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Cologne, 27 August 2024 – From March to the end of May, Ebrahim Vasaf (University of Kassel) wrote his master's thesis on ‘Motivations behind issuing Green Bonds’ with support from IR.on. Mentor Samuel Stott and other colleagues acted as sparring partners for the development of the questionnaire and provided support in gathering company contacts for the survey.
Green bonds and sustainable bonds have become increasingly important for the capital market in recent years and can represent an interesting financing alternative for companies.
A total of 15 SMEs took part in the survey, around a quarter of which have already issued a green bond. Just under three quarters of the companies are planning to issue a green bond in the future.
The question of why some of the companies have not yet issued a green bond also provided interesting insights. The biggest barrier appears to be additional documentation obligations (compared to regular bonds).
The survey results also show that legitimacy and sustainability motives are more of an incentive to issue a green bond rather than financial motives. This indicates that the commitment of companies is primarily based on social expectations and the actual protection of the environment. Financial motives - such as attracting new investors - tend to play a subordinate role. The desire to build a positive reputation and to be perceived as a company that acts morally and ethically are particularly important for companies. At the same time, the companies surveyed emphasise their responsibility for climate protection and the environment.
This matches the findings of the annual assessment of the SME bond market in 2023, which shows that the financial success of sustainable bonds on the SME bond market has so far been modest overall.
These findings from Ebrahim's academic work help to better understand the motivations of SMEs to issue sustainable bonds and therefore the SME bond market. We greatly appreciated working with Ebrahim and were grateful for his interest and commitment. We would like to thank Ebrahim for the excellent collaboration and wish him all the best for his future career and life!
If you are interested in the further details of the master's thesis and the topic of sustainable bonds, please contact us.
IR.on Aktiengesellschaft
Samuel Stott
Consultant for sustainability communication and ESG
T +49 (0) 221 9140 970
E esg(at)ir-on.com
