What is a Green Bond?

A Green Bond is specifically designed to finance projects that have positive environmental or climate benefits. This includes investments in renewable energy, energy efficiency, waste management, pollution prevention, sustainable land use, and biodiversity conservation. By focusing on projects that contribute to environmental sustainability, Green Bonds aim to promote eco-friendly initiatives and attractive returns for investors who are interested in socially responsible investments.

The other options do not capture the primary purpose of Green Bonds. For instance, while real estate projects or infrastructure development can sometimes be associated with environmental goals, not all such projects qualify as Green Bonds unless they specifically aim to address climate change or enhance environmental quality. Additionally, financing government deficits does not align with the concept of Green Bonds, as these bonds are strictly geared towards financing sustainable projects rather than general fiscal management or deficit funding.