Green Bonds and Corporate ESG Performance
Journal: Modern Economics & Management Forum DOI: 10.32629/memf.v6i2.3965
Abstract
This paper investigates the effect of green bond policy on corporate ESG performance using the promulgation of the “Green Bond Guidelines”(2015 Guidelines) policy in China as aquasi-natural experiment. By constructing a unique penal of data spanning from 2009 to 2021, we draw several findings. We collected data from all 785 companies listed on the Kuala Lumpur Stock Exchange. Our final sample consisted of 91 companies that have an ESG disclosure score. The high cost of common bonds and the crowding-out effect of green bonds on common bonds seek more to ease financing constraints, and enterprises that have not issued bonds are more likely to issue green bonds for the reason of building green projects. China's green bond regime has continued to evolve, from the head office announcing at the end of 2015 that enterprises could issue green bonds with project credit, to the Development and Reform Commission proposing a maximum gearing limit for enterprises to issue green bonds in order to alleviate corporate financing constraints, to the Securities Regulatory Commission clarifying the investment of funds raised by green bonds, which in principle does not support highly polluting and energy-consuming industries, to the explicit removal of the coal and fuel categories from the support act in 2021, which has fully aligned with international practice.
Keywords
green bonds, ESG performance, common bonds
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