Certification against greenwashing in nascent bond markets: lessons from African ESG bonds

Mu a indwa, Samuel; Schä e , Do o hea; S ephan, And eas
A icle — Published Ve sion
Ce i ica ion agains g eenwashing in nascen bond
ma ke s: lessons om A ican ESG bonds
Eu asian Economic Re iew
P o ided in Coope a ion wi h:
Sp inge Na u e
Sugges ed Ci a ion: Mu a indwa, Samuel; Schä e , Do o hea; S ephan, And eas (2024) : Ce i ica ion
agains g eenwashing in nascen bond ma ke s: lessons om A ican ESG bonds, Eu asian
Economic Re iew, ISSN 2147-429X, Sp inge In e na ional Publishing, Cham, Vol. 14, Iss. 1, pp.
149-173,
h ps://doi.o g/10.1007/s40822-023-00257-5
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Eu asian Economic Re iew (2024) 14:149–173
h ps://doi.o g/10.1007/s40822-023-00257-5
1 3
ORIGINAL PAPER
Ce i ica ion agains g eenwashing innascen bond
ma ke s: lessons omA ican ESG bonds
SamuelMu a indwa1· Do o heaSchä e 2,3,5· And easS ephan4
Recei ed: 15 Sep embe 2023 / Re ised: 9 Decembe 2023 / Accep ed: 19 Decembe 2023 /
Published online: 16 Feb ua y 2024
© The Au ho (s) 2024
Abs ac
A ica is one o he mos ulne able con inen s o clima e change. Clima e and sus-
ainabili y-linked bonds can p o ide unding o A ican go e nmen s and co po a-
ions o p ojec s ha help o mi iga e clima e change, comba biodi e si y loss, and
os e sus ainable de elopmen . Howe e , less han 0.3% o he global en i onmen-
al, social, go e nance (ESG) bond issuance olume is de o ed o p ojec s in A ica.
Based on he en i e uni e se o 107 A ican ESG bonds om 42 go e nmen al and
co po a e issue s o e he pe iod 2010–2023, his pape es ablishes ha ESG bonds
p o ide bene i s o bo h issue s and in es o s in e ms o lowe sp eads and ola il-
i y. Ou econome ic esul s highligh ha g eenwashing is a alid conce n o in es-
o s in A ican ESG bonds and ce i ica ion o ESG bonds makes a di e ence is-
à- is he sel -labeling o g een bonds. Non-ce i ied ESG bonds do no o e simila
bene i s compa ed o ce i ied ones. G een mac o- inancial policy and sui able egu-
la ion o p e en g eenwashing can os e A ican ESG-bond ma ke s.
Keywo ds A ica· Sus ainable de elopmen · ESG bonds· G eenium
Ma hema ics Subjec Classi ica ion G12· G28· K32· Q56
* And eas S ephan
[email p o ec ed]
Samuel Mu a indwa
smu a [email p o ec ed]
Do o hea Schä e
dschae e @diw.de
1 Uni e si y o Rwanda, Kigali, Rwanda
2 DIW Be lin, Be lin, Ge many
3 Jönköping Uni e si y, Jönköping, Sweden
4 Linnaeus Uni e si y, Växjö, Sweden
5 IAW, Uni e si ä B emen, B emen, Ge many
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Eu asian Economic Re iew (2024) 14:149–173
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1 In oduc ion
A ica is one o he mos ulne able con inen s conce ning clima e change. Al hough
A ica emi s li le g eenhouse gas compa ed o he de eloped pa s o he wo ld, he
con inen al eady expe iences ising empe a u es and sea le els as well as hea y
ain alls abo e global a e ages. This has led o na u al disas e s ha h ea en ag i-
cul u e and in as uc u es, cause en i onmen al damage and biodi e si y loss, and
inc ease mo ali y and s a a ion (Taghizadeh-Hesa y e al., 2022; Tyson, 2021).
Clima e o , mo e b oadly, g een bonds a e inancial secu i ies ha a e issued wi h
he goal ha he p oceeds a e used o inance clima e ini ia i es and include p ojec s
ela ed o enewable ene gy and ene gy e iciency, biodi e si y and o es y, as well
as clean anspo a ion (Chiesa & Ba ua, 2019; Flamme , 2021; Bake e al., 2018).1
P e ious s udies on g een bond ma ke s and clima e inancing in A ica p o ide
gene al e idence and ends (A ul-Koomson, 2015; Ngwenya & Sima ele, 2020;
Taghizadeh-Hesa y e al., 2021; Tyson, 2021), bu none o hese s udies examine he
p icing o he b oade class o ESG bonds in A ica.
