Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds

Malcolm P. Baker, Daniel Bergstresser, George Serafeim, Jeffrey Wurgler

2018 | Academic | Climate, Fixed Income, Sustainable Investing

We find that green municipal bonds are issued at a premium to otherwise similar ordinary bonds. We also confirm that green bonds, particularly small or essentially riskless ones, are more closely held than ordinary bonds. These pricing and ownership effects are strongest for bonds that are externally certified as green.