Publications
Publications
- Forthcoming
- Annual Review of Financial Economics
The Pricing and Ownership of U.S. Green Bonds
By: Malcolm Baker, Daniel Bergstresser, George Serafeim and Jeffrey Wurgler
Abstract
We study green bonds, which are bonds whose proceeds are used for environmentally sensitive purposes. After an overview of the U.S. corporate and municipal green bonds markets, we study pricing and ownership patterns using a simple framework that incorporates assets with nonpecuniary utility. As predicted, we find that green municipal bonds are issued at a premium to otherwise similar ordinary bonds. We also confirm that green bonds, particularly small or essentially riskless ones, are more closely held than ordinary bonds. These pricing and ownership effects are strongest for bonds that are externally certified as green.
Keywords
Green Bond; Pricing; Climate Finance; ESG; SRI; Sustainable; Municipal; Bonds; Environmental Sustainability; Financial Markets; Price; Ownership; United States
Citation
Baker, Malcolm, Daniel Bergstresser, George Serafeim, and Jeffrey Wurgler. "The Pricing and Ownership of U.S. Green Bonds." Annual Review of Financial Economics (forthcoming).