Green bonds and environmental performance: The effect of management attention

Abstract

Green bonds have attracted significant interest in the business and financial sectors, yet the environmental performance outcomes among issuing firms have been uneven. Drawing on the attention-based view framework, this study examines the role of corporate green bond issuance in directing attention to environmental issues across organizational levels. Additionally, we investigate how internal conditions, such as growth, profitability, and indebtedness, influence the translation of attention into improved environmental performance. Using a matched sample of 160 paired firms from 23 countries and nine sectors, our results emphasize the significance of both green bond intensity and internal conditions in shaping how green bonds impact environmental performance. These results contribute to the fields of sustainable finance and attention-based view theory, offering new insights into the influence of green bonds on firms' environmental performance.