A bond issued to fund projects that provide a clear benefit to the environment best describes a:
Correct Answer: A
A green bond is a fixed-income instrument specifically earmarked to raise money for climate and environmental projects. These bonds can fund various projects that contribute to environmental sustainability, such as renewable energy, energy efficiency, pollution prevention, sustainable agriculture, and biodiversity conservation.
According to the CFA ESG Investing curriculum, green bonds are designed to help investors fund projects that have positive environmental benefits. These bonds have specific criteria andoften come with verification or assurance from third-party organizations to ensure that the funds are used appropriately and meet the defined environmental objectives.
References:
"Typically a green bond is a fixed income instrument tied to projects that create an environmental benefit.
Issuers use proceeds for activities aimed at contributing to climate change mitigation, adaptation, or other environmental benefits such as conservation or pollution control".