A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called:

Economy ·Previously asked in Union Public Service Commission Civil Services Examination 2026

View the full solved paper: GS Paper I 2026

Question

A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called:

  1. A. Green Bond
  2. B. Social Bond
  3. C. Sustainability Bond (Correct answer)
  4. D. Sovereign Bond

Correct Answer

Option C — C

Detailed Solution & Explanation

The correct answer is Option C.

Key Points

  • A Sustainability Bond raises money whose proceeds finance (or refinance) a combination of both green (environmental) and social projects.
  • That dual purpose is exactly what defines it.
  • these fall under the broader label of ESG / thematic bonds; India issued its first Sovereign Green Bonds in 2023 to fund public-sector green projects.

Additional Information

  • Green Bond (A): proceeds fund environmental/climate projects only (renewables, clean transport, water).
  • Social Bond (B): proceeds fund social projects only (affordable housing, healthcare, education, employment).
  • Sovereign Bond (D): a bond issued by a national government to raise general funds — defined by its issuer, not by a green/social use of proceeds.

Exam Tip

  • fix the trio by scope — Green = environment, Social = society, Sustainability = both.