ICAEW SE · Chapter 4 · Question 8 of 18
Which of the following is the defining feature of a green bond?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) The money raised must be used to finance projects with environmental benefits
Explanation
Green bonds are 'use of proceeds' instruments: the funds raised are earmarked for eligible environmental projects, such as renewable energy or energy efficiency. They are typically supported by reporting on how the proceeds were spent. Their pricing, investor base and maturity are not what define them.
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