Green Bonds as a Tool of Green Financing

Green bonds are a new instrument to finance decarbonization and environmental sustainability projects. Despite significant growth in green bond issuance, there is little evidence on why companies issue them and whether this financing tool bolsters sustainability initiatives. We provide an overview of the academic literature on green bonds issued by for-profit companies. We focus our discussion on the determinants of a company's decision to issue a green bond and how green bonds impact environmental and financial outcomes. We conclude by providing suggestions for further research on green bonds