The issuer perspective on green bonds: A study on why firms issue green bonds on the Swedish capital market

Sammanfattning: The green bond market has experienced extensive growth during the past decade as investors start redirecting their funds towards more environmentally-friendly investments. This paper examines the underlying reasons for why firms decide to issue green bonds by conducting a survey. The study is limited to the Swedish capital market and respondents are issuers of green bonds on this market. The results suggest that the main reasons why firms decide to issue green bonds is the increased investor attention it brings and the opportunity of position the firm as sustainable. Furthermore, we show that cheaper financing and a lower risk profile of green bonds are not as important for the decision to issue green bonds. We argue that these results can explained by the difficulty to recognise the risk and return benefits of a green bond issuance and that the increased importance of sustainability makes it advantageous to highlight sustainability work.