In a world where sustainable investment plays an important role in aligning financial interests with broader societal and environmental goals, this thesis investigates the impact of digital literacy and sustainable literacy on financial and accounting students' ability to promote sustainable investments in Sri Lanka. The study aims to identify the most significant literacy factor influencing the promotion of sustainable investments among students and explore the relationship between digital literacy, sustainable literacy and sustainable investment practices. Through a survey-based approach, data was collected from a group of students to assess their proficiency in sustainable literacy and digital literacy, as well as their attitudes towards sustainable investing. The findings reveal a moderate level of sustainable literacy and a relatively higher level of digital literacy among the students, with significant positive relationships between sustainable investing and both literacy types. Regression analysis indicates that sustainable literacy emerges as the most influential factor in promoting sustainable investments among financial and accounting students. The study underscores the importance of knowledge and awareness in driving sustainable investment behavior and offers insights for curriculum development to equip future financial professionals with the necessary skills for sustainable finance. The research contributes to the discussions on sustainable finance education and highlights the critical role of literacy skills in promoting sustainable investment practices among students in Sri Lanka.

The EU Taxonomy Regulation[1] (“EU Taxonomy”) is a relatively new classification system for determining what economic activities are considered sustainable. By creating a common language between investors, issuers, and policymakers, the regulation aims to increase transparency and help investors assess whether investments meet robust environmental standards. This thesis aims to investigate how the EU Taxonomy, as a legal instrument, aims to serve its legislative objective and secondly identify potential challenges of the regulation.  Findings indicate that the regulation can create an adequate commonly held classification system as long as the technical criteria for each sector keep up with new scientific discoveries and technological advancements. A regulation to develop uniform understanding across the EU and delegated acts to amend the legislation seems like the most appropriate legal instrument. Areas for improvement concern revising the scope of whom it applies, and this process has begun with the proposal of the Corporate Sustainability Reporting Directive (CSRD). Other areas for improvement concerns the political nature of what sectors should be included in the taxonomy, for instance, whether nuclear energy and gas should be deemed sustainable or not. The taxonomy may strive to be a neutral classification system; however, member states’ economic incentives affect what is included.  Finally, this thesis concludes that it is too early to predict the taxonomy’s breakthrough. In theory, it is a significant idea. Still, we can only know with time whether we have reached a more common understanding, transparency and eventually have facilitated a transition through this regulation.  [1] Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment and amending regulation (EU) 2019/288.

Environmental, Social and Governance (ESG) integration in financial activities is a crucial topic that is gaining importance in financial markets. During the years, many studies have been conducted about Initial Public Offering (IPO) and underpricing since they are fundamental aspects of firms’ lifecycle. Nevertheless, none of these studies have appropriately related firms’ ESG characteristics to IPO underpricing. In order to fill this knowledge gap, this thesis’s purpose is to investigate whether the ESG factors of a firm have effects on its IPO underpricing in the U.S stock market. The U.S has been chosen as it is the biggest stock market in the world and because of the quality and reliability of the data available for this country.  A quantitative study is applied to investigate the relationship between ESG characteristics of the firms and the level of underpricing. First, to obtain the measurement of the ESG level of the pre-IPO firms, we have conducted two textual analysis of IPO prospectus, namely, term frequency and sentiment analysis. These indicators aim to show the disclosure level of ESG factors and whenever ESG is perceived negatively or positively by the market. Successively, the multiple regression is performed for each ESG indicator to find which measures have the analytical abilities to explain IPO underpricing. Based on the multiple regression results, we can conclude that the frequency of environmental & governance terms occurred in IPO prospectus, the negative tone, and the overall sentiment of the environmental context are significantly explaining IPO underpricing. These results have given meaningful answers for our research. The market does not perceive the social factors of a firm in the IPO context. On the other hand, environmental and governance aspects still attract the market’s attention in different ways. The market is concerned about the disclosure level of the governance activities and whether these activities are sufficiently mentioned in the prospectus. Meanwhile, the market takes into serious consideration the environmental activities of a firm by assessing the qualities of these activities. Moreover, the market is more sensitive to the negative information about environmental content than positive information in the IPO context. The textual analysis methods applied in this thesis have some limitations. However, this study has the reliability to confirm that some companies’ ESG factors affect IPO underpricing. As a consequence, it is possible to state that the market cares about  ESG issues.

