Green bonds as an innovative sovereign financial instrument

Abstract

Motivation: There is a growing awareness of the impact that climate change is having on the world economy and the standards of living. Green bonds (GBs) are relatively new and innovative instruments on the financial market where the capitals are also invested in projects that generate environmental or climate benefits. The newness of this financial instrument could be the main reason behind the scarcity of scientific publications on green bonds; thus, it remains an undeveloped research area. One of the problems is also classifying securities as GBs. Therefore, it is exceedingly important to distinguish labelled green bonds and unlabelled climate-aligned bonds. Aim: In the article, the authors will present the evolution of the green bonds market and attempt to assess the observed and potential effects of green bonds' issuances, taking into account governments issues. Results: Green bonds are the next stage of market growth. In the article, the authors will present the benefits of green bonds and the positive impact that their issuance has on the issuer and on investors' image as socially responsible entities. Therefore, strong investor demand can lead to oversubscription. Thus, green bonds could be one of the eas-

The Development of Green Bond in Developing Countries: Insights from Southeast Asia Market Participants

“…These views reinforced the findings from Nguyen et al ( 2020 ), who suggest that expectations of stakeholders as well as corporate reputation can be improved through sustainability efforts such as CSR practices, sustainability disclosure, and GB issuance. These findings are also consistent with research conducted by Wiśniewski and Zieliński ( 2019 ), who suggest that the fundamental benefit of GB issuance came from the increase in corporate reputation for issuers, and suggest that GB will become the business norm that is able to drive the sustainability intention into the development agenda. Finally, our research results also support the findings of Pham and Huynh ( 2020 ), by indicating that, similar to conventional bonds, GB can also deliver sufficient financial benefits to support sustainability actions and climate change mitigation caused by business operations (Piñeiro-Chousa et al 2021 ), which is considered as a main advantage of GB issuance.…”

“…In a business, GBs are asset-linked and backed by the institution’s financial position, thus GB also carries credit ratings as do other conventional bonds. Although the positive implications of GB to the environment, society, and the economics have been reported by scholars (for example, see Yamahaki et al 2020 and Zhang 2020 ), the GB still only accounts for about 3% of all of the bond markets (Climate Bonds Initiative 2019 ), and this rate is even lower in some Asian developing countries (Wiśniewski and Zieliński 2019 ). The findings for the sustainability, climate mitigation projects, and environmentally friendly investments such as GB have increased since ​investors have recognized the threats and uncertainties caused by the climate change to the long-term economic development as well as human society (Reboredo and Ugolini 2020 ).…”

A Cognizance of Green Bond Features Preferential to Renewable Energy Project Financing in Ghana

“…Oversubscription of issuances globally Talbot (2017), EY (2018), Deschryver and De Mariz (2020), Breen and Campbell (2016). Wiśniewski and Zieliński (2019), and Wang (2017) 4…”

The Determinants of Green Bond Issuance in the European Union

“…We identified a large topic about the main benefits of issuing green bonds. The advantages highlighted can be summarized as follows: (1) insurance against environmental risks; (2) a strong reputation and social trust; (3) lower cost of debt, pricing advantage; (4) diversification and a large investor base; (5) strong oversubscription; (6) pro-active messages to stakeholders; and (7) strengthened reputation (Bachelet et al 2019;Gilchrist et al 2021;CBI 2016;Wiśniewski and Zieliński 2019).…”