Green, Sustainable and Solidary Bonds

Dear Colleagues,

The impact of the latest global recession is an opportunity for rethinking and changing the dominant economic model geared towards economic growth based on the unsustainable consumption of goods and resources. This amount of consumption has contributed to increased concentrations of polluting emissions and has led some policy makers and entrepreneurs to implement new environmental procedures with strong carbon mitigation components. In the challenge to transition to a sustainable and environmentally-friendly economic model, the concept of green finance has gradually and more powerfully emerged. Green finance is understood as a response to possible breaches in the supply of financing sources and a mechanism that promotes increased financial flows to companies (Glomsrod and Wei, 2018).

Following this lens of analysis, the green bond market presents itself as an ecological financial instrument, since the former has characteristics that allow the achievement of the objectives of the Paris Convention (Tolliver et al., 2020). The green bond market is attractive for investors, which, mainly for non-pecuniary reasons (Zerbib, 2019), allows for the issuance of debt at a lower cost (Dafermos et al., 2018).

However, despite the growing demand for green bonds, this market still has a lower volume of transactions compared to the conventional bond and equities market (Reboredo and Ugolini, 2018). This may be due to an asymmetry in terms of supply and demand (e.g., lack of liquidity) due to a small supply of green bonds (Febi et al., 2018). Thus, there are many research opportunities to advance knowledge about the factors that can promote the growth of the green bond market (Chiesa and Barua, 2019), which can be allied to recent opportunities that solidarity bonds (e.g., Eurobonds (van der Wansem et al., 2019)) can bring to the development of an alternative economic model based on sustainable development and anchored on values of political, economic and social solidarity.

Thus, there is a need to carry out comparative studies on conventional bonds, green bonds, sustainable bonds and solidarity bonds from a government, corporate and investor perspective. This Special Issue aims to contribute to the extension of the literature on green finance, climate and societal change and sustainable markets.

References:

Chiesa, M., & Barua, S. (2019). The surge of impact borrowing: the magnitude and determinants of green bond supply and its heterogeneity across markets. Journal of Sustainable Finance and Investment, 9(2), 138–161.

Dafermos, Y., Nikolaidi, M., & Galanis, G. (2018). Climate Change, Financial Stability and Monetary Policy. Ecological Economics, 152, 219–234.

Febi, W., Schäfer, D., Stephan, A., & Sun, C. (2018). The impact of liquidity risk on the yield spread of green bonds. Finance Research Letters, 27, 53–59.

Glomsrød, S., & Wei, T. (2018). Business as unusual: The implications of fossil divestment and green bonds for financial flows, economic growth and energy market. Energy for Sustainable Development, 44, 1–10.

Reboredo, J. C., & Ugolini, A. (2018). The impact of energy prices on clean energy stock prices. A multivariate quantile dependence approach. Energy Economics, 76, 136–152.

Tolliver, C., Keeley, A. R., & Managi, S. (2020). Drivers of green bond market growth: The importance of Nationally Determined Contributions to the Paris Agreement and implications for sustainability. Journal of Cleaner Production, Volume 244, 20 January 2020, 118643.

van der Wansem, P., Jessen, L., & Rivetti, D. (2019). Issuing International Bonds A Guidance Note. Discussion Paper MTI Global Practice, N.º 13 April 2019, The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433.

Zerbib, O. (2019). The effect of pro-environmental preferences on bond prices: Evidence from green bonds. Journal of Banking and Finance, 98, 39–60.

Prof. Dr. João Carlos Correia Leitão
Dr. Muhammad Faraz Riaz
Prof. Dr. Alfonso Rojo Ramírez

Guest Editors

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• Climate mitigation 
• Energy transition 
• Financial markets 
• Global crisis and sustainable finance 
• Green and sustainable bonds 
• Green finance 
• Low carbon 
• Risk mitigation strategies and bonds emission 
• Solidarity bonds and debt mutualization 
• Sustainable energy investments