This study explores the increasingly popular government practice of issuing green bonds. By interviewing individuals involved in the development of the Swedish green government bond issued in 2020, and examining key documents, it provides an in-depth understanding of the motivations driving a government to issue a green bond. The empirical analysis shows that the Swedish government did not issue the green bond to finance green investments, but to promote the green bond market, communicate what it was already doing in terms of environmental investments, help investors attain more sustainable portfolios and strengthen the Swedish government as a bond issuer. While the political driving force behind the green government bond was the Green Party, it was strongly supported by segments of the financial sector. The main criticism came from authorities within the government itself. Even though the proponents of the green government bond shared a concern about the environment, it was not clear how this policy would ultimately contribute to the green transition. This analysis suggest that it is more appropriate to consider it as a form of industrial policy for supporting the sustainable finance industry. This is the first in-depth case study conducted on a green government bond and thus contributes to a new research topic. It also contributes to the literature on Sustainable Finance and Investment and green bonds more generally. Furthermore, it contributes to research on government debt policy and the political economy of the green transition.

The aim with this thesis is to investigate whether increased capital flows to ESG screened indexes create higher price-to-earnings (P/E) ratios and momentum in the included stocks during the chosen time period of three years, from 2018 to 2020. The thesis will evaluate the capital flows to ESG indexes and compare both performance and P/E ratios between those and their corresponding Mother indexes. The study will also look at the development of capital flows, performance and P/E ratios separately in the four chosen geographical indexes; Global, Europe, US and Emerging Markets. The theoretical framework goes through four relevant subjects for this study; passive investing, ESG, momentum and the P/E ratio. The study has shown that the capital flows in all four ESG indexes increased during the chosen time period. Moreover, it could be proven that three out of four ESG indexes outperformed their Mother indexes, namely, Global, Europe and Emerging Markets. In the U.S. the Mother index outperformed the ESG index. Three out of four geographical indexes also had a higher increase in the average P/E ratio than their mother indexes. Here, the Global market stood out as the one that had a lower increase in P/E ratio than its Mother index. Lastly, regression analyses were made to see the relationship between the variables capital flows, average P/E ratios in the indexes and the performance of the indexes. The study showed significantly that capital flows is the explanatory variable for the increased P/E ratios on the European ESG index. However, for the other indexes no significant correlation could be proved. This led to an interesting discussion and conclusion, and also left us with a question mark. What is the reason behind this result on the European market, and why was it not possible to see any significant correlation on the other markets? Further research in this field is needed and some ideas are discussed in the last chapter of the thesis.

Responsible investing is a growing concept as sustainability is becoming a much more apparent problem. Thus, the EU implemented a new regulation in 2021, the SFDR 2019/2088, to decrease information asymmetry between institutional investors and end investors regarding sustainable risks associated with funds’ investments. This thesis aims to study whether Swedish mutual funds are greenwashing in terms of funds that are classified as Article 9 funds and invest in firms with low ESG scores. I find that greenwashing occurs among some Swedish mutual funds classified as Article 9 funds, urging further actions to be taken by scholars, practitioners, and regulators given the complexity of the studied research field.

