The Colombo Stock Exchange (CSE) is pleased to announce the launch of the GSS+ bond regulatory framework, effective from March 2025. This marks Sri Lanka’s first comprehensive regulatory framework dedicated to thematic bonds.
Under this initiative, the term “sustainability bonds” in the CSE Listing Rules has been replaced with “GSS+ bonds”, which now includes other relevant bond types including green, blue, social, sustainability and sustainability-related bonds.
Social bonds are fixed income instruments where the proceeds are earmarked exclusively for financing or refinancing projects that address social challenges and generate positive social outcomes, such as improved access to essential services, affordable housing, education, healthcare and employment opportunities. The global social bond market has shown significant growth in recent years, driven by growing investor interest in fostering inclusive and sustainable development.
In a significant development, the requirements for the issuance of GSS+ bonds are now fully aligned with the International Capital Markets Association (ICMA) guidelines. This alignment ensures consistency with globally accepted practices and enhances the credibility and transparency of sustainable financial instruments listed on the CSE.
The verification framework has also been enhanced. In addition to previously accepted forms of assurance and impact reporting, issuers can now use enhanced methods such as second-party opinion and certification, which provide additional layers of investor confidence and credibility.
These rule improvements were made possible through the collaborative efforts of the Asian Development Bank (ADB) and the Securities and Exchange Commission of Sri Lanka (SEC), and underscore the commitment of all stakeholders to enhance Sri Lanka’s sustainable finance landscape to meet international best practices.
The primary objective of this initiative is to enable capital raising for projects with measurable environmental and social impact and to provide investors with the opportunity to align their investment strategies with environmental, social and governance (ESG) principles.
The introduction of GSS+ offers a wide range of benefits. For issuers, it opens up access to a new pool of capital dedicated to funding projects with positive social outcomes. Investors have the opportunity to diversify their portfolios with instruments that deliver both financial and social benefits. At a broader level, this initiative supports responsible capital allocation and contributes to key national development priorities such as poverty alleviation, gender equality, access to healthcare and inclusive education.
Commenting on the launch, Mr. Rajeeva Bandaranaike, CEO of the Colombo Stock Exchange, said, “The introduction of GSS+ to the Sri Lankan capital market represents a significant step in our journey to promote sustainable finance. This initiative not only expands the suite of sustainable investment products available in the market, but also empowers issuers to raise funds for socially impactful projects that can create lasting change in our communities.”
“We are proud to support this important development, which reflects our continued commitment to align capital market infrastructure with global best practices and play an active role in Sri Lanka’s sustainable economic growth.”
CSE is committed to advancing ESG-aligned initiatives and providing market participants with robust frameworks for sustainability-based investments. The introduction of GSS+ bonds strengthens CSE’s role in facilitating financial innovations that meaningfully contribute to national and global development goals.
