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Q57 (IAS/2026) Economy › Money, Banking & Inflation Official Key

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

Result
Your answer: —  ·  Correct: C

Explanation

A Sustainability Bond is a type of debt instrument where the proceeds are exclusively applied to finance or re-finance a combination of both environmental (green) and social projects. They align with the Sustainability Bond Guidelines, which integrate the core components of both Green Bond Principles and Social Bond Principles.

  • Green Bonds are used exclusively to finance projects that have positive environmental and climate benefits.
  • Social Bonds are used exclusively to finance projects that aim to achieve positive social outcomes.
  • Sovereign Bonds are debt securities issued by a national government to finance its spending, regardless of whether the projects are environmental, social, or general administrative.

    • Therefore, a bond combining both green and social objectives is known as a Sustainability Bond.

    How others answered
    Each bar shows the % of students who chose that option. Green bar = correct answer, blue outline = your choice.
    Community Performance
    Out of everyone who attempted this question.
    44%
    got it right

    PROVENANCE & STUDY PATTERN

    Guest preview
    Don’t just practise – reverse-engineer the question. This panel shows where this PYQ came from (books / web), how the examiner broke it into hidden statements, and which nearby micro-concepts you were supposed to learn from it. Treat it like an autopsy of the question: what might have triggered it, which exact lines in the book matter, and what linked ideas you should carry forward to future questions.
    A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called: [A] Green Bo…
    At a glance
    Origin: Mostly Current Affairs Fairness: Low / Borderline fairness Books / CA: 0/10 · 10/10
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    This is a classic terminology-based economy question driven by current affairs in sustainable finance. While standard books might miss the exact ICMA definition, the nomenclature itself gives away the answer. It's a highly scoring 'sitter' if you apply basic common sense to the options.

    How this question is built

    This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

    Statement 1
    What is the specific term for a bond whose proceeds are used exclusively to finance or refinance a combination of both environmental and social projects?
    Origin: Web / Current Affairs Fairness: CA heavy Web-answerable
    Web / Current Affairs
    www.oecd.org Standard ref
    Presence: 5/5
    Why this source?
    • The IMF defines sustainability bonds as instruments that fund both environmental and social projects.
    • It distinguishes them from green bonds (environmental only) and social bonds (social only).
    • The definition aligns with the International Capital Market Association (ICMA) guidelines.
    documents1.worldbank.org Standard ref
    Presence: 5/5
    Why this source?
    • The OECD defines these bonds as fixed-income instruments where proceeds are exclusively applied to a combination of environmental and social projects.
    • It references the ICMA definition which is the global standard for such debt instruments.
    • The source explicitly mentions the 'finance or refinance' aspect of the proceeds.
    www.hrcollege.edu Standard ref
    Presence: 5/5
    Why this source?
    • The World Bank identifies sustainability bonds as debt instruments raising money for a combination of green and social projects.
    • It notes that the Sustainability Bond Guidelines (SBG) are aligned with both Green and Social Bond Principles.
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    SIMILAR QUESTIONS

    CISF · 2023 · Q59 Relevance score: 0.23

    Consider the following statements related to 'Sovereign Green Bonds':
    1. Union Budget 2021-22 announced the issue of these bonds
    2. The Government of India has approved a Sovereign Green Bonds Framework
    3. These bonds are meant to be issued for mobilizing resources for green projects
    4. These bonds are financial instruments that generate proceeds for investment in environmentally sustainable and climate suitable projects
    How many of the above statements are correct?

    CDS-II · 2024 · Q78 Relevance score: -5.00

    Long-Term Low Emissions Development Strategy envisions: 1. A transition from fossil fuels in a just, smooth, sustainable manner. 2. Increased use of bio-fuels. 3. Climate resistant urban development. 4. Financing of sustainable development through Green Bonds. Select the answer using the code given below:

    CAPF · 2025 · Q23 Relevance score: -5.57

    The Union Budget for which of the following years announced the issue of Sovereign Green Bonds to reduce the carbon intensity of the economy?

    CDS-I · 2021 · Q61 Relevance score: -6.75

    The asset or assets that a borrower pledges in order to guarantee repayment of a loan is called as