Sustainability Bonds Definition
Question
A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called:
Options
Green Bond
Social Bond
Sustainability Bond
Sovereign Bond
Explanation
The correct answer is (c). Under international green finance taxonomies (such as the ICMA guidelines), a Sustainability Bond is explicitly defined as a debt instrument where the raised proceeds are allocated exclusively to fund a dual combination of both green environmental projects and positive social development projects. Green Bonds (a) target environmental projects exclusively, while Social Bonds (b) focus solely on social infrastructure like public healthcare or affordable housing.
Question details
Year
2026
Paper
GS Paper 1
Question
Q57
Subject
Economy
Sub-topic
Financial Markets & Instruments
Type
Factual single
Difficulty
Easy
Nature
Static
Source hint
International Capital Market Association (ICMA) Guidelines / Economic Survey
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