Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249361 
Year of Publication: 
2020
Series/Report no.: 
JRC Working Papers in Economics and Finance No. 2020/10
Publisher: 
Publications Office of the European Union, Luxembourg
Abstract: 
While green bonds are becoming increasingly popular in the corporate finance practice, little is known about their implications and effectiveness in terms of issuers' environmental engagement. Using matched bond-issuer data, we test whether green bond issues are associated to a reduction in total and direct (scope 1) emissions of non-financial companies. We find that, compared to conventional bond issuers with similar financial characteristics and environmental ratings, green issuers display a decrease in the carbon intensity of their assets after borrowing on the green segment. The decrease in emissions is more pronounced, significant and long-lasting when we exclude green bonds with refinancing purposes, which is consistent with an increase in the volume of climate friendly activities due to new projects. We also find a larger reduction in emissions in case of green bonds that have external review, as well as those issued after the Paris Agreement.
Subjects: 
climate change
green bonds
impact investing
corporate sustainability
environment
JEL: 
G12
Q50
Q51
Persistent Identifier of the first edition: 
ISBN: 
978-92-76-22105-0
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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