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Financial Analysis of Green Bond Issuance Potential of Banks in Bulgaria in the Context of Sustainable Development

Author

Listed:
  • Ventsislav Vechev
  • Diana Papradanova

Abstract

The objective of this study is to analyse the financial statements of banks operating in Bulgaria to assess their readiness to issue green bonds as a means of attracting financial resources and the various possibilities for subsequent investment of these resources to mitigate climate change and protect the environment. The research was conducted using the tools of statistical analysis and mathematical optimisation models. The findings revealed that the issuance of green bonds is a viable and pragmatic option for accumulating financial resources for both direct and indirect investments in climate change mitigation with moderate risk exposure and optimal expected return. The issuance of green bonds is a novelty for banks in the Republic of Bulgaria. Using economic analysis methods combined with established mathematical models, a comprehensive assessment was made of the readiness of banks to use green bonds as another tool for accumulating financial resources that can be transformed into investments aimed at improving the climate.

Suggested Citation

  • Ventsislav Vechev & Diana Papradanova, 2026. "Financial Analysis of Green Bond Issuance Potential of Banks in Bulgaria in the Context of Sustainable Development," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 135-151.
    • Handle: RePEc:bas:econst:y:2026:i:1:p:135-151
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    File URL: http://archive.econ-studies.iki.bas.bg/2026/2026_01/2026_01_08.pdf
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    References listed on IDEAS

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    1. Fatica, Serena & Panzica, Roberto & Rancan, Michela, 2021. "The pricing of green bonds: Are financial institutions special?," Journal of Financial Stability, Elsevier, vol. 54(C).
    2. Francesco Gangi & Antonio Meles & Eugenio D'Angelo & Lucia Michela Daniele, 2019. "Sustainable development and corporate governance in the financial system: Are environmentally friendly banks less risky?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 26(3), pages 529-547, May.
    3. David Gilchrist & Jing Yu & Rui Zhong, 2021. "The Limits of Green Finance: A Survey of Literature in the Context of Green Bonds and Green Loans," Sustainability, MDPI, vol. 13(2), pages 1-12, January.
    4. Leonardo Gambacorta & Salvatore Polizzi & Alessio Reghezza & Enzo Scannella, 2026. "Do Banks Practice What They Preach? Brown Lending and Environmental Disclosure in the Euro Area," Journal of Financial Services Research, Springer;Western Finance Association, vol. 69(1), pages 135-179, April.
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    1. Gamze Gocmen Yagcilar & Zuhal Arslan & Mehmet Levent Erdas, 2026. "Do Green Investments, Bank Loans, Savings and Capital Formation Support Sustainable Development in the United States?," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 6, pages 88-106.

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    More about this item

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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