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Analysis of Success Factors, Benefits, and Challenges of Issuing Green Bonds in Lithuania

Author

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  • Julija Bužinskė

    (Department of Financial Engineering, Business Management Faculty, Vilnius Gediminas Technical University (VILNIUS TECH), LT-10223 Vilnius, Lithuania)

  • Jelena Stankevičienė

    (Department of Finance, Faculty Economics and Business Administration, Vilnius University, LT-01513 Vilnius, Lithuania)

Abstract

The objective of this study is to establish understanding of the success factors in issuing green bonds including the corresponding benefits and challenges of their issuance in Lithuania. The research methodology is comprised of the three parts: (1) a literature review to examine the success factors, benefits, and challenges of issuing green bonds as identified by researchers in different countries; (2) use of the methodological potential of the analysed field to formulate an expert survey via the analytical hierarchy process method; (3) summary of the results of the survey and proposals for its further development. Findings suggest that the reputation, good credit rating, and the environmental, social, and governance score of the issuer are the key considerations in the success of green bonds issuance. On the benefits side, green bonds bear low investment risks with the ability to raise large investment amounts while providing quantifiable and measurable benefits. The challenges related to the issuance of green bonds include greenwashing, the questionable role of the green bond market in environmental protection, and insufficient financial and economic benefits of issuance. Practical implications of the study are based on the notion that findings can be applied as a reference point by potential issuers willing to issue green bonds, investors willing to invest in green bonds, and policy-makers willing to promote sustainable and green finance. An original aspect of this paper is its study focus on peculiarities of the issuance of green bonds in the region, in a smaller country which can serve as a reference point for considering potential issuance of green bonds.

Suggested Citation

  • Julija Bužinskė & Jelena Stankevičienė, 2023. "Analysis of Success Factors, Benefits, and Challenges of Issuing Green Bonds in Lithuania," Economies, MDPI, vol. 11(5), pages 1-20, May.
    • Handle: RePEc:gam:jecomi:v:11:y:2023:i:5:p:143-:d:1143930
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    References listed on IDEAS

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    2. Kung, Chih-Chun & Lan, Xiaolong & Yang, Yunxia & Kung, Shan-Shan & Chang, Meng-Shiuh, 2022. "Effects of green bonds on Taiwan's bioenergy development," Energy, Elsevier, vol. 238(PA).
    3. Ghada Elshafei & Dušan Katunský & Martina Zeleňáková & Abdelazim Negm, 2022. "Opportunities for Using Analytical Hierarchy Process in Green Building Optimization," Energies, MDPI, vol. 15(12), pages 1-24, June.
    4. Rakesh Kumar Verma & Rohit Bansal, 2023. "Stock Market Reaction on Green-Bond Issue: Evidence from Indian Green-Bond Issuers," Vision, , vol. 27(2), pages 264-272, April.
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    6. Peter Lau & Angela Sze & Wilson Wan & Alfred Wong, 2022. "The Economics of the Greenium: How Much is the World Willing to Pay to Save the Earth?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 81(2), pages 379-408, February.
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