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How Green are Green Debt Issuers?

Author

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  • Jochen M. Schmittmann
  • Han Teng Chua

Abstract

Green debt markets are rapidly growing while product design and standards are evolving. Many policymakers and investors view green debt as an important component in the policy mix to achieve the transition to a low carbon economy and ensure the pricing of climate risks. Our analysis contributes to the nascent literature on the environmental impact of green debt by documenting the CO2 emission intensity of corporate green debt issuers. We find lower emission intensities for green bond issuers relative to other firms, but no difference for green loan and sustainability-linked loan borrowers. Green bond, green loan, and sustainability-linked loan borrowers lower their emission intensity over time at a faster rate than other firms.

Suggested Citation

  • Jochen M. Schmittmann & Han Teng Chua, 2021. "How Green are Green Debt Issuers?," IMF Working Papers 2021/194, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2021/194
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    Cited by:

    1. Alix Auzepy & Christina E. Bannier & Fabio Martin, 2023. "Are sustainability‐linked loans designed to effectively incentivize corporate sustainability? A framework for review," Financial Management, Financial Management Association International, vol. 52(4), pages 643-675, December.
    2. Fender, Ingo & McMorrow, Mike & Zulaica, Omar, 2022. "Sustainable management of central banks’ foreign exchange (FX) reserves," LSE Research Online Documents on Economics 115540, London School of Economics and Political Science, LSE Library.

    More about this item

    Keywords

    debt issuer; bond issuer; loan borrower; debt data; emission intensity; Climate finance; Greenhouse gas emissions; Climate change; Bonds; Global;
    All these keywords.

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