An Empirical Analysis of Corporate Sustainability Bonds : WestminsterResearch

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Title	An Empirical Analysis of Corporate Sustainability Bonds
Type	Journal article
Authors	Sivaprasad, S. and Mathew, S.
Abstract	This study examines the performance of worldwide corporate sustainability bonds issued from 2014 to 2020. Unlike traditional bonds, the proceeds of sustainability bonds are utilised for financing projects to bring about environmental and socio-economic benefits. We analyse the short-term market reaction to announcements of sustainability and traditional bond issuance and document that the stock market reaction to an announcement of sustainability bonds is stronger than that for traditional bonds. We also find that multiple issuers of sustainability bonds get a more favourable market reaction than single issuers. Finally, we examine if ESG scores can positively and significantly impact the corporate performance of firms through the lens of sustainability bond issuances. We find that ESG scores are the primary performance drivers for firms, and the effect is more pronounced for firms that issue sustainability bonds. Overall, the results suggest that issuers of sustainability bonds show their commitment towards environmental and societal goals and thus benefit from favourable stock market reactions.
Keywords	Corporate sustainability bonds
	traditional bonds
	ESG
	sustainable finance
	market performance
Journal	Business Strategy and The Environment
Journal citation	33 (4), pp. 3299-3316
ISSN	0964-4733
	1099-0836
Year	2024
Publisher	Wiley
Publisher's version	Bus Strat Env - 2023 - Mathew - An empirical analysis of corporate sustainability bonds.pdf License CC BY 4.0 File Access Level Open (open metadata and files)
Digital Object Identifier (DOI)	https://doi.org/10.1002/bse.3663
Published online	20 Dec 2023
Published in print	May 2024

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An Empirical Analysis of Corporate Sustainability Bonds

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