The Price of Trust: Greenium and Greenwashing in Asia’s Green Bond Markets

Alexander Dryden and Enrico Pulieri

No 266, Working Papers from Department of Economics, SOAS University of London, UK

Abstract: This study investigates whether bond certification in Asian green bond markets leads to larger “greeniums†compared to traditional debt instruments. Utilizing a dataset of 2,753 green bonds issued between 2014 and 2024, we employ coarsened exact matching (CEM), ordinary least squares (OLS), and quantile treatment effects (QTE) regressions to analyze secondary market pricing. Our findings reveal that certified green bonds in Asia achieve a “greenium†of 12 basis points, with lower volatility levels when compared to traditional debt instruments. In contrast, self-labeled bonds face yield penalties, reflecting investor concerns about greenwashing and the credibility of their environmental claims. Our findings further suggest that Asian green bond markets require more market leadership from governments and public institutions to develop a more effective and trustworthy green bond market.

Keywords: Asia; Green Bonds; Greenswashing; Greenium; Climate Change (search for similar items in EconPapers)
JEL-codes: G12 G15 G18 M14 O53 Q56 (search for similar items in EconPapers)
Pages: 26
Date: 2025-02
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Persistent link: https://EconPapers.repec.org/RePEc:soa:wpaper:266

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