Corporate Green Bonds

Caroline Flammer

2020 | Academic | Fixed Income

I find that the stock market responds positively to the announcement of green bond issuance. The response is stronger for green bonds that are certified by independent third parties and first-time issuers. Moreover, I find that, following the issuance of green bonds, companies improve their environmental performance (i.e., higher environmental ratings and lower CO2 emissions) and experience an increase in ownership by long-term and green investors.