A 'Green Bond' is a fixed-income financial instrument whose proceeds are strictly earmarked and ring-fenced for projects that have positive environmental or climate-related benefits, such as renewable energy or clean transportation.
- True
- False
Answer: True
Green Bonds are identical to standard corporate or sovereign bonds in terms of their financial structure, but they carry a 'use of proceeds' covenant. Issuers must undergo rigorous third-party verification to ensure the raised capital is exclusively funding sustainable, eco-friendly projects, allowing environmentally conscious institutional investors to align their portfolios with global ESG (Environmental, Social, and Governance) goals.