There is no link between green bonds and companies reducing their carbon emissions, according to a report from the Bank for International Settlements (BIS), the Switzerland-based central banking organisation.
Issuer-level ratings based on carbon intensity could be a more effective way to reduce corporate carbon emissions, the report suggests.
In the latest addition to a longstanding debate on whether current green labels and standards contribute to decarbonisation in the real economy, the report assesses whether green bond issuance – which surpassed $250bn in 2019 – is associated with material reductions in carbon emissions at issuers.
The report’s authors used S&P Trucost data to find that “green bond labels are not associated with falling or even comparatively low carbon emissions at the firm level”.
BIS, which published the report but says the views expressed are those of the authors, launched a green bond fund for its central bank cust…