How Green are Green Debt Issuers?

IMF Working Paper Series

30 Pages Posted: 28 Jul 2021

See all articles by Jochen Schmittmann

Jochen Schmittmann

International Monetary Fund (IMF)

Han Teng Chua

International Monetary Fund (IMF)

Date Written: July 23, 2021

Abstract

Green debt markets are rapidly growing while product design and standards are evolving. Many policymakers and investors view green debt as an important component in the policy mix to achieve the transition to a low carbon economy and ensure the pricing of climate risks. Our analysis contributes to the nascent literature on the environmental impact of green debt by documenting the CO2 emission intensity of corporate green debt issuers. We find lower emission intensities for green bond issuers relative to other firms, but no difference for green loan and sustainability-linked loan borrowers. Green bond, green loan, and sustainability-linked loan borrowers lower their emission intensity over time at a faster rate than other firms.

Keywords: ESG, Sustainable Finance, Green Finance, Green Bonds, Green Loans, Sustainability-linked Debt, Climate Finance

JEL Classification: G32, Q54, Q56

Suggested Citation

Schmittmann, Jochen and Chua, Han Teng, How Green are Green Debt Issuers? (July 23, 2021). IMF Working Paper Series, Available at SSRN: https://ssrn.com/abstract=3893025 or http://dx.doi.org/10.2139/ssrn.3893025

Jochen Schmittmann (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Han Teng Chua

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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