Do investors benefit from investing in stocks of green bond issuers?

Guillermo Badía, Maria Céu Cortez and Florinda Silva

Economics Letters, 2024, vol. 242, issue C

Abstract: We investigate the environmental and financial performance of portfolios comprising stocks from worldwide green bond issuers compared to matched non-green but otherwise similar portfolios. Portfolios formed by stocks of green bond issuing companies show superior environmental performance, notably reflected in reduced CO2 emissions over the medium to long term. Furthermore, these portfolios exhibit financial performance, as measured by the five-factor model of Fama and French (2015), at least comparable to their non-green counterparts, even outperforming them over a 12-month investment horizon. Overall, investing in stocks of green bond issuers seemingly offers competitive risk-adjusted returns.

Keywords: Green finance; Green bonds; Green stock portfolios; Portfolio performance (search for similar items in EconPapers)
JEL-codes: G11 Q5 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:242:y:2024:i:c:s0165176524003434

DOI: 10.1016/j.econlet.2024.111859

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