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How do Sustainability-Linked Bonds (SLBs) differ fundamentally from Green or Social Bonds regarding the utilization of funds?

Q: Answer-How do Sustainability-Linked Bonds (SLBs) differ fundamentally from Green or Social Bonds regarding...

Unlike green or social bonds where proceeds are restricted to specific projects, proceeds from SLBs can be used for general corporate purposes. Instead, the bonds financial terms like coupon rates are tied to meeting predefined ESG targets KPIs and SPTs.

A Proceeds from SLBs can only be given as direct grants to international environmental NGOs.

B Proceeds from SLBs can be used for general corporate purposes, while financial terms depend on meeting predefined ESG targets.

C Proceeds from SLBs must be shared equally between government infrastructure and public health schemes.

D SLBs do not raise any actual capital and function purely as a corporate credit rating mechanism.

E SLBs require the issuer to completely shut down all carbon-heavy operations within 12 months.

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How do Sustainability-Linked Bonds (SLBs) differ fundamentally from Green or Social Bonds regarding the utilization of funds?

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