Green Bonds: Effectiveness and Implications for Public Policy

Caroline Flammer

Environmental and Energy Policy and the Economy, 2020, vol. 1, issue 1, 95 - 128

Abstract: This paper studies green bonds, a relatively new instrument in sustainable finance. I first describe the market for green bonds and characterize the “green bond boom” witnessed in recent years. Second, using firm-level data on green bonds issued by public companies, I examine companies’ financial and environmental performance following the issuance of green bonds. I find that the stock market responds positively to the announcement of green bond issues. Moreover, I document a significant increase in environmental performance, suggesting that green bonds are effective in improving companies’ environmental footprint. These findings are only significant for green bonds that are certified by independent third parties, suggesting that certification is an important governance mechanism in the green bond market. I conclude by discussing potential implications for public policy.

Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (62)

Downloads: (external link)
http://dx.doi.org/10.1086/706794 (application/pdf)
http://dx.doi.org/10.1086/706794 (text/html)
Access to the online full text or PDF requires a subscription.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucp:epolec:doi:10.1086/706794

Access Statistics for this article

More articles in Environmental and Energy Policy and the Economy from University of Chicago Press
Bibliographic data for series maintained by Journals Division ().