventory of material risks. |
| Comparability | Solid | GRI Universal Standards and SASB Chemicals codes appear on the face of the data tables; SLFRS S1/S2 and <IR> structure the report; four-year comparatives are given and Scope 2 has been recalculated to the base year (p. 186). Against that: the four-year Scope 3 series moves from 2,444 tCO₂e (2022/23) to 20,416 tCO₂e (2025/26) and the report states only that coverage matches the previous year — the category coverage behind the two earliest years is not stated, so the series is not evidently like-for-like (p. 184). |
| Credibility | Leading | Three separate assurance engagements: EY limited assurance on the SLFRS S1 and S2 disclosures under SLSAE 3000 (Revised), unqualified, dated 5 June 2026; EY limited assurance on GRI EESG indicators; and Control Union reasonable assurance on the GHG inventory to ISO 14064-1:2018 (pp. 112–117, 184). No profile graded by ESGNexus to date carries assurance across all three. Two qualifications, both disclosed by the company: the emissions target is unassured (p. 103), and the materiality process is validated internally by management and the Board rather than independently. |
| Candour | Solid | The report discloses unfavourable results rather than burying them: Scope 1 and 2 emissions rose 1% year on year (p. 103); production-based emission intensity rose from 0.60 to 0.61 tCO₂e per MT (p. 184); water intensity is flagged as requiring acceleration; the emissions target is stated to be unassured; the Audit Committee competency self-assessment records a training gap (p. 67); and the scenario analysis names the assumption it excludes. What the report does not present is performance against its own 2022–23 base period — the comparison on which its headline target is defined. |
Where The Disclosure Leads — And Where It Lags
On the elements the checklist tests, Haycarb’s disclosure is more complete than any other filing ESGNexus has graded to date: three assurance engagements, one of them at the reasonable level. Two named climate scenarios with their inputs, assumptions and exclusions published. A target disclosure carrying the full set of SLFRS S2 attributes, including the statement that the target is unassured. A materiality method with a numeric threshold attached. A board competency self-assessment whose finding was printed rather than summarised away. Six of the seven criteria are marked Present.
Two things lag, and both are specific. One of them is the only mark on the checklist below Present.
The first is the uncounted chain. Haycarb measures seven Scope 3 categories: capital goods, fuel- and energy-related activities, upstream and downstream transport, waste, business travel and employee commuting. It does not measure Category 1, purchased goods and services. For a manufacturer whose principal input is coconut shell charcoal bought from supplier networks across South and Southeast Asia, Category 1 is almost certainly the largest single line in the inventory. The report does not explain the omission or give a date for closing it, committing only to “explore opportunities to expand category coverage”. The coverage is also unchanged from last year, despite the section being headed “Expanding Scope 3 emissions transparency”.
The sharpness of that gap comes from what sits beside it. The same report prices the climate risk in that same raw material chain with real precision: incremental raw material cost of LKR 5.5–8.3 billion in the short term, LKR 14.3–22.8 billion in the medium term and LKR 29.2–43.9 billion in the long term under its scenario analysis. The company also targets sourcing more than 75% of its charcoal sustainably by 2030, from 46% today. So the chain is identified as the principal climate exposure, quantified in rupees, and given a sourcing target — and its emissions are not counted. The financial risk is measured. The carbon is not.
The second is the missing comparison. The report discloses, in one table on page 184, Scope 1 and 2 emissions of 29,369 tCO₂e for 2025/26 and 27,211 tCO₂e for 2022/23. The 2022–23 figure is the base period for the company’s 25% reduction target. On the company’s own disclosed numbers, absolute Scope 1 and 2 emissions are therefore 7.9% higher than the baseline, four years into a target period that runs to 2030 and carries a 14.3% reduction milestone at 2027. The report states the year-on-year movement — a 1% increase — and does not state the movement against the base period. This is ESGNexus arithmetic on figures the company published, not a company disclosure, and we present it as such. The point is not that emissions rose; growing manufacturers often see absolute emissions rise, and the report is candid that the target requires acceleration. The point is that the report supplies every number needed for the comparison its own target is defined on, and does not make it.
A third, smaller matter belongs in any analyst’s notes. The four-year Scope 3 series runs 2,444, 2,308, 16,457 and 20,416 tCO₂e. The report confirms that this year’s coverage matches last year’s but says nothing about the two earlier years, leaving an eightfold step between 2023/24 and 2024/25 unexplained. A reader cannot tell how much of that is expanded measurement and how much is real. Similarly, the renewable share of 77% is dominated by recovered process waste heat rather than renewable electricity — disclosed clearly enough to work out, but not framed.
What This Means For Investors And Peers
- For investors and lenders, the assurance stack is the substantive signal. Reasonable assurance on a GHG inventory and unqualified limited assurance on the SLFRS disclosures materially reduce the risk that these figures are restated, and they make Haycarb’s numbers usable in a way that most of the cohort’s are not. The open question is not data quality but data boundary: an inventory missing Category 1 understates value-chain exposure by an unknown amount, and customers subject to CSRD or similar buyer-level requirements will ask for that category by name.
- For sector peers preparing a first or second mandatory filing, the transferable lessons are cheap to copy and are what moved this grade: publish the materiality threshold rather than asserting materiality; name the scenarios and list the assumptions, including the ones excluded; use the standard’s target template in full, including the assurance status of the target; and state progress against the base period, not only against last year. That last one costs nothing and is the difference between a target disclosure and a target.
- For the regulator, Haycarb demonstrates that a mid-cap manufacturer can meet the substance of SLFRS S1 and S2 in the first mandatory period, with assurance. That removes capacity as a general excuse. It also shows where the standard’s first-year latitude is being used: partial Scope 3 coverage with no committed date is legal, widespread, and the single largest remaining hole in Sri Lankan climate disclosure.
Sources & Further Reading
Haycarb PLC, 6th Integrated Annual Report 2025/26 (year ended 31 March 2026), published 16 July 2026 — haycarb.com
Haycarb PLC, Independent Practitioner’s Assurance Report on SLFRS S1 and S2 Disclosures, Ernst & Young, 5 June 2026, pp. 112–113
Haycarb PLC, Independent Practitioner’s Assurance Report on GRI EESG Indicators, Ernst & Young, pp. 114–115
Haycarb PLC, ACTIVATE — ESG Roadmap 2030 — haycarb.com
Haycarb PLC, Sustainability Impact Report 2025/26, January 2026 (six-month interim, April–September 2025; context only, not graded) — haycarb.com
ESGNexus Disclosure Grading Methodology v1.2 — esgnexus.lk
About ESGNexus
ESGNexus is Sri Lanka’s independent platform for ESG, CSR, and sustainability intelligence. We track company-level ESG performance, regulatory developments, and sustainability data across Sri Lanka’s listed companies, large unlisted corporates, and state-owned enterprises. All editorial content is independently produced. Sponsored content is clearly labelled.
Data disclaimer: This profile is compiled from Haycarb PLC’s publicly available reports and other public sources, for general information only. It is not investment advice and not a comprehensive audit of the company’s sustainability performance. ESGNexus does not independently verify company disclosures; figures are as reported by the company. Assessments reflect the quality of disclosure, not a certification of underlying performance. ESGNexus corrects errors promptly; to flag one, contact the editorial team. Errors and omissions excepted.