Green bonds as a tool against climate change?
JRC Working Papers in Economics and Finance , 2020/10
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 (‘additionality’). 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.
FATICA Serena;
PANZICA Roberto;
2020-09-24
Publications Office of the European Union
JRC121894
978-92-76-22105-0 (online),
2467-2203 (online),
OP KJ-AE-20-013-EN-N (online),
https://publications.jrc.ec.europa.eu/repository/handle/JRC121894,
10.2760/24092 (online),
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