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

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TLDR
In this article, the authors study green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes, and find that green municipal bonds are issued at a premium to otherwise similar ordinary bonds.
Abstract
We study green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes. After an overview of the U.S. corporate and municipal green bonds markets, we study pricing and ownership patterns using a simple framework that incorporates assets with nonpecuniary utility. As predicted, 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.

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The impact of green bonds on corporate environmental and financial performance

Kim Ee Yeow, +1 more
- 11 May 2021 - 
TL;DR: In this article, the authors explore green bonds' impact on issuers' corporate environmental and financial performance and show that green bonds are effective in improving environmental performance, but only when they are certified by third parties.
Journal ArticleDOI

Interdependence between Green Financial Instruments and Major Conventional Assets: A Wavelet-Based Network Analysis

TL;DR: In this article, the authors examined the interdependence between green financial instruments represented by green bonds and green stocks, and a set of major conventional assets, such as Treasury, investment-grade and high-yield corporate bonds, general stocks, crude oil, and gold.
Journal ArticleDOI

Applying Responsible Ownership to Advance SDGs and the ESG Framework, Resulting in the Issuance of Green Bonds

TL;DR: In this article, an ownership strategy is proposed as a governance mechanism for collective action and responsible ownership in order to implement the United Nations Sustainable Development Goals and an environmental, social, and governance (ESG) framework.
Journal ArticleDOI

Green bonds of supranational financial institutions: On the road to sustainable development

TL;DR: In this article , the authors identify the features of green bond issues and implemented green projects by the World Bank (the WB) and the European Bank for Reconstruction and Development (the EBRD).
Journal ArticleDOI

Green Premium in the Primary and Secondary U.S. Municipal Bond Markets

TL;DR: In this paper, the authors performed yield curve analysis on a selection of green-labeled US municipal bonds that were issued at the same time as conventional US muni bonds by the same issuers.
References
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Socially responsible investments: Institutional aspects, performance, and investor behavior

TL;DR: In this paper, the authors provide a critical review of the literature on socially responsible investments (SRI) and conclude that existing studies hint but do not unequivocally demonstrate that SRI investors are willing to accept suboptimal financial performance to pursue social or ethical objectives.
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The Effect of Green Investment on Corporate Behavior

TL;DR: In this paper, the authors explore the effect of exclusionary ethical investing on corporate behavior in a risk-averse, equilibrium setting and show that it leads to polluting firms being held by fewer investors since green investors eschew polluting stocks.
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The effect of pro-environmental preferences on bond prices: Evidence from green bonds

TL;DR: In this paper, the authors used green bonds as an instrument to identify the effect of non-pecuniary motives, specifically pro-environmental preferences, on bond market prices.
Journal ArticleDOI

The Wages of Social Responsibility

TL;DR: This article analyzed returns during 1992-2007 of stocks rated on social responsibility by KLD and found that this tilt gave socially responsible investors a return advantage relative to conventional investors, but the return advantage of tilts toward stocks of companies with high social responsibility scores is largely offset by the return disadvantage that comes from the exclusion of stocks of'shunned' companies.
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Disagreement, Tastes, and Asset Prices

TL;DR: The authors provide a simple framework for studying how disagreement and tastes for assets as consumption goods can affect asset prices, and propose a model to estimate the probability distributions of future payoffs on assets.
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What are the relavent between green bond markets ownership structureand small and micro businesses?

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