Climate bond issuance and enterprise EESM competitiveness: Steps toward environmental and climate-responsible development

Abstract

Environmental financial instruments are of paramount importance in facilitating the advancement of Environmental, Climate-Responsible development and making substantial contributions towards the attainment of carbon neutrality. However, these corporations have also faced criticism for misappropriating environmental funds to engage in deceptive practices known as “greenwashing”. The primary objective of this study is to develop empirical models for the purpose of examining the influence of Climate Bonds on the environmental, economic, social, and management (EESM) Competitiveness of corporations. Recent studies have demonstrated that the utilization of Climate Bonds has the capacity to significantly augment the environmental, economic, social, and management (EESM) proficiency of corporations. On average, there is a substantial increase in Environmental, economic, social, and management (EESM) scores, amounting to approximately 20.5%.

The available empirical evidence indicates that the issuance of Climate Bonds has the potential to enhance the accessibility of Enterprise financing, lower financing expenses, and optimize the maturity profile of Enterprise debt. Furthermore, the amelioration of fiscal limitations and the allocation of resources earmarked for environmentally sustainable goals through the utilization of Climate Bonds can result in advantageous outcomes for both Enterprise governance and Enterprise environmental governance. The claim is supported by empirical evidence indicating that the issuance of Climate Bonds can enhance Enterprise profitability, enable business growth, foster Environmental innovation, and promote environmental stewardship. The analysis of heterogeneity reveals that the impact of Climate Bond issuance on environmental, economic, social, and management (EESM) Competitiveness is notably significant within the private Enterprise sector and among companies that receive substantial media attention.