The Colombo Stock Exchange (CSE) launched the GSS+ Bonds Regulatory Framework in March in alignment with evolving global standards.
This marks the first comprehensive regulatory framework in Sri Lanka dedicated to thematic bonds.
Under this initiative, the term “Sustainability Bonds” in the CSE Listing Rules has been replaced with “GSS+ Bonds”, which now encompasses Green, Blue, Social, Sustainability, and other related bond types, including Sustainability-linked Bonds.
Social Bonds are fixed-income instruments where proceeds are exclusively allocated to finance or refinance projects aimed at addressing social challenges and generating positive social outcomes — such as improved access to essential services, affordable housing, education, healthcare, and employment opportunities.
The global Social Bond market has seen significant growth in recent years, driven by rising investor interest in fostering inclusive and sustainable development.
The requirements for issuing GSS+ Bonds are now fully aligned with the guidelines of the International Capital Market Association (ICMA). This alignment ensures consistency with globally accepted practices and enhances the credibility and transparency of the sustainable finance instruments listed on the CSE.
The verification framework has also been enhanced. In addition to the previously accepted forms of assurance and impact reporting, issuers may now utilise enhanced methods such as Second Party Opinion and Certification, providing additional layers of investor confidence and credibility.
These rule enhancements were made possible through the collaborative efforts of the Asian Development Bank (ADB) and the Securities and Exchange Commission (SEC) of Sri Lanka, underscoring the commitment of all stakeholders to elevate 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, while also offering investors the opportunity to align their investment strategies with Environmental, Social, and Governance (ESG) principles.
The introduction of GSS+ offers wide-ranging benefits. For issuers, it opens access to a new pool of capital dedicated to funding projects with positive social outcomes. Investors gain an opportunity to diversify their portfolios with instruments that deliver both financial and social returns. At a broader level, the initiative supports responsible capital allocation and contributes to key national development priorities such as poverty alleviation, gender equality, access to healthcare, and inclusive education.