The e is global consensus ha much mo e inancial esou ces om he p i a e
sec o will ha e o be mobilized o mi iga e clima e change. The ma ke s o en i-
onmen al, social, and go e nance bonds and he commi men s om long-ho izon
asse owne s o ESG in eg a ion as an in es men s a egy con inue o g ow (Ped-
e sen e al., 2021). F om a mac o-policy pe spec i e ocusing on eme ging ma ke s,
i is i al o know why clima e bonds a e a ac i e ins umen s o in es o s and
how hey could help mobilize u gen ly needed in es men s in clima e p o ec ion
ini ia i es.
This pape add esses his gap and complemen s ecen in e na ional s udies on
g een bond p icing (Bake e al., 2018; Be elli e al., 2021; Wang e al., 2020; Ze -
bib, 2019). We con ibu e o his e y young, apidly g owing, bu s ill inconclusi e
li e a u e by aking no only g een bu he b oade class o ESG bonds in o accoun .
Using Thomson Reu e s Re ini i and Da as eam da abases, we shed ligh on he
nascen ESG bond ma ke s in A ican coun ies and p o ide no el empi ical e i-
dence on he p icing o A ican ESG bonds.
Be ween 2003 and 2013, he G een Clima e Fund (GCF) commi ed USD 3.5 bil-
lion o 492 clima e p ojec s in A ica (A ul-Koomson, 2015; Du u & Nyong, 2016).
Abou 97% o hese unds s emmed om mul ila e al sou ces—pa icula ly he A i-
can De elopmen Bank (A DB). The emaining unds we e sou ced as concessional
loans o suppo clima e- ela ed p ojec s. Gi en limi ed and sh inking go e nmen
budge s, o he s akeholde s will ha e o complemen go e nmen s in inancing hese
g een in es men s. Mos A ican economies a e bank-based (Allen e al., 2011; Beck
& Cull, 2013; Mu a indwa e al., 2020, 2021), which means banks a e he main p o-
ide s o inance o he public and p i a e sec o s and could be a po en ial sou ce
o inancing g een in es men s o clima e change mi iga ion. Despi e ha , inan-
cial ins i u ions ha e no been ac i e in inancing g eene in es men s in A ica. Ng
1 N sama e al. (2021) p o ide a ypology o g een bonds. Dema y and Neligan (2018) emphasize ha
hese bonds a e mo e anspa en compa ed o con en ional bonds in he way hei p oceeds a e used.
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Eu asian Economic Re iew (2024) 14:149–173
and Tao (2016) show ha g een ene gy in es men s a e in mos cases unde aken
by new, young i ms wi h highe opaci y ha ing no s ong ack eco ds and pub-
lic in o ma ion, and which inancial ins i u ions pe cei e as less c edi -wo hy com-
pa ed o es ablished con en ional ene gy p ojec s. Such in o ma ion asymme ies
may lowe he chances o such i ms o access necessa y inancing om con en-
ional inancial ins i u ions.
In such economies, al e na i e inancing h ough inancial ma ke s could be a
solu ion o hese inancing challenges. Howe e , such ma ke s a e nonexis en in
mos A ican coun ies. Only a ew A ican economies ha e de eloped inancial
ma ke s ha p o ide su icien al e na i e inancing o g een p ojec s. Gi en he di -
icul ies o mobilizing capi al om con en ional banks and he public sec o , he
cu en s udy analyzes a b oad class o A ican ESG bonds, which encompasses cli-
ma e bonds bu also sus ainabili y-linked bonds and e en sel -labeled g een bonds.
An ESG bond is de ined as ha ing inancial and/o s uc u al cha ac e is ics ha a e
aligned wi h a leas one o he h ee ESG pilla s. The e o e, his de ini ion includes
p ojec -based ypes o bonds, such as g een and social bonds, and a ge -based ypes
o bonds, such as sus ainabili y-linked bonds (SLBs).2
Fo in es o s, ESG bonds may hedge agains di e en ypes o isk including geo-
poli ical, economic, and clima e-policy isks (Chop a & Meh a, 2023; Dong e al.,
2022; Kanamu a, 2021). Fu he mo e, g een and social bonds end o be sold a a
p emium ela i e o hei con en ional coun e pa s (see, o ins ance, Ca amichael
& Rapp, 2022; Lö le e al., 2021). This p emium implies ha he bond yield is
lowe han o compa able bonds, which is an ad an age o issue s, p o iding hem
wi h a lowe cos o capi al.
