Carbon emissions and the cost of debt in the eurozone: The role of public policies, climate‐related disclosure and corporate governance

Palea, Vera; Drogo, Federico

doi:10.1002/bse.2550

Cited by 97 publications

(54 citation statements)

References 107 publications

(142 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…This supports the view that climate change exposure is not only increasingly priced but also affects the overall creditworthiness of companies on bond and loan markets. In line with this evidence, Palea and Drogo (2020) document that carbon risk translates into a higher cost of debt, and, importantly, transparency and disclosure may act as mitigating factors.…”

Section: Resultsmentioning

confidence: 83%

Green bonds as a tool against climate change?

2021

View full text Add to dashboard Cite

Although green bonds are becoming increasingly popular in the corporate finance practice, little is known about their implications and effectiveness in terms of issuers' environmental engagement. With the use of matched bond-issuer data, we test whether green bond issues are associated to a reduction in total and direct (Scope 1) emissions of nonfinancial companies. We find that, compared with conventional bond issuers with similar financial characteristics and environmental ratings, green issuers display a decrease in the carbon intensity of their assets after borrowing on the green segment. The decrease in emissions is more pronounced, significant and long-lasting when we exclude green bonds with refinancing purposes, which is consistent with an increase in the volume of climate-friendly activities due to new projects. We also find a larger reduction in emissions in case of green bonds that have external review, as well as those issued after the Paris Agreement. K E Y W O R D S climate change, corporate sustainability, environment, green bonds, impact investing 1 | INTRODUCTION Green bonds are debt instruments that differ from conventional fixed income securities only in that the issuer pledges to use the proceeds to finance projects that are meant to have positive environmental or climate effects. Since its debut in 2007, the green bond market has been growing steadfastly. According to the Climate Bond Initiative (2020), new issues have reached 230 billion euros (257 billion USD) globally in 2019, up from 142 billion in 2018 and 28 billion euros in 2014.Although the overall size of the green segment is still tiny in comparison with the funds raised with conventional bonds, there is massive potential for further market growth as environmental issues are raising high on the policy agenda. For instance, Europe alone is estimated to need about 180 billion euros of additional investment a year to achieve the targets set for 2030 in the context of the 2015 Paris Agreement on climate change, including a 40% cut in greenhouse gas (GHG) emissions.The growing interest of public policy towards green bonds has indeed already materialized into a number of initiatives to encourage market participants, on both the demand and the supply side. For instance, direct subsidies or grant schemes, such as the Sustainable Bond Grant in Singapore, are in place to support eligible issuers in covering the additional costs associated with external review for the green securities.Likewise, several jurisdictions worldwide, including China and Honk Kong, have issued regulations in order to enhance transparency and disclosure on the green bond market, which is instrumental in aligning investors' incentives. A major development at the international level is the design of uniform green bond standards by the European Commission, in the context of a broader initiative to promote sustainable finance. Like for existing market-based voluntary standards, the proposed European Union (EU) standards adopt a project-based approach grounded on the bond p...

show abstract

Section: Resultsmentioning

confidence: 83%

Green bonds as a tool against climate change?

2021

View full text Add to dashboard Cite

show abstract

“…This supports the view that climate change exposure is not only increasingly priced, but also affects the overall creditworthiness of companies on bond and loan markets. In line with this evidence, Palea and Drogo (2020) document that carbon risk translates into a higher cost of debt, while, importantly, transparency and disclosure may act as mitigating factors.…”

Section: The Paris Agreement: a Turning Point?mentioning

confidence: 74%

Green Bonds as a Tool Against Climate Change?

Fatica

Panzica

2020

SSRN Journal

View full text Add to dashboard Cite

This publication is a Technical report by the Joint Research Centre (JRC), the European Commission's science and knowledge service. It aims to provide evidence-based scientific support to the European policymaking process. The scientific output expressed does not imply a policy position of the European Commission. Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use that might be made of this publication. For information on the methodology and quality underlying the data used in this publication for which the source is neither Eurostat nor other Commission services, users should contact the referenced source. The designations employed and the presentation of material on the maps do not imply the expression of any opinion whatsoever on the part of the European Union concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

show abstract

“…Companies, as the micro-main body of the market, and the industry have to adapt to climate change [67,68]. Thus, energy-intensive manufacturing undertakes its role in the energy conservation mission and in emission reduction [69][70][71][72].…”

Section: Discussionmentioning

confidence: 99%

Examining Effect of Green Transformational Leadership and Environmental Regulation through Emission Reduction Policy on Energy-Intensive Industry’s Employee Turnover Intention in China

Zhu

Che

et al. 2021

Sustainability

View full text Add to dashboard Cite

This study explored a theoretical model of factors affecting employee turnover intentions in the energy-intensive industry from the perspective of environmental regulation through emission reduction policy. Moreover, we examined whether green transformational leadership has a negative effect on the perception of turnover risk of energy-intensive corporate employees and their turnover intentions; we collected data on 531 employees in the energy-intensive industries in China. Data analysis was conducted using exploratory factor analysis, reliability and validity analysis, stepwise regression model analysis, and a structural equation model to test the research hypothesis. The results revealed that environmental regulation through emission reduction policy has a significant impact on employee perception of turnover risk and turnover intention in energy-intensive industries in China. The perception of turnover risk has a greater effect on the turnover intention among employees than the emission reduction policy. Moreover, we found that the perceived risk of turnover has a mediating effect in the relationship between environmental regulation through carbon emission reduction policy and turnover intention. However, green transformational leadership has an inhibiting effect on the perception of turnover risk and turnover intention among employees. This research has crucial theoretical significance for the transformation of energy-intensive enterprises and promoting the sustainable development of energy-intensive enterprises in China.

show abstract

Carbon emissions and the cost of debt in the eurozone: The role of public policies, climate‐related disclosure and corporate governance

Cited by 97 publications

References 107 publications

Green bonds as a tool against climate change?

Green bonds as a tool against climate change?

Green Bonds as a Tool Against Climate Change?

Examining Effect of Green Transformational Leadership and Environmental Regulation through Emission Reduction Policy on Energy-Intensive Industry’s Employee Turnover Intention in China

Contact Info

Product

Resources

About