Sustainability bond, sustainability-linked bond, and firms' environmental performance

Takuto Shimauchi, Masaki Fukui, Daiki Yamamoto, Yuto Taura and Keigo Kameda

International Review of Financial Analysis, 2025, vol. 102, issue C

Abstract: The issuance of green bonds, which channel toward green projects, has surged in recent years. However, sustainability and sustainability-linked bonds, which have looser restrictions on the use of funds than green bonds, also allocate funds to support green initiatives. While research on these bonds is expanding, no study has examined whether the issuance of sustainability and sustainability-linked bonds leads to enhancements in environmental performance. To address this gap, our study investigates the relationship between the issuance of sustainability bonds and sustainability-linked bonds and corporate environmental performance using a difference-in-difference approach with an event study methodology. Our findings suggest that the issuance of sustainability and sustainability-linked bonds does not contribute to improving corporate environmental performance. Therefore, implementing strict regulations on the use of proceeds is crucial to ensure the effectiveness of these bonds.

Keywords: Sustainability bonds; Sustainability-linked bonds; Green bonds; Environmental performance; Difference-in-differences; Event study (search for similar items in EconPapers)
JEL-codes: G12 M14 Q56 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521925002145
Full text for ScienceDirect subscribers only

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:eee:finana:v:102:y:2025:i:c:s1057521925002145

DOI: 10.1016/j.irfa.2025.104127

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().