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Background: The impact of climate change on people's health and lives is a growing concern, with viruses, malnutrition, and heat stress potentially causing up to 250,000 deaths per year between 2030-2050. To address this issue, organizations and institutions are taking action to create a more sustainable world. One major step was signing the Paris Agreement in 2015, and financial investors have also taken on greater responsibility for the environmental transition. In response, green bonds have become increasingly popular. The key difference between a green and conventional bond is that the green bond is issued with the specific purpose of financing green projects. However, investors are still unsure about the financial performance of green bonds compared to conventional bonds, as the costs of issuing them may impact profitability and economic benefits. Purpose: This report examines how the premium on green corporate bonds, i.e., greenium, evolves over time. The main objective is to assess the performance of green bonds compared to conventional bonds in terms of yield to maturity and the impact of a bond’s green label. To gain a thorough understanding of the development of greenium over time, it is important to examine the factors that influence the yield differences between green and conventional bonds. This analysis of the existence and evolution of greenium and its driving forces can offer valuable insights to investors interested in sustainable finance and green instruments. Method: This study analyzed 267 green corporate bonds and 3,997 conventional corporate bonds issued globally between 2015-2022. The greenium was calculated by comparing green and conventional bonds' average yield to maturity. Additionally, three OLS regressions were conducted to assess the impact of a bond's green label and factors driving the yield to maturity of both green and conventional bonds, respectively. The regressions included control variables such as green label, issuer rating, time to maturity, seniority, and local currency. Conclusion: After analyzing the results, we found that conventional bonds performed better in yields than green bonds over the entire sample. However, in specific individual years, the green bonds outperformed the conventional bonds, indicating that the greenium is not negative each year separately. Regardless, conventional bonds generate higher yields over the whole sample period, implying that greenium exists. The green label does not significantly influence the variance of bond returns in all time periods, suggesting that investors' preference for environmentally friendly bonds is inconsistent across the entire sample. Additionally, the determining factors for conventional bonds are more predictable than for green bonds, and the future events of green bonds can be challenging to forecast due to the larger variation in the effects on yield to maturity.

