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Green bonds - financial innovation for sustainability financing: The case of the Polish green bonds market and their development barriers

Author

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  • Sobik Bartosz

    (SGH Warsaw School of Economics, al. Niepodległości 162, 02-554 Warsaw, Poland)

Abstract

The struggle against climate change and the increasing implementation of sustainability and environmental, social and governance (ESG) standards have contributed to the dynamic development of green finance. Green bonds have become one of the key tools of green finance. The aim of this paper is to provide a comprehensive study related to the development and barriers of the green bonds market in Poland. A literature review, comparative analysis, and financial data were used in this research. The publication uses data from the Climate Bonds Initiative and includes global data on the development of the green bond market. The research was also enhanced by data from the Polish Ministry of Finance. Green bonds are an increasingly popular financing tool for renewable energy, zero-emission transport, or green buildings. The biggest advantages of green bonds are compliance with ESG standards, hedging of climate risk, and reputational benefits. Disadvantages include significant transaction costs, lack of uniform standardisation, or the risk of greenwashing – particularly when issuing sustainability-linked bonds. The development of green bonds in Poland faces barriers related to the lack of green projects. The development of municipal green bonds in Poland is clearly hampered by high transaction costs and the lack of clear economic benefits for issuers. Green bonds are not an instrument to finance all environmental investments, hence their implementation is limited; however, they are playing an increasingly important role in the transition towards sustainability.

Suggested Citation

  • Sobik Bartosz, 2023. "Green bonds - financial innovation for sustainability financing: The case of the Polish green bonds market and their development barriers," Central European Economic Journal, Sciendo, vol. 10(57), pages 287-303, January.
    • Handle: RePEc:vrs:ceuecj:v:10:y:2023:i:57:p:287-303:n:5
    DOI: 10.2478/ceej-2023-0017
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    References listed on IDEAS

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    1. Aaron Maltais & Björn Nykvist, 2021. "Understanding the role of green bonds in advancing sustainability," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 11(3), pages 233-252, July.
    2. Raffaele Della Croce & Christopher Kaminker & Fiona Stewart, 2011. "The Role of Pension Funds in Financing Green Growth Initiatives," OECD Working Papers on Finance, Insurance and Private Pensions 10, OECD Publishing.
    3. Anna Laskowska, 2019. "Zielone obligacje skarbowe jako sposob finansowania zadan publicznych [Sovereign green bonds as a way of financing the public tasks]," Catallaxy, Institute of Economic Research, vol. 4(2), pages 103-111, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    green bonds; green finance; sustainability; ESG; climate finance; O13; Q40; Q56;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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