Green versus Conventional Corporate Debt:From Issuances to Emissions

Juan Cortina (), Claudio Raddatz, Sergio Schmukler and Tomas Williams
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Juan Cortina: World Bank

No 193, Mo.Fi.R. Working Papers from Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences

Abstract: This paper investigates how firms use green versus conventional debt and the associated firm- and aggregate-level environmental consequences. Employing a dataset of 127,711 global bond and syndicated loan issuances by non-financial firms across 85 countries during 2012-23, the paper documents a sharp rise in green debt issuances relative to conventional issuances since 2018. This increase is particularly pronounced among large firms with high carbon dioxide emissions. Local projections difference-in-differences estimates show that, compared to conventional debt, green bond and loan issuances are systematically followed by sustained reductions in carbon intensity (emissions over income) of up to 50 percent. These reductions correspond to as much as 15 percent of global annual emissions. Green bonds contribute to reducing emissions by providing financing to large, high-emitting firms, whose improvements in carbon intensity have significant aggregate consequences. Syndicated loans do so by channeling a larger volume of financing to a wider set of firms.

Keywords: carbon emissions; corporate bonds; firm growth; green debt; green transition; sustainability; syndicated loans (search for similar items in EconPapers)
JEL-codes: F33 G00 G01 G15 G21 G23 G31 (search for similar items in EconPapers)
Pages: 62
Date: 2025-10
New Economics Papers: this item is included in nep-ene and nep-env
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http://docs.dises.univpm.it/web/quaderni/pdfmofir/Mofir193.pdf First version, 2025 (application/pdf)

Related works:
Working Paper: Green versus Conventional Corporate Debt: From Issuances to Emissions (2025)
Working Paper: Green versus Conventional Corporate Debt: From Issuances to Emissions (2025)
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