Gestiegene mediale Aufmerksamkeit, gesellschaftliche Umbrüche und Druck durch die Regulatorik – das Thema Nachhaltigkeit hat in den letzten Jahren auch abseits weltweiter Klimabewegungen starken Aufschwung erlebt. Da das Finanzwesen eine Schlüsselrolle beim Umbau der Realwirtschaft zu mehr Nachhaltigkeit spielt, machte die EU ambitionierte Pläne zu dessen Umgestaltung. Sie veröffentlichte im März 2018 einen Aktionsplan, der die Umlenkung der Kapitalflüsse zu mehr Nachhaltigkeit vorsieht. Unzählige Publikationen beschäftigen sich seither mit den aktuellen Entwicklungen. Herauskristallisiert hat sich dabei vielerorts die Frage nach der Praxistauglichkeit des Maßnahmenkataloges. In der folgenden Arbeit wird untersucht, wie eng das regulatorische Korsett der EU-Gesetzgebung für die Unternehmen ist und welche Ziele damit verfolgt werden. Da die Maßnahmen alle Sektoren und Wirtschaftszweige in unterschiedlichem Ausmaß betreffen, soll zudem beantwortet werden, ob die EU in ihrem Handeln das richtige Maß wählt und was damit für die Finanzwirtschaft in den nächsten Jahren einhergeht. Dieses Vorgehen unterstützend, soll beginnend kurz dargelegt werden, welche Bedeutung Nachhaltigkeit für die Finanzbranche besitzt. Neben der Definition des Nachhaltigkeits-Begriffs selbst, werden zu dieser Einschätzung verschiedene Studien zum Status quo und etablierte Initiativen vorgestellt. Folgend wird das Thema aus politischer Sicht betrachtet, da legislative Entscheidungen auf Grund ihrer Verbindlichkeit hohe Durchschlagskraft besitzen und die EU so ihren Aktionsplan zu Sustainable Finance verwirklichen will. Im Zuge dessen werden einige elementare Bestandteile näher erläutert. Die anschließende kritische Würdigung geht auf das Zusammenspiel der einzelnen Maßnahmen, Bedingungen für deren Wirksamkeit sowie die folgenden Auswirkungen auf die Ökonomie und internationale Zusammenarbeit ein. Anschließend an einen kurzen Ausblick in die Zukunft, bewertet ein zusammenfassendes Resümee die Auswirkungen der Initiative für die Finanzindustrie.:1. Einleitung 2. Bedeutung der Nachhaltigkeit für die Finanzbranche 2.1. Nachhaltigkeitsdimensionen im Finanzsektor 2.1.1. Ökonomischer Bereich 2.1.2. Ökologie Sicht 2.1.3. Gesellschaftliche Verantwortung 2.2. Status Quo 2.2.1. Erhebungen von „imug“ zu Banken und Nachhaltigkeit 2.2.2. Studie zur Nachhaltigkeit in der Finanzindustrie von „emotion banking“ 2.2.3. „ShareAction“-Ranking der größten Fondsgesellschaften zum nachhaltigen Anlegen 2.3. Nachhaltigkeitsinitiativen 2.3.1. National 2.3.1.1. Das „Green and Sustainable Finance Cluster Germany“ 2.3.1.2. Die „Stiftung 2°“ 2.3.2. International 2.3.2.1. Sustainable Development Goals der Agenda 2030 2.3.2.2. High-Level Expert Group on Sustainable Finance 3. Die Europäische Union positioniert sich 3.1. Das Pariser Klimaabkommen 3.2. Der EU-Aktionsplan „Financing Sustainable Growth” 3.2.1. Die zehn Bereiche der Initiative 3.2.2. Technical Expert Group on Sustainable Finance 4. Ausgewählte Bestandteile EU-Aktionsplans 4.1. Die Taxonomie als Kernstück 4.1.1. Anwendungsbereich 4.1.2. Zeitplan 4.2. Offenlegung von Nachhaltigkeitsinformationen 4.2.1. CSR-Reporting 4.2.2. Transparenzverordnung 4.2.2.1. Entstandene Verpflichtungen 4.2.2.2. Bezug zur Taxonomie 4.3. Anlageberatung 4.4. Standards und Labels 4.4.1. Der Green Bond Standard 4.4.2. Das Ecolabel 5. Kritische Würdigung 5.1. Zusammenspiel der Maßnahmen 5.1.1. Taxonomie 5.1.2. Offenlegung 5.1.3. Standards und Labels 5.2. Auswirkungen auf die Ökonomie 5.2.1. Sustainable Finance Agenda 5.2.2. Taxonomie 5.2.3. Offenlegung 5.2.4. Standards und Labels 5.3. Bedingungen der Wirksamkeit 5.3.1. Taxonomie 5.3.2. Offenlegung 5.3.3. Standards und Labels 5.4. Die EU-Initiative im internationalen Rahmen 6. Ausblick 7. Fazit

