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Cross-region analysis of the environmental performance of green bond issuers

Author

Listed:
  • Joel, Tchuiendem Nelly
  • Zheng, Haitao
  • Liu, Bing-Yue

Abstract

The green bond market is gaining prominence over time, particularly in sectors in which the environment significantly affects the financial aspects of business activities. The study examines whether green bonds are associated with improved environmental performance based on a longitudinal panel data covering over 35 countries from 2011 to 2022. Using matched bond issuer information and a difference-in-difference (DID) regression, the study finds that green bond issuers compared to non-green bonds issuers with identical financial characteristics and ESG ratings, record better environmental score and fewer carbon intensity post issuance. The findings remain significant for corporate firms and those domiciled in North America and Europe and insignificant for financial firms and those based in Asia. Overall, the results align with signalling theory, suggesting that firms signal their dedication to the environment when they issue green bonds.

Suggested Citation

  • Joel, Tchuiendem Nelly & Zheng, Haitao & Liu, Bing-Yue, 2025. "Cross-region analysis of the environmental performance of green bond issuers," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325001904
    DOI: 10.1016/j.frl.2025.106926
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    References listed on IDEAS

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    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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