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Green bonds as an innovative sovereign financial instrument

Author

Listed:
  • Marcin Wisniewski

    (Poznan University of Economics and Business)

  • Jakub Zielinski

    (Poznan University of Economics and Business)

Abstract

Motivation: There is a growing awareness of the impact that climate change is having on the world economy and the standards of living. Green bonds (GBs) are relatively new and innovative instruments on the financial market where the capitals are also invested in projects that generate environmental or climate benefits. The newness of this financial instrument could be the main reason behind the scarcity of scientific publications on green bonds; thus, it remains an undeveloped research area. One of the problems is also classifying securities as GBs. Therefore, it is exceedingly important to distinguish labelled green bonds and unlabelled climate-aligned bonds. Aim: In the article, the authors will present the evolution of the green bonds market and attempt to assess the observed and potential effects of green bonds’ issuances, taking into account governments issues. Results: Green bonds are the next stage of market growth. In the article, the authors will present the benefits of green bonds and the positive impact that their issuance has on the issuer and on investors’ image as socially responsible entities. Therefore, strong investor demand can lead to oversubscription. Thus, green bonds could be one of the easiest ways to attract investors and potentially increase issuance size which can contribute to lower costs of financing green public tasks.

Suggested Citation

  • Marcin Wisniewski & Jakub Zielinski, 2019. "Green bonds as an innovative sovereign financial instrument," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(1), pages 83-96, March.
    • Handle: RePEc:cpn:umkeip:v:18:y:2019:i:1:p:83-96
    DOI: 10.12775/EiP.2019.007
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    References listed on IDEAS

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    1. Torsten Ehlers & Frank Packer, 2017. "Green bond finance and certification," BIS Quarterly Review, Bank for International Settlements, September.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Petr Jakubik & Sibel Uguz, 2021. "Impact of green bond policies on insurers: evidence from the European equity market," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 45(2), pages 381-393, April.
    2. Marcin Wiśniewski & Krzysztof Šyskawa, 2020. "Development Impact Bonds in Financing Flood Risk Management," Scientific Annals of Economics and Business (continues Analele Stiintifice), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 67(4), pages 437-452, December.

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    More about this item

    Keywords

    green bond; financial market; green growth; climate change; public debt;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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