Sustainability and Climate Risk (SCR) — Question 41

To improve sustainability, a railroad and transportation services company will revitalize its rail network by installing an operating system that reduces idle time. A reduction in idle time will decrease GHG emissions. To finance this plan, the company will issue green bonds beginning in 2024. The company sustainability director develops sustainability objectives and eligibility criteria to communicate to investors.
The director is fulfilling which core component of the Green Bond Principles?

Answer options

• A. Process for project evaluation and selection
• B. Reporting
• C. Management of proceeds
• D. Use of proceeds

Correct answer: A

Explanation

The correct answer is A, as the director is developing objectives and criteria that will guide the evaluation and selection of projects financed by the green bonds. The other options, such as Reporting (B), Management of proceeds (C), and Use of proceeds (D), do not directly relate to the evaluation and selection process for the proposed sustainability initiatives.