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Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds
Malcolm Baker,Malcolm Baker,Daniel Bergstresser,George Serafeim,Jeffrey Wurgler,Jeffrey Wurgler +5 more
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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.read more
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Why Do Investors Hold Socially Responsible Mutual Funds
Arno Riedl,Paul Smeets +1 more
TL;DR: In this paper, the authors link administrative data to survey responses and behavior in incentivized experiments to understand why investors hold socially responsible mutual funds, and find that both social preferences and social signaling explain socially responsible investment (SRI) decisions.
Journal ArticleDOI
Understanding the role of green bonds in advancing sustainability
Aaron Maltais,Björn Nykvist +1 more
TL;DR: A few academic studies have been conducted on green bonds as mentioned in this paper, and these studies have focused on the use of green bonds in the area of sustainable finance, however, to date there have only been a few studies on the green bonds.
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Is there a green premium in the green bond market? Systematic literature review revealing premium determinants
TL;DR: In this article, the authors conducted a systematic literature review with the aim of establishing a consensus on the existence, or nonexistence, of a green premium in the green bond market and found that the green premium varies widely for the primary market; however, an average greenium of −1 to −9 basis points on the secondary market is observed.
Journal ArticleDOI
Green bonds as an instrument to finance low carbon transition
TL;DR: In this paper, the role of green bonds in the transition to low carbon economy is examined, based on the theoretical argument of intergenerational burden sharing and the practical need for large, long-term infrastructure investments.
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Journal ArticleDOI
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.
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The Wages of Social Responsibility
Meir Statman,Denys Glushkov +1 more
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.