Even though 'Green Bonds' are huge now, companies aren't actually saving any money on borrowing by using them.
April 2, 2026
Original Paper
In Search of Premium in Sustainable Bonds
SSRN · 6508839
The Takeaway
It is widely assumed that investors accept lower yields for sustainable debt (the 'greenium'), but this global study found no consistent borrowing cost advantage. Companies issue them for reputation and signaling rather than any direct financial benefit.
From the abstract
This paper investigates the existence of a premium in the pricing of sustainable bonds at issuance, that is, a borrowing cost advantage for issuers over conventional bonds. Although the sustainable debt market has grown substantially, existing evidence on this sustainable premium remains mixed across methodologies, periods, and market segments. Using a tight bond-matching approach on a global dataset of corporate bonds issued between 2012-2023, we find no consistent evidence of a sustainable pre