Sustainable finance
Use-of-Proceeds Bond
A bond whose proceeds are earmarked for defined eligible projects — the architecture of green, social and sustainability bonds.
Definition
A use-of-proceeds bond is a labelled bond whose proceeds are exclusively allocated to defined eligible project categories, governed by framework principles: the Green Bond Principles (environmental projects), Social Bond Principles (social projects) and Sustainability Bond Guidelines (a combination). The four core components — use of proceeds, project evaluation and selection, management of proceeds, and reporting — with external review recommended, distinguish these instruments from sustainability-linked bonds, where proceeds are general-purpose but pricing ties to KPIs.
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