An Exploratory Study of the Association Between Green Bond Features and ESG Performance

Jinhui Wu, Wullianallur Raghupathi () and Viju Raghupathi
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Jinhui Wu: Gabelli School of Business, Fordham University, New York, NY 10458, USA
Wullianallur Raghupathi: Gabelli School of Business, Fordham University, New York, NY 10458, USA
Viju Raghupathi: Koppelman School of Business, Brooklyn College of the City University of New York, Brooklyn, NY 10017, USA

Sustainability, 2025, vol. 17, issue 5, 1-25

Abstract: As investors increasingly incorporate non-financial performance metrics into investment decisions, CSR has become valuable due to its implications for voluntary disclosures and third-party ratings. Building on this premise, our study examines how green-bond issuance signals environmental commitment and is associated with ESG performance and valuation. While other studies examine this association, we go a step further and identify the green-bond features which are associated with ESG ratings. Using the Bloomberg database, we downloaded corporate green-bond data for 2550 green bonds. We use signaling theory as the foundation of the study. We deploy regression to test the relationships. Our findings show that green-bond features are associated with enhanced environmental and ESG disclosure scores but not with reductions in CO 2 emissions relative to sales. The findings show weak associations of ESG with green-bond features. Taken together, the results contradict ‘greenwashing’ claims. However, the findings confirm that companies effectively signal environmental commitment through green-bond issuance. These insights enhance the understanding of green bonds’ nature and dimensions while providing meaningful implications for corporate policy.

Keywords: ESG; green bond; CO 2 emission; CSR; disclosure score; greenwashing (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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