Summary of Arttu’s Master’s thesis: “GREENWASHING CORPORATE GREEN BONDS: Evidence from European and North American markets”.
Summary of Arttu’s Master’s thesis: “GREENWASHING CORPORATE GREEN BONDS: Evidence from European and North American markets”.
Motivation: Green financing is something that interests me, and together with my advisor, we tried to find a new, interesting angle into the topic. As the amount of issued green bonds is constantly increasing, it provided an interesting opportunity to examine green bonds’ role for firms’ green transition, and whether issued green bonds signal companies greater environmental commitment.
My thesis in short: In my thesis, I study underlying issuance motivations and environmental impact of corporate green bonds. More specifically, I’ll quantitatively analyse:
- whether recent environmental controversies increase likelihood of green bond issuance within next couple years.
- whether issued corporate green bond is expected to lead issuing firm to outperform peers on different environmental performance metrics.
- whether firms that have issued green bonds have statistically higher expectations of reporting on new environmental investment initiatives compared to their peers.
In addition, I also had a more detailed look e.g., into green bonds’ “use of proceeds” characteristic/feature and green bond issuance’s impact on corporate governance.
To sum up, the idea of the thesis is to quantitatively investigate whether corporate green bonds are signaling issuer’s greater commitment on environment, and whether issued corporate green bonds are expected to cause a significant and positive impact on issuer’s environmental performance compared to peers.
Conclusion: In short, my research highlights the need to increase the transparency of green financing and to define unambiguous criteria for this, so we can ensure that funding is targeted at environmentally positive projects and avoid greenwashing. I do argue that corporate green bonds have great potential on enabling green transition, but there is still work to do, e.g. on environmental data, metrics, monitoring, etc., so that we can fully ensure that desired environmental impact of these products is achieved.