Ra­pid dec­ar­bo­niza­tion requi­res mas­si­ve ca­pi­tal flows into sustai­nab­le pro­jects. But what re­al­ly un­lo­cks gre­en fi­nan­ce?

Green bonds are a key instrument to fund sustainable projects, but for many firms, issuing green bonds is not an obvious choice due to added costs, limited flexibility in the use of such capital, and limited pricing advantages.

A study by CBS Professor Tanusree Jain and colleagues shows that boards play a critical role in unlocking green finance. Firms whose directors are better connected to prior green bond issuers are significantly more likely to issue green bonds themselves. 

They suggest that director networks likely reduce uncertainty by transmitting credible information about green bond outcomes and by re-inforcing reputational norms around environmental commitments. 

In a nutshell : 𝘛𝘩𝘦 𝘨𝘳𝘦𝘦𝘯 𝘵𝘳𝘢𝘯𝘴𝘪𝘵𝘪𝘰𝘯 𝘪𝘴 𝘯𝘰𝘵 𝘥𝘳𝘪𝘷𝘦𝘯 𝘣𝘺 𝘱𝘳𝘪𝘤𝘦𝘴 𝘢𝘭𝘰𝘯𝘦. 𝘚𝘰𝘤𝘪𝘢𝘭 𝘤𝘢𝘱𝘪𝘵𝘢𝘭 𝘢𝘵 𝘵𝘩𝘦 𝘣𝘰𝘢𝘳𝘥 𝘭𝘦𝘷𝘦𝘭 𝘩𝘦𝘭𝘱𝘴 𝘮𝘰𝘣𝘪𝘭𝘪𝘻𝘦 𝘤𝘢𝘱𝘪𝘵𝘢𝘭 𝘵𝘰𝘸𝘢𝘳𝘥 𝘴𝘶𝘴𝘵𝘢𝘪𝘯𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘢𝘵 𝘴𝘤𝘢𝘭𝘦.

Read more here: https://onlinelibrary.wiley.com/doi/10.1111/corg.70022