Evaluating Green Bonds' Sustainable impact

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School of Business | Bachelor's thesis
Degree programme
26 + 3
Environmental uncertainty and its implications are widely considered to be one of the megatrends affecting societies worldwide. As a result, financial markets have had to adopt to these circumstances. Sustainable finance is considered a major tool for corporations and nations to combat climate change (T. Busch et al. 2015; Camilleri, 2021). One of the current main innovations in the domain of sustainable finance is the rising popularity of Green Bonds. Green Bonds are debt instruments, that are used to finance or refinance green projects. Over the last decade, the issuance of green bonds has grown over tenfold (ICMA 2023). Even though the pricing of green bonds and motivations behind their issuance are extensively studied (e.g. Flammer, 2021; Maltais & Nykvist, 2020), little is known on how green bonds actually impact sustainability. This study takes a management accounting view on the sustainable impact green bonds deliver on their issuing companies. The purpose of this approach is to explore pathways and mechanisms of impact green bonds might initiate. The data of this study was collected through four expert interviews, and the results were expressed by using management control systems as a framework. The main contribution of this method was a set of operational level mechanisms of how green bonds might initiate sustainable impact. This study finds that sustainable impact of green bonds is delivered mainly through cultural control systems. The operational level impact evaluations are also used to suggest that to enhance the sustainable impact, future research of green bonds could focus on impact reporting and cybernetic control systems.
Thesis advisor
Taussi, Thomas
green bonds, sustainable finance, green finance, management control systems
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