Green bonds as a tool against climate change?

Serena Fatica and Roberto Panzica ()
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Roberto Panzica: European Commission, https://ec.europa.eu/jrc/en

No 2020-10, JRC Working Papers in Economics and Finance from Joint Research Centre, European Commission

Abstract: While green bonds are becoming increasingly popular in the corporate finance practice, little is known about their implications and effectiveness in terms of issuers' environmental engagement. Using matched bond-issuer data, we test whether green bond issues are associated to a reduction in total and direct (scope 1) emissions of non-financial companies. We find that, compared to conventional bond issuers with similar financial characteristics and environmental ratings, green issuers display a decrease in the carbon intensity of their assets after borrowing on the green segment. The decrease in emissions is more pronounced, significant and long-lasting when we exclude green bonds with refinancing purposes, which is consistent with an increase in the volume of climate friendly activities due to new projects. We also find a larger reduction in emissions in case of green bonds that have external review, as well as those issued after the Paris Agreement.

Keywords: climate change; green bonds; impact investing; corporate sustainability; environment (search for similar items in EconPapers)
JEL-codes: G12 Q50 Q51 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2020-09
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published by Publications Office of the European Union, 2020

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Journal Article: Green bonds as a tool against climate change? (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:jrs:wpaper:202010

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