Understanding the role of green bonds in advancing sustainability

Green bonds are one of the most prominent innovations in the area of sustainable finance over the past decade. However, to date there have only been a few academic studies on green bonds, and these have tended to focus on what impact green labels have on bond yields. Our analysis is one of the first empirical studies designed to address the broader questions of what attracts investors and issuers to the green bond market, the role of green bonds in shifting capital to more sustainable economic activity, and how green bonds impact the way organisations work with sustainability. Using Sweden as a case study, this paper provides insights into the rapid growth of the green bond market and how green bonds affect market participants' engagement with sustainability that are easily missed if one focuses only on how green bonds are marketed.

Automated summary

Green bonds are considered one of the most significant innovations in sustainable finance in the past decade. However, academic studies on green bonds are limited, with most focusing on the impact of green labels on bond yields. This paper, using Sweden as a case study, delves into the broader questions regarding what attracts investors and issuers to the green bond market, the role of green bonds in shifting capital to more sustainable economic activity, and how they impact organizations' approach to sustainability.