Explain the Environmental, Social and Governance linked Bonds.

Environmental, Social and Governance-linked bonds (ESG): These bonds carry a responsibility of the issuer company to prioritize optimal environmental, social and governance (ESG) factors. Investing in ESG bonds is considered as socially responsible investing. ESG bonds can be project-based - green bonds and social bonds; and target-based - sustainability-linked bonds (SLBs). Green bonds: These are the most popular ESG bonds that are issued by a financial, non-financial or public institution, where the bond proceeds are used to finance “green projects”. Green projects are aimed at positive environmental and/or climate impact including the cultivation of eco-friendly technology. Social bonds: These bonds finance the socially impactful projects. The projects here are related to the social concerns such as Human rights, Equality, animal welfare etc. Sustainability-linked bonds (SLBs): These bonds are combination of green bonds and social bonds. Proceeds of SLBs are not meant for a specific project but for general corporate purpose to achieve Key Performance Indicator (KPIs).