Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299411 
Year of Publication: 
2024
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-1577
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
This paper explores a granular database from the Inter-American Development Bank (IDB) Green Bond Transparency Platform covering the issuance of 430 corporate and sovereign Environmental, Social, and Governance (ESG) bonds in Latin America and the Caribbean (LAC) that are outstanding in international markets. The goal was to investigate how the creation of a sovereign ESG reference yield curve can boost the private ESG bond market. Using a difference-in-differences (DID) approach, we empirically estimate that the creation of a sovereign ESG reference curve roughly leads to a 60 percent increase in the volume of corporate bond issuances and a 25 percent increase in the number of ESG corporate bond issuances in the external markets after three years. On the mechanisms, we argue that the sovereign ESG reference yield curve works as a benchmark for private sector ESG bond issuers by providing a standard against which the performance of ESG bonds can be measured.
Subjects: 
ESG
thematic bond
green
social
sustainability
sustainability-linked bond
debt capital markets
sovereign debt
LAC
corporate sector
international markets
JEL: 
H63
E43
R50
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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