Corporate Green Bonds

41 Pages Posted: 27 Feb 2018 Last revised: 18 Jul 2018

Date Written: July 5, 2018


This study examines corporate green bonds, a new practice in corporate finance. I document that the issuance of corporate green bonds has become more prevalent over time, particularly in industries where the natural environment is financially material. I further document that green bonds yield i) positive announcement returns, ii) improvements in long-term value and operating performance, iii) improvements in environmental performance, iv) increases in green innovations, and v) an increase in ownership by long-term and green investors. Overall, these results indicate that green bonds are effective—companies invest the proceeds in projects that improve the company’s environmental footprint and contribute to long-term value creation—and help attract an investor clientele that is sensitive to the environment.

Keywords: corporate green bonds, impact investing, sustainable finance, climate change, corporate sustainability, longterm orientation

JEL Classification: G23, M14, D22, Q2, G14

Suggested Citation

Flammer, Caroline, Corporate Green Bonds (July 5, 2018). Available at SSRN: or

Caroline Flammer (Contact Author)

Boston University ( email )

Boston University Questrom School of Business
595 Commonwealth Avenue, Office 634A
Boston, MA 02215
United States


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