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Financial Performance of Government Bond Portfolios Based on Environmental, Social and Governance Criteria

Author

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  • Guillermo Badía

    (Faculty of Economics and Business, University of Zaragoza, 50005 Zaragoza, Spain)

  • Vicente Pina

    (Faculty of Economics and Business, University of Zaragoza, 50005 Zaragoza, Spain)

  • Lourdes Torres

    (Faculty of Economics and Business, University of Zaragoza, 50005 Zaragoza, Spain)

Abstract

We evaluated the financial performance of government bond portfolios formed according to socially responsible investment (SRI) criteria. We thus open a discussion on the financial performance of SRI for government bonds. Our sample includes 24 countries over the period of June 2006 to December 2017. Using various financial performance measures, the results suggest that high-rated government bonds, according to environmental, social, and governance (ESG) dimensions, outperform low-ranked bonds under any cut-off, although differences are not statistically significant. These findings suggest that ESG screenings can be used for government bonds without sacrificing financial performance.

Suggested Citation

  • Guillermo Badía & Vicente Pina & Lourdes Torres, 2019. "Financial Performance of Government Bond Portfolios Based on Environmental, Social and Governance Criteria," Sustainability, MDPI, vol. 11(9), pages 1-13, April.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:9:p:2514-:d:227224
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    Cited by:

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    2. Davide Lauria & W. Brent Lindquist & Stefan Mittnik & Svetlozar T. Rachev, 2022. "ESG-Valued Portfolio Optimization and Dynamic Asset Pricing," Papers 2206.02854, arXiv.org.
    3. Guillermo Badía & Fernando Gómez‐Bezares & Luis Ferruz, 2022. "Are investments in material corporate social responsibility issues a key driver of financial performance?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 3987-4011, September.
    4. Angel Huerga & Carlos Rodríguez-Monroy, 2019. "Mandatory Convertible Bonds and the Agency Problem," Sustainability, MDPI, vol. 11(15), pages 1-21, July.
    5. Hail Jung & Seyeong Song & Chang-Keun Song, 2021. "Carbon Emission Regulation, Green Boards, and Corporate Environmental Responsibility," Sustainability, MDPI, vol. 13(8), pages 1-12, April.
    6. Julian Amon & Margarethe Rammerstorfer & Karl Weinmayer, 2021. "Passive ESG Portfolio Management—The Benchmark Strategy for Socially Responsible Investors," Sustainability, MDPI, vol. 13(16), pages 1-21, August.
    7. Hambur Wang, 2024. "Can ESG Investment and the Implementation of the New Environmental Protection Law Enhance Public Subjective Well-being?," Papers 2411.06110, arXiv.org.
    8. Anamaria Dan & Adriana Tiron-Tudor, 2021. "The Determinants of Green Bond Issuance in the European Union," JRFM, MDPI, vol. 14(9), pages 1-15, September.
    9. Halit Gonenc & Bert Scholtens, 2019. "Responsibility and Performance Relationship in the Banking Industry," Sustainability, MDPI, vol. 11(12), pages 1-49, June.
    10. Irina-Eugenia Iamandi & Laura-Gabriela Constantin & Sebastian Madalin Munteanu & Bogdan Cernat-Gruici, 2019. "Mapping the ESG Behavior of European Companies. A Holistic Kohonen Approach," Sustainability, MDPI, vol. 11(12), pages 1-41, June.
    11. Iqbal Owadally & Jean-René Mwizere & Neema Kalidas & Kalyanie Murugesu & Muhammad Kashif, 2021. "Long-Term Sustainable Investment for Retirement," Sustainability, MDPI, vol. 13(9), pages 1-22, April.
    12. Muhtar Sapiri & Aditya Halim Perdana Kusuma Putra, 2023. "Causality of Bank Financial Performance, Green Bond, CSR, Green Financing Portfolio and CO2 Emissions in Transportation: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 511-522, November.

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