Greening the Financial Sector: Evidence from Bank Green Bonds

46 Pages Posted: 10 Nov 2021 Last revised: 9 May 2022

See all articles by Mascia Bedendo

Mascia Bedendo

University of Bologna - Department of Management

Giacomo Nocera

Audencia Business School

Linus Siming

Free University of Bozen-Bolzano - Faculty of Economics and Management

Date Written: November 9, 2021

Abstract

Banks are expected to play a key role in assisting the real economy with the green transition process. One of the tools used for this purpose is the issuance of green bonds. We analyze the characteristics of banks that issue green bonds to understand: (i) which banks are more likely to resort to these funding instruments, and (ii) if the issuance of green bonds leads to an improvement in a bank’s environmental footprint. We find that large banks and banks that had already publicly expressed their support for a green transition are more likely to issue green bonds. Conditional on being a green bond issuer, smaller banks tend to resort to green bonds in a more persistent manner and for relatively larger amounts, while larger banks issue green bonds on a more occasional basis and for smaller amounts. This heterogeneity is also reflected in our findings that only banks that issue green bonds more intensively improve their emissions scores and reduce lending to polluting sectors, thus contributing to the decarbonization of the financial sector.

Keywords: Green bonds, Green banking, Environmental performance, Sustainable finance

JEL Classification: G21, G32, Q54, Q56

Suggested Citation

Bedendo, Mascia and Nocera, Giacomo and Siming, Linus, Greening the Financial Sector: Evidence from Bank Green Bonds (November 9, 2021). Available at SSRN: https://ssrn.com/abstract=3959745 or http://dx.doi.org/10.2139/ssrn.3959745

Mascia Bedendo (Contact Author)

University of Bologna - Department of Management ( email )

Via Capo di Lucca 34
Bologna, Bologna 40126
Italy

Giacomo Nocera

Audencia Business School ( email )

8 route de la Jonelière, BP 31222
Nantes Cedex 3, Cedex 3 44312
France

Linus Siming

Free University of Bozen-Bolzano - Faculty of Economics and Management ( email )

Via Sernesi 1
39100 Bozen-Bolzano (BZ), Bozen 39100
Italy

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