The last decades have seen a rapid increase of sustainable investing, also known as ESG (Environmental, Social and Governance) investing. There has also been an increasing body of academic literature devoted to whether investors can gain any financial benefits from taking ESG under consideration. Previous literature of portfolio performance in terms of risk-adjusted returns has given much of its attention to best-in-class approaches, which is a strategy that selects top performers in ESG within a sector or industry. The purpose of this study is foremost to investigate a best-effort approach to ESG investing, which is a strategy that focuses on the top improvers in ESG. The purpose is further to compare this with a best-in-class approach, since the findings from earlier studies of this strategy still are inconsistent. The region chosen to perform this study in is the Eurozone. Several theories that have implications for portfolio studies and abnormal returns are taken under consideration in relation to the study and its findings. This includes the efficient market hypothesis, the adaptive market hypothesis and modern portfolio theory. The theoretical framework also cover asset-pricing models and the notions of risk-adjusted returns. A quantitative study with a deductive approach are used to form portfolios, with a Eurozone index as the investable universe. Best-effort and best-in-class portfolios as well as difference portfolios of the two approaches are created, based on ESG data and different cut-off rates for portfolio inclusion. As for risk-adjusted performance measure, the Carhart four-factor model are used. The overall results are mostly insignificant findings in terms of abnormal returns. However, three best-effort portfolios based on the top ESG improvers show significant positive abnormal returns. These findings are strongest for the environmental and social factor. As for the best-in-class approach, only the governance portfolios provided weakly significant results in terms of abnormal returns. Further, the study is not able to significantly distinguish between a best-effort and a best-in-class approach when it comes to risk-adjusted performance. The exception is the environmental factor based on the top performers in each approach, where the best-effort portfolio outperforms the best-in-class portfolio. Finally, none of the portfolios provided significant negative risk-adjusted returns. This can at least be considered as good news for ESG investing, since it indicates that investors do not have to sacrifice risk-adjusted returns in order to invest in a more sustainable way.

This qualitative research aims to explore what different faculty-member at different Swedish and British Universities think about the role of sustainability in the finance industry and education. The investigation is mainly focused on education part of finance. Majority of participants are actively involved in determining the course contents that they teach which influence the teaching environment for students and how they are prepared for their future career. As a whole, this thesis sheds a light on how faculty-members are involved in integrating sustainability in their teaching to be able to influence finance students. In order to justify the need for sustainability emphasis in the academic finance and the finance industry, relevant examples and explanations have been provided to support the idea. One of main highlights of this thesis is that personal values and ethics are the determinants of the understanding of the concept of sustainability. Hence, it has been observed that there is a lack of sustainability understanding and integration in the finance education system as well as a lack of emphasis on personal ethics in universities that are subject to this research.

In this thesis the existence of the yield premium of green bonds is investigated. This paper complies with the instructions that were used in the analysis run by Zerbib(2018). The results of the fixed-effect panel regression confirm the hyphotesis on which our paper is based on. We found a nagative premium: the yield of the conventional bond is higher than the yield of the green bond. Furthermore, this paper examines how the defintion of the greenness of the bond is specified by various institutions and experts.

Green bonds are a type of bonds that are designated for investment projects that have a positive effect on the environment. Such projects could be preventing climate change by reducing emissions of greenhouse gases, increasing energy-efficiency, or improving waste management. Green bonds have risen considerably in issued volume in recent years. Sweden has been one of the forerunners in this development and the interest towards these products seems to be high among individual Swedish investors. Initially, investors in green bonds have been mainly financial institutions, but there are an increasing number of mutual funds, which are aimed for retail banking customers as well. Previous research in socially responsible investing has not paid attention to green bonds from the perspective of the private, individual investor. This study is aimed to study potential individual green bond investors in Sweden. The purpose of this study was to answer the research question of who the typical Swedish green bond investors are, based on demographic characters. As research sub-questions, the thesis also answered questions regarding perceived risk and return on green bonds, and the effect of environmental attitude and behaviour on potential green bond investments. The study was carried out as an Internet survey by means of a questionnaire directed to Swedish investors. In total, 66 respondents answered the survey, which was analysed by bivariate and multivariate methods. Among the demographic factors, two were found statistically significant, age, and parenthood. In this sample younger investors (age less than 39), were found to prefer investing in green bonds, compared to older investors. Secondly, the fact of being a non-parent turned out to be a distinctive feature of current and potential investors in green bonds. The results regarding the first research sub-question, showed that the individual investors do not perceive green bonds to be more or less risky or give more or less return than comparable conventional bonds. The second research sub-question regarding environmental attitude and behaviour, showed a significant difference between those who showed a strong pro-environmental behaviour, as opposed to those who showed a weaker pro-environmental behaviour. The conclusion about the influence of environmental attitudes was that it did not have an effect on potential green bond investments.

