A climate finance tool: green bonds and market evolution during Covid-19

Abstract

Climate change is perhaps the most urgent issue of the 21st century, and in the last years has captured more and more attention. With no doubt human activity has impacted the environment to a no-turning-back point; dramatic weather events are increasing, and the temperatures are rising dramatically. A new level of sensitivity is growing in every field and has spread in the financial one too. This trend is known as “climate finance”. The first chapter analyses the climate change risks and consequences, then the phenomenon of climate finance, that can be helpful while transitioning into a more sustainable world and to a low-carbon economy. The focus of the thesis, and the topic of the second chapter, is one of the main financial instruments of climate finance, named green bonds. They represent a small percentage of total bonds, but they are becoming progressively more popular. This tool can help invest in sustainable projects and on the fight to climate change. Humanity has been facing another serious crise recently, which is the Covid-19 pandemic. Covid-19 represents a challenge for climate finance and a threat for the climate change fight. The third chapter focuses on the general impact that the pandemic had on economies, on the financial markets and particularly on the green bond instrument. Eventually, through the archive of BloombergLab, the green bonds issuances are analyzed with reference to the pandemic time window and whether pandemic negatively affected their issuance.