**5. Conclusions and Policy Implications**

## *5.1. Conclusions and Further Steps*

The increasing prominence of green bonds as a financial tool to fight climate change has sparked the interest of many researchers in recent years. While it has been recognized that green bonds can be useful for climate policy, the existence of a green bond premium meaning that green bonds show a lower rate of return than their brown or conventional counterparts—remains open to academic debate. Furthermore, researchers seem to have reached a consensus that green bonds tend to be riskier assets. However, research on green bonds provides general conclusions on the global green bonds market. No study so far has looked at the regional characteristics of green bonds, based on the place of issuance, with the focus on Asia and the Pacific.

The financial sector in Asia and the Pacific is dominated by traditional banking, with venture capitalists being quite scarce [3]. However, [5] highlighted that traditional banking is not necessarily an appropriate source of funding for green bonds due to maturity mismatch and the conservative approach of banking. Indeed, the study argued that maturity mismatch occurs as bank liabilities are short- to medium-term, while infrastructure projects are more long-term oriented, leading to risk overvaluation. Therefore, this study aimed to provide a comparative analysis of regional characteristics and green bonds' performance.

Using data from both BNEF and CBI, we gathered panel data composed of a total of 1174 observations and divided them into regional subsamples. Then, the study combined summary statistics as well as mean-variance and regression analysis to reach its conclusion. The results of this research are summarized in Table 7.


**Table 7.** Regional characteristics of green bonds.

Source: Authors' compilation.

Based on the empirical results, we were able to show that green bonds issued in Asia and the Pacific had different characteristics from those issued in Europe and North America. Specifically, Asian bonds proved to have higher returns, but also higher associated risks, as these bonds showed higher levels of heterogeneity than their European or North American counterparts. In the sample, bonds from Asia and the Pacific were generally issued in the long term, as their time to maturity was almost twice as long as that of bonds issued in other regions. However, the summary statistics revealed the dominance of the banking and finance sector in Asia—a trend that is not found in other regions. The empirical analysis proved that bonds issued by banks in Asia consistently showed lower returns; hence, there is an urgent need for diversification of issuers in Asia and the Pacific.
