A global electronics manufacturer experiences severe flooding in one of its key locations. Company senior management will mitigate supply chain risk and adhere to environmental standards by issuing a bond. The bond proceeds will simultaneously address floodwater contaminated by industrial chemicals and assist communities experiencing deterioration of health conditions due to waterborne diseases.
Which bond is the company likely to issue?
The company is likely to issue a sustainability bond. Sustainability bonds are designed to finance projects that simultaneously address environmental and social objectives. In this case, the bond proceeds will be used to combat flooding and water contamination, which are environmental issues, as well as to improve health conditions in the community, which is a social objective.
Sustainability bonds are a combination of the two, in that they are meant to simultaneously address both environmen-tal and social objectives
Correct Answer is D: Sustainability bonds are a combination of the two, in that they are meant to simultaneously address both environmental and social objectives. B is wrong because there is no sustainability targets or incentive in this case study.
Sustainability-linked Bond is the most correct term.
What is the difference between answers B and D? To me they are the same
Green bonds aren't a combo, but sust bonds are