Which of the following statements best describes a green bond?

A green bond is specifically designed to finance projects that have positive environmental impacts. The primary characteristic of green bonds is their use of proceeds; the funds raised through these bonds are earmarked for initiatives such as renewable energy projects, energy efficiency improvements, clean transportation, and sustainable water management, among others. This focus on financing environmentally friendly projects distinguishes green bonds from regular bonds, which may finance a variety of general corporate purposes without a specific environmental focus.

The other options do not adequately capture the essence of what defines a green bond. While some bonds may be assessed based on ratings or governance guidelines, these criteria apply more broadly to various types of bonds and do not specifically pertain to the environmental impact that green bonds are intended to achieve. The mention of "evergreen" bonds refers to structures that may have features allowing them to roll over indefinitely or require periodic refinancing, but again, this does not relate to the designated use of proceeds for environmental projects that characterize green bonds.