A bond whose proceeds are used only to finance or refinance a combination of both environmental and social projects is called:

Answer: (c) Sustainability Bond

A sustainability bond funds a mix of green and social projects (ICMA guidelines).

The idea

These bonds are labelled by where the money goes. Money for environmental projects only: green bond. For social projects only (health, housing, education): social bond. For a mix of both: sustainability bond.

Green bond → environmental projects → Social bond → social projects → Sustainability bond → both together → Sustainability-linked bond → money for any use, but the interest rate depends on meeting a target

Why the others are wrong

(a) Green bonds fund only environmental projects.

(b) Social bonds fund only social projects.

(d) A sovereign bond is simply government debt.

Also know

Other colours: a blue bond funds ocean and water projects. India issued its first sovereign green bonds in January 2023. A sovereign bond is defined by who issues it (a national government), not by what it funds, so a bond can be both sovereign and green.