EURO 2024 Copenhagen
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1876. Green Bonds and Environmental Scores: analysing impact and factors of environmental performance

Invited abstract in session MB-8: AI in Eco-Finance: Time, Space, and Networks, stream AI & Innovation in Sustainable Finance.

Monday, 10:30-12:00
Room: 1020 (building: 202)

Authors (first author is the speaker)

1. Christina Erlwein-Sayer
Department of Business Mathematics, HTW University of Applied Sciences Berlin

Abstract

Green bonds are widely utilized financial instruments designed for the purpose of funding environmentally friendly projects. Positive environmental effects of green bonds have been analyzed previously. These investigations largely rely on the Difference-in-difference models to gauge the overall impacts. We investigate the influence of corporate green bonds on the environmental performance of issuers at an individual level and employ a Controlled Interrupted Time Series Model. When statistically significant effects on the issuers’ environmental performance, measured by the E score of the issuers’ ESG, are determined, two sequential experiments are performed: firstly, we probe into the factors that can influence the issuance of green bonds. Secondly, we examine the interrelations between company characteristics, issuer characteristics, and the magnitude of the effects released by green bonds. To address the first and second experiment, we build a random forest and a generalized additive model, respectively. Our findings indicate that the environmental performance of most issuers improves following the issuance of green bonds. While both bond and company characteristics influence the impact of green bonds, it is the company’s characteristics that play a more pivotal role.

Keywords

Status: accepted

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