In spite of the fact that Sri Lanka has a relatively high Human Development Index (HDI) overall, the majority of families living in coastal areas fall into the poorest category. This Poverty Environment Nexus study was intended to assess the main causal mechanisms that bring about poverty and environmental degradation. Having determined this, the study then attempted to identify, from the quantitatively driven empirical analysis, which groups (gender, ethnic or economic) are hardest hit by environmental degradation. Policy recommendations for “Enhancing Sustainable Livelihoods” was the most important output of the study.