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Does financing strategy accelerate corporate energy transition? Evidence from green bonds

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  • Mohammed Benlemlih
  • Jamil Jaballah
  • Lamya Kermiche

Abstract

With energy transition becoming an urgent priority for companies worldwide, practitioners and policymakers are urging them to finance climate‐friendly projects. This paper investigates how the issuance of green bonds affects firms' carbon emissions and environmental performance. Our results show that green bond issuance significantly improves firms' overall environmental performance and their capacities to create new environmental technologies and processes. However, green bond issuance has a less clear effect on carbon emissions intensity and requires additional time (one or more years) before being able to improve the emissions intensity. Taken together, our study's findings clearly highlight the importance of green bonds in financing energy transition in the corporate sector and provide evidence to encourage policymakers to strengthen the legal framework relating to their issuance.

Suggested Citation

  • Mohammed Benlemlih & Jamil Jaballah & Lamya Kermiche, 2023. "Does financing strategy accelerate corporate energy transition? Evidence from green bonds," Business Strategy and the Environment, Wiley Blackwell, vol. 32(1), pages 878-889, January.
    • Handle: RePEc:bla:bstrat:v:32:y:2023:i:1:p:878-889
    DOI: 10.1002/bse.3180
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    2. Wang, Yaxian & Wang, Xiaoyu & Baležentis, Tomas & Chi, Yuanying & Streimikiene, Dalia, 2025. "Disentangling the effects of green finance in reducing CO2 emission from energy systems: Evidence from a novel factor decomposition mechanism," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1721-1738.
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    4. Shimauchi, Takuto & Fukui, Masaki & Yamamoto, Daiki & Taura, Yuto & Kameda, Keigo, 2025. "Sustainability bond, sustainability-linked bond, and firms' environmental performance," International Review of Financial Analysis, Elsevier, vol. 102(C).
    5. Lee, Chien-Chiang & Xuan, Chengnan & Wang, Fuhao & Wang, Keying, 2024. "Path analysis of green finance on energy transition under climate change," Energy Economics, Elsevier, vol. 139(C).
    6. Mustafa Tevfik Kartal & Ugur Korkut Pata & Andrew Adewale Alola, 2025. "Impact of green bonds on CO2 emissions and disaggregated level renewable electricity in China and the United States of America," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-17, December.
    7. Feng, Yanchao & Zhang, Juan & Geng, Yong & Jin, Shurui & Zhu, Ziyi & Liang, Zhou, 2023. "Explaining and modeling the reduction effect of low-carbon energy transition on energy intensity: Empirical evidence from global data," Energy, Elsevier, vol. 281(C).
    8. Li, Chengming & Guo, Guanyu & Gu, Huangying & Dong, Xiaoqi, 2025. "How green bonds exert a demonstration effect on firms within the same region," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 117-136.
    9. Wang, Yajun & Yuan, Zheng & Luo, Hanyu & Zeng, Hui & Huang, Junbing & Li, Yulin, 2024. "Promoting low-carbon energy transition through green finance: New evidence from a demand-supply perspective," Energy Policy, Elsevier, vol. 195(C).
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    16. Magdalena Zioło & Iwona Bąk & Anna Spoz, 2025. "The Nexus Between Green Bonds, Green Credits, and the Energy Transition Toward Renewable Energy Sources: State of the Art," Energies, MDPI, vol. 18(16), pages 1-21, August.

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