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Climate concerns, salient events, and green preferences

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  • Merli, Maxime
  • Petey, Joël
  • Roger, Tristan

Abstract

This paper examines how climate concerns and climate-related events influence investor preferences for sustainable assets by analyzing the dynamics of greenium, defined as the yield discount on labeled green bonds under strict matching conditions. Using daily data from 2017 to 2023 for USD and Euro denominated bonds, and controlling for liquidity, yield curve slope, and volatility, we find that the greenium is modest on average. However, it responds significantly to shifts in climate-related attention and climate events. The latter effect is found only in European markets. Decomposing climate concerns variations into positive and negative components reveals a reversible response, raising concerns about the stability of green preferences as a long-term funding channel.

Suggested Citation

  • Merli, Maxime & Petey, Joël & Roger, Tristan, 2025. "Climate concerns, salient events, and green preferences," Economics Letters, Elsevier, vol. 255(C).
    • Handle: RePEc:eee:ecolet:v:255:y:2025:i:c:s0165176525003714
    DOI: 10.1016/j.econlet.2025.112534
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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • 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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