This study addresses the green bond market, a young and upcoming market that has received increasing attention in recent years. Academic literature in the field is limited, therefore theaim of this study is to identify investors’ main barriers and motives behind green bondinvestments. In order to examine Swedish fund companies’ requirements to invest in greenbonds, questionnaire responses were linked to interviews. The overall result shows the importance of financial incentives in investment decisions. In terms of market barriers, the low return of green bonds was the main reason that investments were restrained. It has been stated that green bonds are issued at a premium due to an additional reporting related administrative cost for the issuers. Another defined limit was the concern for issuers not fulfilling their 'green' obligation. The main motive behind green bond investments was to invest in a sustainable environment followed by the possibility to gain a combined financial and environmental return. In addition to the financial attributes, investors find a utility function in the green bonds that account for the premium price that these investors seem to accept. Furthermore, social norms are shown to influence the investment decision to a lesser extent.

ESG ratings have become a recognised sustainability performance measurement throughout the world. The Nordic countries Sweden, Finland, Denmark, and Norway are ranked top four in the world when it comes to ESG ratings. However, do investors in these countries recognise the sustainability performance of the firms in their investment decisions? The purpose of this study was to see if Nordic investors value ESG factors, by testing for a relationship between high ESG ratings and corporate financial performance. To be able to fulfil this purpose, several multiple regression models were conducted on data for a time-span between 2007-2017 on 108 firm observations and 995 firm-year observations. Corporate financial performance was represented by the dependent variables Tobin’s Q and Return on Assets as measurements for market and accounting performance respectively. The results showed a significant positive relationship between several ESG ratings and market performance, while no significantly positive, nor negative, relationship could be found between accounting performance and ESG ratings. Based on the results from the tests, conclusions were drawn that Nordic investors do value ESG ratings when choosing their investments, indicating that companies can benefit from having good sustainability policies. This thesis challenges the classical view of profit maximisation being the ultimate interest of shareholders, as it shows a positive relationship between ESG and financial market performance. The results indicate that investors take more factors into consideration in their investment decisions than only financial accounting returns. Therefore, conclusions have been made that the Stakeholder theory better explains value creation than the Shareholder theory does. This because the Stakeholder theory emphasises that firms maximise value by taking all stakeholders affected by their business cycle into account, not only the shareholders. Furthermore, based on the results, this thesis concludes that Nordic investors’ interests are in line with the society’s interests as they do value ESG ratings when investing. No previous study on the topic has been conducted on the Nordic market, thus this study fills a research gap on the relationship between financial performance and corporate sustainability.

Background: The term Environmental, Social, and Governance (ESG) is a relatively new concept within the financial industry. However, there are a couple of issues connected to the ESG score and sustainable finance. Thus, there is an ongoing conflict between creating economic value, which is the main task for managers, as well as tackling ethical issues such as ESG. Purpose: The purpose of this report is to investigate if there is a correlation between ESG scores and financial performance measures. The measures analysed are, Return on Assets (ROA), Retention Ratio (RET), Operating Cash-Flow (CF) and Debt-Equity (DE), for listed companies in Sweden and the UK. Method: To see if there is a correlation between ESG and financial performance, a Pooled OLS Regression and Fixed Effect Regression Model (FE) was used. The data was collected from the Thomson Reuters datastream, where 75 companies listed on the OMXSLCGI in Sweden and 75 companies listed on the FTSE100 in the UK, was retrieved. Conclusion: The regression results indicated a positive correlation between CF and ESG for both the FE regression and the Pooled OLS for the Swedish middle-ranked companies, as well as a positive correlation between DE and ESG for the lower-ranked Swedish companies. For the UK, no significant variables were found. Because of the limited significant results, this thesis found that there is yet no apparent correlation between the ESG score and financial performance based on the four years analyzed.