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Does green bond issuance have an impact on climate risk concerns?

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  • Wang, Chih-Wei
  • Wu, Yu-Ching
  • Hsieh, Hsin-Yi
  • Huang, Po-Hsiang
  • Lin, Meng-Chieh

Abstract

This paper examines the effect of green bond issuance on firms' climate risk concerns from 2011 to 2020. First, we propose four ratios of climate risk concerns, which are transition risks, acute physical risks, chronic physical risks, and climate-related opportunities by using text mining techniques. Second, we find that the climate risk concerns increase for most firms after the issuance of green bonds. Finally, to eliminate the endogeneity, we adopt propensity score matching (PSM) and difference-in-difference (DID) analysis to indicate that after the issuance of green bonds, firms pay more attention to climate risks. Our results provide insights and implications for policy makers and regulators.

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  • Wang, Chih-Wei & Wu, Yu-Ching & Hsieh, Hsin-Yi & Huang, Po-Hsiang & Lin, Meng-Chieh, 2022. "Does green bond issuance have an impact on climate risk concerns?," Energy Economics, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:eneeco:v:111:y:2022:i:c:s0140988322002328
    DOI: 10.1016/j.eneco.2022.106066
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    Cited by:

    1. Ghafoor, Abdul & Šeho, Mirzet & Sifat, Imtiaz, 2023. "Co-opted board and firm climate change risk," Finance Research Letters, Elsevier, vol. 52(C).
    2. Lee, Chien-Chiang & Wang, Chih-Wei & Thinh, Bui Tien, 2023. "Green development, climate risks, and cash flow: International evidence," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    3. Ren, Xiaohang & Li, Jingyao & He, Feng & Lucey, Brian, 2023. "Impact of climate policy uncertainty on traditional energy and green markets: Evidence from time-varying granger tests," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    4. Chishti, Muhammad Zubair & Sinha, Avik & Zaman, Umer & Shahzad, Umer, 2023. "Exploring the dynamic connectedness among energy transition and its drivers: Understanding the moderating role of global geopolitical risk," Energy Economics, Elsevier, vol. 119(C).
    5. Wang, Kai-Hua & Wen, Cui-Ping & Liu, Hong-Wen & Liu, Lu, 2023. "Promotion or hindrance? Exploring the bidirectional causality between geopolitical risk and green bonds from an energy perspective," Resources Policy, Elsevier, vol. 85(PB).
    6. Li, Yanxi & Yu, Conghui & Shi, Jinyan & Liu, Yuanyuan, 2023. "How does green bond issuance affect total factor productivity? Evidence from Chinese listed enterprises," Energy Economics, Elsevier, vol. 123(C).
    7. Dai, Zhifeng & Zhang, Xiaotong, 2023. "Climate policy uncertainty and risks taken by the bank: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 87(C).

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    More about this item

    Keywords

    Transition risks; Acute physical risks; Chronic physical risks; Climate-related opportunities; Green bond issuance;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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