Growth that results in depleting the natural capital stock of a country is not smart as it cannot be sustained in the long term. Sustainability implies attaining the aspirations of current generation without compromising the capacity of future generations to do the same. In essence, it deals with inter-generational equity of human use of environmental resources. Sri Lanka is blessed with a habitable tropical environment all over the country that offers many eco-system services for the wellbeing of people. The rich stock of natural resources provides the essential launching pad for Sri Lanka’s post-conflict drive towards fast-track growth. Whether this endowment could bring in desired improvements to living standards of people, and more importantly, could it be maintained for the wellbeing of future generations, is largely a matter of how sensibly it is put into use. Recently, the idea of sustainability has given rise to more operational concepts such as ‘green growth’. Green growth advocates exploring new avenues of growth that ensure continuity of the natural capital stock. However, there is overwhelming evidence to believe that the present use of natural capital in Sri Lanka is not fulfilling the conditions necessary for green growth. The policies/strategies for green growth cover three broad areas of interest: (i) innovation and adoption of right technical solutions; (ii) polices for getting structure of incentives right; and (iii) policies for setting up right institutions.