Which type of bonds focus on projects with environmental benefits?

The correct answer is based on the specific focus of each type of bond. Green bonds are explicitly designed to fund projects that have positive environmental impacts. This includes financing renewable energy installations, energy efficiency projects, pollution prevention initiatives, and other environmentally friendly initiatives. Green bonds are recognized in the market for their commitment to sustainability and environmental stewardship, making them a key financing tool for addressing climate change and promoting ecological projects.

Sustainability bonds, on the other hand, may also support projects with both social and environmental benefits but do not focus solely on environmental projects. Social bonds target specific social issues such as affordable housing or economic development, rather than environmental concerns. Designated bonds is not a standard term recognized in this context and can often refer to any bonds earmarked for specified purposes, but they do not specifically denote a focus on environmental benefits the way green bonds do. Thus, the clear and defined mission of green bonds makes them the best answer in this context.