Corporate Decision-Making in Sustainability Bonds: The Importance of Governance Quality

Riadh Ben Jelili (), Olivier Adoukonou (), Youssef Fahmi () and Jean-Laurent Viviani ()
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Riadh Ben Jelili: LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO EPE - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO EPE - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris], Brest IAE - Institut d'Administration des Entreprises (IAE) - Brest - UBO EPE - Université de Brest - Bretagne INP - Institut National Polytechnique de Bretagne
Olivier Adoukonou: UBS - Université de Bretagne Sud, LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO EPE - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO EPE - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris]
Youssef Fahmi: LEGO - Laboratoire d'Economie et de Gestion de l'Ouest - UBS - Université de Bretagne Sud - UBO EPE - Université de Brest - IMT - Institut Mines-Télécom [Paris] - IBSHS - Institut Brestois des Sciences de l'Homme et de la Société - UBO EPE - Université de Brest - UBL - Université Bretagne Loire - IMT Atlantique - IMT Atlantique - IMT - Institut Mines-Télécom [Paris]
Jean-Laurent Viviani: CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique

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Abstract: This study examines the factors influencing corporate decisions in sustainable bond issuance, focusing on Green Bonds (GB), Sustainability-Linked Bonds (SLB), Sustainability Bonds (SUB), and Social Bonds (SOB). Using a multivariate Probit model, the analysis identifies key determinants such as industry classification, governance transparency, financial constraints, and macroeconomic conditions. The findings reveal distinct issuance patterns, highlighting the impact of firm size, leverage, and greenwashing risks. Companies operating in weaker governance environments are more likely to issue GB, while liquidity-constrained firms prefer SLB due to their flexible structure. Concerns over the credibility of SLB, particularly regarding greenwashing, have become increasingly prominent. In contrast, GB issuance remains largely unaffected by greenwashing due to stricter regulatory oversight. The study underscores the need for stronger regulatory frameworks and enhanced third-party verification to improve the credibility of sustainability-linked financing. These insights contribute to the broader discourse on sustainable finance, offering valuable implications for policymakers, investors, and corporate decision-makers.

Date: 2025-06-05
New Economics Papers: this item is included in nep-inv
Note: View the original document on HAL open archive server: https://hal.science/hal-05737206v1
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Published in 24e Conférence Internationale de Gouvernance de l’Association Académique Internationale de Gouvernance, Association Académique Internationale de Gouvernance et UQAM, Jun 2025, Montréal, Canada

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