XF-0231FHK-1 Green Bonds: Environmental Performance and Capital Market Response
Abstract
Green Bonds: Environmental Performance and Capital Market Response Avis Devine∗ York University Nils Kok† Maastricht University Halil Özgür‡ Concordia University Erkan Yönder§ Concordia University 8th February, 2024 Abstract Green bonds are growing in popularity, both as a financial tool and a path toward responsible investing. This brings a demand for measurement of both financial and environmental performance of these instruments. Yet analysis of the latter is largely missing, and that which exists is noisy, due to vague green bond commitments and difficulty in measuring outcomes in general corporations. We capitalize on the uniquely clean nature of REIT green building investments to measure the environmental performance of green bonds, and then analyze the response of capital markets to green bond issuance. Using highly rigorous modeling techniques, we find evidence that green bond issuance leads to enhanced environmental performance for a firm, within a two year horizon. We further find that capital markets appear to evaluate green bond issuers as lower risk investments, offering bond spread discounts to green bond issuers as well as increased access to equity. . Keywords: Capital Structure, Green Bonds, Commercial Real Estate, REITs, ESG, Green Building ∗Schulich School of Business, York University, 4700 Keele St, Toronto, ON M5E1Z5 Canada adevine@schulich.yorku.ca †Department of Finance, Maastricht University, PO Box 616, Maastricht, 6200 MD, the Netherlands. …
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Cites (32)
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People Cited in This Document
- Pelin Özgür author Tilburg University
- Erkan Yönder author Concordia University
- Avis Devine author York University
- Nils Kok author Maastricht University
How to Cite This Record
Use the XFID in citations to create a stable, permanent reference that resolves to this registry entry regardless of the source URL.
Real Estate Research Institute (REI) (2024). Green Bonds: Environmental Performance and Capital Market Response. XFID: XF-0231FHK-1. Retrieved from https://xframework.id/XF0231FHK1
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