Green bonds: A legal and economic analysis

Sergio Gilotta

Chapter 10 in Research Handbook on Environmental, Social and Corporate Governance, 2024, pp 226-248 from Edward Elgar Publishing

Abstract: Green bonds are bonds issued to finance projects with a positive impact on the environment. This chapter focuses on green bonds issued by private, profit-oriented corporations. After a description of green bonds’ main features and an account of the main drivers behind the growth of the green bond market, the chapter discusses green bonds’ role in promoting corporate environmental sustainability. It highlights green bonds’ capacity to improve the credibility of firms’ environmental pledges, their role in enhancing firms’ environmental transparency and their ability to increase the number of green projects being financed. The chapter then investigates whether green bonds should be regulated. It discusses the major concerns that may support regulatory intervention, namely issuer opportunism and uncertainty regarding what can be considered a green project, showing that they do not provide any strong argument in favour of regulation. In light of this result, the chapter provides an account and an assessment of EU policymakers’ recent regulatory initiatives in the area.

Keywords: Economics and Finance; Environment; Law - Academic; Politics and Public Policy (search for similar items in EconPapers)
Date: 2024
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