Resumo

The financial system will be crucial to support and accelerate the needed investments to foster sustainable development. Among the financial instruments available to fill this gap, there are the so-called green bonds. The first green bond appeared in 2007 with the issuance of a so-called “climate awareness bond” worth US$ 1 billion, from the European Investment Bank (EIB). Green bonds possess the same standard financial characteristics of any other regular bond – a face value, yield, maturity date, and issuer, but they differ from regular bonds as they are labeled as “green” by the issuer.

Being aware of the investments needs and the challenge to raise funds for transitioning to a resilient and sustainable economy, the objective of this work is to analyze corporate green bonds as a financial tool that can collaborate in funding sustainable development activities and green projects. A secondary objective is to identify and explore some particularities about the issues that make up the corporate green bonds market. A value creation analysis is performed by both associating the issuances to the support of the SDG and investigating the business case for the initiatives.

Significant amount of research has been carried out to better understand the economic effects of integrating ESG issues into corporate financial decision-making, from both a company and an investor perspective. At least for some kinds of companies in some industries, such stakeholder investment can prove to be a source of competitive advantage and value that is increasingly being recognized by investors (Kotsantonis et al., 2016).

The green bond dataset has been built in the first half of 2019, adding Bloomberg database with both the Climate Bond Initiative (CBI) and the International Capital Market Associations (ICMA) labeled green bonds data. An advantage of using the Bloomberg database as an initial source to compile the green bonds dataset is that, for each issue, it uses it Bloomberg Industry Classification System (BICS) to classify the issuer’s sector. BICS for fixed-income security issuers contains 11 macro sectors, which represent the broadest classification of general business activities.

Green bonds shows evidence of being an efficient financial tool for raising funds for green projects and activities that promote sustainable development. However, the corporate green bond market still lacks on best practices and commitment from the business community, investors, financial institutions, and government entities in respect to demanding and providing transparency with the use and management of proceeds. Thus, our findings suggest that the corporate green bond market is not yet mature enough and well disseminated among the agents with relevant participation in the segment

The key message is that there is a road ahead to reach a reasonable level of connection between socio-environmental performance and financial performance in the green bonds reports, so the business case for sustainability remains a challenge for the coming years.

Banga, J. (2019). The green bond market: a potential source of climate finance for developing countries. Journal of Sustainable Finance & Investment, 9(1), 17-32. doi:10.1080/20430795.2018.1498617 CBI. (2015). Scaling Up Green Bond Markets for Sustainable Development. Retrieved from https://www.climatebonds.net/resources/reports/scaling-green-bond-markets-sustainable-development CBI. (2018a). Bonds and Climate Change: The State of the Market 2018. Retrieved from https://www.climatebonds.net/resources/reports