[pt] Títulos verdes são instrumentos para financiamento de ativos e projetos com benefícios ambientais, cuja emissão vem se tornando comum no mercado brasileiro. Preferências não-pecuniárias de investidores pela compra desses títulos associados a impacto ambiental positivo podem se refletir em uma diferença em sua precificação em comparação com títulos convencionais, fenômeno denominado de prêmio verde (greenium). A bibliografia internacional que explora a existência de um prêmio verde e de seus determinantes ainda é variada, porém não contempla o mercado brasileiro. Este trabalho busca contribuir para a literatura ao explorar a dinâmica de precificação de títulos verdes no Brasil. Para possibilitar a comparação entre títulos verdes e títulos convencionais de características similares e isolar os efeitos do rótulo verde na precificação desses ativos, foram empregados dois métodos de pareamento, Propensity Score Matching e Coarsened Exact Matching. Considerando uma amostra de 110 títulos verdes e 227 títulos convencionais emitidos entre 2016 e 2022 pelos mesmos emissores, o resultado indica a existência de um prêmio verde de 1,92% no mercado brasileiro, porém com resultados mistos uma vez que apenas um dos métodos obteve resultado significativo. / [en] Green bonds are an important tool for financing assets and projects with positive environmental impacts and its issuance is becoming more commonplace in the Brazilian market. Non-pecuniary preferences by investors for these bonds may be reflected in a difference in its pricing when compared to conventional bonds in what has become known as greenium. The international literature exploring the existence of a greenium and its determinants has achieved mixed results, but it does not consider the Brazilian market. This dissertation aims to contribute to the literature by exploring the pricing dynamics of green bonds in Brazil. To enable the comparison between green and conventional bonds of similar characteristics and to isolate the effects of the green label in their pricing, two matching methods were employed, Propensity Score Matching and Coarsened Exact Matching. With a sample of 110 green bonds and 227 conventional bonds issued between 2016 and 2022 by the same issuers, the result indicates the existence of a greenium of 1.92% in the Brazilian market, but with mixed results since only one of the methods is significant.

This research analyzes the motives and future of the Nordic green bond market from an underwriter perspective. Threefold motives for being active in the Nordic green bond market are found. There are monetary gains, corporate social responsibility, and an opportunity to receive and maintain legitimacy. Several important factors for the future of the Nordic green bond market are identified. The EU Taxonomy will have a major impact on this market, and is the most important factor for the future of it. Further, sustainability-linked bonds enable the transition of various sectors towards sustainability and are an important factor for the development of the Nordic bond market in general. Experts that possess roles within green bond underwriting and green bond investing have been interviewed. Stakeholder theory, corporate social responsibility and legitimacy theory have been implemented in this research with the aim of analyzing the motives and future of the Nordic green bond market. By doing that, this research contributes to a broader theoretical discussion in the area of sustainable finance.

In response to The Paris Agreement, all aspects of society are committing to transit to a low-carbon future. The real estate industry, which is responsible for a large portion of greenhouse gas emissions, plays a pivotal role in achieving this temperature goal. In the area of sustainable finance, green bonds are considered one of the most prominent financial innovations to channel funds into green projects. The green bonds market is also expanding with rapid growth. In this thesis, we investigate whether green bonds can be served as lower-cost financial instruments for real estate companies to raise capital for environmental or climate-friendly projects. We used propensity score matching to evaluate the green label effect on green bonds issued by real estate companies in the primary market at the international level. We find that green bonds issued by real estate companies have on average lower yields of around 10 basis points. The finding indicates that when issuing green bonds, real estate companies can benefit from a lower cost compared to issuing conventional bonds. We also perform analysis on subsamples divided by real estate company types. The empirical results show that the real estate investment trust can issue green bonds at a lower cost of about 11 basis points. Our findings suggest that green bonds can be used as a lower-cost financial instrument for companies in the real estate sector for decarbonizing actions. / För att leva upp till Parisavtalet förbinder sig alla sektorer i samhället att ställa om till en koldioxidsnål framtid. Fastighetsbranschen, som står för en stor del av växthusgaserna, spelar en avgörande roll för att uppnå klimatmålen. När det gäller hållbar finansiering anses gröna obligationer vara en av de mest framträdande finansiella innovationerna för att kanalisera medel till hållbara projekt. Den gröna obligationsmarknaden expanderar också i snabb takt. I denna avhandling undersöker vi om gröna obligationer kan fungera som billigare finansiella instrument för fastighetsbolag när de behöver skaffa kapital till miljö- eller klimatvänliga projekt. Vi använder metoden Propensity Score Matching för att utvärdera om det finns en premie när fastighetsbolag på internationell nivå emittera gröna obligationer på primärmarknaden. Vi finner att gröna obligationer utgivna av fastighetsbolag i genomsnitt har lägre avkastning med cirka 10 räntepunkter. Resultatet indikerar att fastighetsbolag vid emission av gröna obligationer kan dra nytta av en lägre kostnad jämfört med att emittera traditionella obligationer. Vi utför också analyser på undergrupper fördelade utifrån fastighetsbolagstyper. De empiriska resultaten visar att fastighetsinvesteringsfonder kan emittera gröna obligationer till en lägre kostnad på cirka 11 räntepunkter. Våra resultat tyder på att gröna obligationer kan användas som ett billigare finansiellt instrument för företag inom fastighetssektorn för att minska koldioxidutsläppen.

