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UPSC Prelims 2026 GS Paper 1, question 92

Topic: Economy

Q92

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 BondCorrect answer
  4. (d) Sovereign Bond

Solution.

Answer: (c) Sustainability Bond

  1. According to the International Capital Market Association (ICMA) guidelines, a Sustainability Bond is a debt instrument whose proceeds are exclusively applied to finance or refinance a combination of both Green (environmental) and Social projects.
  2. Green Bonds finance only environmental projects, Social Bonds finance only social projects, and Sovereign Bonds are general government debt instruments.