Green bonds in the transport sector

Bace, Edward ORCID: https://orcid.org/0000-0003-4452-0350 and Singh, Sukhjt (2023) Green bonds in the transport sector. 43rd EBES Conference – Madrid Program and Abstract Book. In: 43rd EBES Conference, April 12-14, 2023, Madrid, Spain. e-ISBN 978-605-71739-3-5. [Conference or Workshop Item]

PDF (conference abstract) - Published version (with publisher's formatting) Restricted to Repository staff and depositor only Download (109kB)

Abstract

This paper aims to highlight the benefits of transportation companies to issue unsecured and covered green, social and sustainable bonds, which are well suited to promote environmental and social investment in the sector. These benefits have already been illustrated for many participants. Green bonds represent an effective and accessible way for the environmental and social agenda to be advanced throughout the transport industry, and to raise the sector’s standing globally in addressing climate change and social issues, through strengthening of environmental, social and governance (ESG) structures. Data and methods: The study examines the evolution of covered and uncovered green bonds and their application in the transport industry. Different characteristics of green bonds are explored, including issuance process, use of proceeds, eligible assets for covered bonds, disclosure standards, project evaluation and selection, and reporting. The approach contrasts European and North American experience with what more emerging economies can expect going forward, in an effort to deliver some recommend dations in view of future prospects. Results: Green, social and sustainable (GSS) bonds only account for 3% of total GSS bonds, issued globally in the debt markets, suggesting substantial growth potential (Caron and Munoz, 2021). There is mounting interest in green bonds globally, where they are proven to be efficacious in helping to meet financing and environmental targets. While social or green classifications are not always directly credit relevant, if they support demand leading to narrower spreads, this can be positive for credit ratings, other things being equal (Pagani et al., 2021; Zerbib, 2019). The social and environmental challenges of the carbon intensive transport industry require substantial funding in a resource-driven context. The increasing use of green bonds, already under way in many sub-sectors, is found to be an effective solution to help meet these challenges, while driving the agenda of responsibility forward (Tang and Zhang, 2018).
Conclusions:This focused overview of green bonds reveals them to be effective instruments for promoting environmental and social responsibility, for transport entities, both public sector and corporations (Valavina et al., 2021). They ought to form an integral and increasing component of funding plans going forward.

Actions (login required)

View Item

Statistics

DownloadsShow export options

Export as CSVXMLJSON

Activity Overview

6 month trend

2Downloads

6 month trend

94Hits

Additional statistics are available via IRStats2.