Go green or stay black: Bond market dynamics in Asia

Green Bond as an Innovative Financial Instrument in the Indian Financial Market: Insights From Systematic Literature Review Approach

“…At the issuer level, the lack of issuers’ creditworthiness, the problem of greenwashing (where the companies are pretending to be eco-friendly by disseminating unrealistic information toward ESG disclosure), and non-compliance with third-party verification limited the market development. Also, at the country level, lack of awareness, the lower sovereign rate, and the unavailability of financial benefits such as tax incentives have lessened the development (Prajapati et al, 2021; Uddin et al, 2022; A. Verma & Agarwal, 2020; R.…”

“…Thus, GB is demonstrated as a better financing mechanism to meet the SDG targets in the country. Though there is great potential for the development of the country’s GB market with a stronger willingness of foreign capital to invest in Indian GB (Uddin et al, 2022) only a limited number of issuers issued the GB in a country.…”

“…The third and last research question as a remedy for future development provides several steps as a way forward. There is huge potential for the greater development of the Indian GB market due to domestic investors’ interest in sustainable stocks (Gupta & Jham, n.d.) and also, due to the stronger willingness of foreign capital investments in GB (Uddin et al, 2022). The practice of greenwashing as a severe threat to this market, proper dissemination of information, particularly about issuers’ sustainable initiatives to all stakeholders should be provided to rule out this from the market.…”

“…Pham (2016) conducted the first empirical study on GB volatility and showed higher volatility in the “label GB markets” than in non-label GB. Since then, many studies investigated this segment and exerted the GB as “a risk-alleviating tool” for investors (Gatti & Florio, 2018; Jin et al, 2020; Mensi et al, 2022; Ortolano & Nissi, 2022; Uddin et al, 2022). Other strands of the literature demonstrated the portfolio diversification benefits for various investors (Gianfrate & Peri, 2019; Huynh et al, 2020; Karim & Naeem, 2022; Sohag et al, 2022; Tsagkanos et al, 2022).…”

“…These findings highlight that the other forms of green projects need to be financed by GB. Interestingly, the recent GB issuance in India shows a declining trend from USD 916 million to 3.2 billion (Uddin et al, 2022; Table 3).…”