Explaining green bond issuance using survey evidence: beyond the greenium

Sangiorgi, I. ORCID: https://orcid.org/0000-0002-8344-9983 and Schopohl, L. ORCID: https://orcid.org/0000-0002-2150-3593 (2023) Explaining green bond issuance using survey evidence: beyond the greenium. The British Accounting Review, 55 (1). 101071. ISSN 0890-8389 doi: 10.1016/j.bar.2021.101071

Abstract/Summary

The paper examines the drivers and challenges of issuing green bonds from the perspective of green bond issuers. Using survey evidence of global issuers representing 29% of total green bond issuances, the research shows that reputational benefits, the market signalling power of green bonds and a desire to curb climate change are the main motives for green bond issuance. In contrast, insufficient market evolvement, and a lack of awareness and suitable green projects represent the biggest barriers for entry to the green bond market. Most respondents consider green bond issuance costs to be higher than those of comparable plain vanilla bonds, but acceptable due to the benefits they derive from green bond issuances. Among these benefits, respondents report higher levels of demand for green bonds, higher levels of investor engagement, diversification of their investor base and a strengthened internal commitment to sustainability. Issuers’ experiences vary regarding the pricing of green bonds – with 48% of respondents stating that their green bond funding costs are the same as for their plain vanilla bonds and 42% reporting lower green bond funding costs. Most issuers favour a standardisation of the definition of ‘green’ for determining which projects can be funded via green bonds.

Item Type	Article
URI	https://reading-clone.eprints-hosting.org/id/eprint/102056
Identification Number/DOI	10.1016/j.bar.2021.101071
Refereed	Yes
Divisions	Henley Business School > Finance and Accounting
Uncontrolled Keywords	Green bonds; Greenium; Bond Issuance; Survey; Climate finance
Publisher	Elsevier
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