International Review of Environmental and Resource Economics > Vol 15 > Issue 1-2

Green Bonds: The Evolution of a Sustainable Financial Instrument on the Cutting Edge

Antonio Malorgio, Bocconi University Alumnus, Sustainable Finance Expert and Business Analyst, Italy, Emanuele Teti, Associate Professor of Corporate Finance, Università di Pisa, Italy, , Maurizio Dallocchio, Full Professor of Corporate Finance, Bocconi University, Italy
Suggested Citation
Antonio Malorgio, Emanuele Teti and Maurizio Dallocchio (2021), "Green Bonds: The Evolution of a Sustainable Financial Instrument on the Cutting Edge", International Review of Environmental and Resource Economics: Vol. 15: No. 1-2, pp 95-135.

Publication Date: 28 Jul 2021
© 2021 A. Malorgio, E. Teti and M. Dallocchio
Asset pricing,  Corporate finance
JEL Codes: G30G32
Green bondscorporate financefinancial instrumentssustainability


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In this article:
1 Introduction 
2 Role and Function 
3 Features and Literature Background 
4 Typologies 
5 Contribution to Environmental Policy 
6 Use 
7 Effects 
8 Conclusions and Future Research 


This paper analyses the most recent literature available on the green bond, a financial instrument that raises funds for environmentally friendly projects. The aim of this research is to build a comprehensive review based on green bond roles, functions, features, typologies, general uses and effects. Ultimately, we try to address its potential contribution to the objectives of environmental policy. Our research reveals several roles that the instrument is taking. The regulation, the ecosystem and the best practices being developed around it may further boost the advance of sustainable activities in the market. Since 2013, when the issuances started to grow considerably, green bond market behaviour has been relatively similar to that of the conventional bond market. There have, however, been cases in which it attracted greater attention from investors and others in which it appeared to perform better than regular bond instruments. The green bond is also increasingly being considered as a strong potential support mechanism for the post-pandemic crisis recovery. Last, the paper highlights opportunities for future research on the subject.