GREEN BONDS AND IMPACT OF THEIR ISSUE ON STOCK RETURNS: LITERATURE REVIEW

Abstract

The article presents the features of green bonds, the extent of their spread in the world, and literature review on their issue impact on stock returns. The emergence of green bonds in the market has implications for financial and economic sustainability as they are intended to finance climate change mitigation, adaptation and other environmental projects. The reaction of financial markets to the issuance of green bonds is important not only for issuers, investors, but also for researchers. Our research revealed that green bonds have some differences compared to traditional bonds, especially in the context of revenue utilization and management, certification and labeling. Over the past decade, green bond issuance has grown nearly 16 times with Chinese companies leading in the market. Literature review revealed that in most cases there is a positive effect of issuing green bonds on the issuers’ stock returns because investors positively assess such signals as greater media attention, transparency of information provided, and the impact of innovation on issuers' performance. In exceptional cases, neutral and negative effects are also determined.