ESG Bonds: Quo Vadis? Towards Sustainability or Greenwashing? A Study of Indian ESG Bonds
Keywords:
Green bonds, Corporate bonds, sustainable development goals, Sustainable green bonds, environmental social governance (ESG) , greenium, green financing, green washing.Abstract
As firms compete in practicing green marketing, green human resource management and green accounting so as to meet the Sustainable Development Goals, they issue ESG bonds in the form of green bonds, transition bonds, social bonds, sustainability bonds, climate bonds or sustainability-linked bonds focused on projects that would mitigate climate change. Green bonds must strictly adhere to the Green Bond Principles. Apart from corporates, the national government also releases Sovereign Green Bonds (SGrBs) to lead financial inclusion by taking government and public-private partnership projects in a greener way. Investors must remain alert to whether ESG funds are diverted to green financing or whether the promise is a form of greenwashing. ESG funds and SGrBs for eco-friendly projects and infrastructure remain lacklustre among investors, and there are no direct methods to measure the outcomes of green investing. This paper discusses green bonds, their yield to maturity, and the outcome of such bonds.
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