Bank of Ceylon achieved two "major milestones" with its inaugural LKR 20 billion ($63.4 million) Basel III–compliant tier 2 sustainability bond – the largest sustainability bond issuance in Sri Lanka and the first of its kind by a state-owned bank, with the judges acknowledging the "noteworthy achievement".

The transaction saw strong investor confidence while setting a new benchmark for integrating sustainability with regulatory capital requirements.

The innovation lies in the alignment of sustainability objectives with Basel III Tier 2 capital rules, while directing capital towards impactful green and social sectors.

Bank of Ceylon reports up to 75% of proceeds are allocated to social projects – including employment generation, food security, healthcare, education, and essential infrastructure – while 25% supports green initiatives such as renewable energy, energy efficiency, clean transportation, and sustainable water management.

The judges praised the fact that the issuance is underpinned by a Sustainable Finance Framework aligned with international standards, including the International Capital Market Association (ICMA) Green Bond Principles, Social Bond Principles and Sustainability Bond Guidelines, as well as Sri Lanka's Green Finance Taxonomy.

Bank of Ceylon also prioritised strong governance through a dedicated Sustainability Committee, a clear exclusion list, and integration of environmental and social risk management systems, with independent pre-issuance assurance provided by KPMG.

"Great to have sustainability bonds in Sri Lanka," commented one judge.