Bakgrund: Med anledning av den globala uppvärmningen behövs en omställning till en cirkulär ekonomi. Svenska fastigheter står för en stor del av samhällets energianvändning men har också genomgått en betydande energieffektivisering de senaste decennierna. Syfte: Studiens huvudsyfte var att svara på frågeställningen om det fanns ett samband mellan koldioxidprestanda och finansiell lönsamhet inom urvalsgruppen svenska fastighetsverksamheter mellan åren 2016 och 2020. Syftet var också att undersöka om koldioxidskatten hade ett samband med koldioxidprestanda. Metod: Data på koldioxidprestanda inhämtades manuellt från företagens hållbarhetsrapporter. Koldioxidprestanda uttrycktes som koldioxidintensitet. Finansiell lönsamhet uttrycktes genom fem olika nyckeltal: avkastning på eget kapital, avkastning på totalt kapital, EBITAD-marginal, rörelsemarginal och vinstmarginal. Sambanden analyserades med olika linjära regressionsmodeller för paneldata.Resultat: Resultaten visade på en signifikant negativ association mellan högre lönsamhet och lägre koldioxidintensitet. Resultaten var starkast för lönsamhetsmåtten avkastning på eget kapital, avkastning på totalt kapital, rörelsemarginal och vinstmarginal (p<0,05). Det fanns också ett signifikant samband mellan högre koldioxidskatt och lägre koldioxidintensitet. Slutsats: Det finns ett samband mellan högre lönsamhet och bättre koldioxidprestanda inom svenska fastighetsbranschen. Slutsatsen är också att lönsammare företag hade en lägre koldioxidintensitet. Slutligen så har en högre koldioxidskatt ett samband med bättre koldioxidprestanda. / Background: Due to global warming, a shift to a circular economy is needed. Swedish properties account for a large part of society's energy use, but have also undergone significant energy efficiency improvements in recent decades. Aim: The main purpose of this study was to investigate the relationship between carbon performance and financial profitability within the sample group Swedish real estate companies between the years 2016 and 2020. The purpose was also to investigate a possible relationship between carbon tax and carbon performance. Method: Data on carbon performance were obtained manually from companies' environmental disclosure. Carbon performance was expressed as carbon intensity. Financial profitability was expressed through five different key ratios: return on equity, return on assets, EBITAD margin, operating margin, and profit margin. The relationships were analyzed with different linear regression models for panel data.Results: The results showed a significant negative association between higher profitability and lower carbon intensity. The results were strongest for the profitability measures return on equity, return on assets, operating margin and profit margin (p<0.05). There was also a significant association between higher carbon taxes and lower carbon intensity. Conclusion: There is a relationship between higher profitability and better carbon performance in the Swedish real estate industry. Furthermore, companies with higher profitability have lower carbon intensity. Finally, a higher carbon tax is associated with better carbon performance.