The indings o Gao and Schmi mann (2022) indica e ha s ong supe ision and
egula ions, like disclosu e and epo ing equi emen s, a e needed o make ESG
bond ma ke s wo k. In pa icula , in nascen bond ma ke s “g eenwashing” seems o
be a alid conce n o in es o s. Despi e ha , he g eenwashing isk is a ely high-
ligh ed in quan i a i e in es iga ions e ol ing a ound he g een bond issuing ac i -
i y. Pe eski e al. (2023), o example, di e en ia e be ween occasional and epea ed
issuing o g een bonds. They ind i is epea ed issuance ha builds a epu a ion ha
wo ks agains in es o s’ suspicion o g eenwashing and, consequen ly, lowe s he
issue ’s cos o capi al. The A ican ESG bond ma ke is in i s ea ly s ages. I in es-
o s’ eques o being p o ec ed agains g eenwashing isk is subs an ial, ESG-bond
ce i ica ion should make a di e ence in p icing is-à- is he sel -labeling o g een
bonds. Following his hypo hesis, we s udy quan i a i ely whe he A ican ESG-
ce i ied bonds a e p iced di e en ly han sel -labeled g een bonds ìs-à- ìs con en-
ional A ican (b own) bonds.
2 Be ada e al. (2022,p. 7) use he In e na ional Capi al Ma ke Associa ion (ICMA) de ini ion o SLBs
as any ype o deb ins umen o which he inancial and/o s uc u al cha ac e is ics can a y depend-
ing on whe he he issue achie es p ede ined sus ainabili y/ESG objec i es. G een bonds a e some o
he commonly used SLB deb ins umen s.
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Eu asian Economic Re iew (2024) 14:149–173
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The emainde o his pape is o ganized as ollows. Sec ion2 desc ibes he back-
g ound and p esen s ela ed s udies. Sec ion3 explains he econome ic me hodol-
ogy. Sec ion4 p o ides a desc ip ion o esul s. Sec ion5 concludes.
2 Backg ound and ela ed s udies
A he global scale, since he i s g een bond issuance in 2007 by he Eu opean
In es men Bank, he e has been huge g ow h in he issuance o g een bonds each-
ing USD 2 illion, which is d i en by he enhanced need o in es o s o g eene
asse s (Tyson, 2021). In con as , Ma buah (2020) no es ha he g een bond ma ke
in A ica is ela i ely small and new compa ed o he es o he wo ld. Al hough
he A ican De elopmen Bank (A DB) has been pi o al in issuing clima e bonds
o A ican p ojec s (Ngwenya & Sima ele, 2020; A ul-Koomson, 2015), only e y
ew A ican co po a e, so e eign, and municipal issue s exis —cons i u ing o e all a
iny ac ion o all A ican bond issuances (Du u & Nyong, 2016).
Tolli e e al. (2021) e iew he de elopmen s and ends in g een inno a ions
and g een inance in he Asian coun ies o China, Japan, India, and Sou h Ko ea
and how hey a e linked o sus ainable economic g ow h. Mal ais and Nyk is
(2020) quali a i ely analyze he ac o s ha d i e g een bond ma ke s and he ole
o g een bonds in imp o ing sus ainabili y. Conduc ing in e iews wi h nine issue s
and nine in es o s in g een bonds in Sweden be ween 2017 and 2018, he au ho s
ind ha g een bonds a e low- isk inancial secu i ies o bo h in es o s and issu-
e s o hese ins umen s. They also ind ha he issue o g een bonds con ibu es o
sus ainabili y a ela i ely low cos s. This also igge s he demand o sus ainable
in es men .
Resea ch on ESG and, mo e speci ically, on ESG bonds is s ill nascen bu as -
g owing. I can be subdi ided in o h ee main ields3: namely, he p icing and he
e u ns/sp ead o g een bonds (which ou s udy leans on), he de e minan s o he
g een bond e u ns/sp ead, and desc ip i e s udies on he de elopmen o he g een
bonds ma ke s. Fo he A ican con inen , he la e ca ego y is mos common.
Piñei o-Chousa e  al. (2021) highligh he ac ha s udies ha e empi ically
assessed he e ec s o he label “g een” om h ee pe spec i es: ha o he in es-
o s’ (demand side), he issue s (supply-side), and bo h supply and demand. A
g owing numbe o s udies ocus on inancial e u ns. Mos documen highe - han-
expec ed inancial pe o mance and lowe isks o companies ha issue g een
bonds compa ed o con en ional bonds (K uege e al., 2020; Ha zma k & Suss-
man, 2019).
Flamme (2021) p esen s h ee main easons o g een bond issuance; i.e., sign-
aling, g eenwashing and cos -o -capi al sa ings on he issue ’s side. In he i s
a gumen , co po a e bond issuance ac s as a signal o a company’s commi men
o en i onmen al p o ec ion and en i onmen ally iendly in es o s a e mo e likely
3 See MacAskill e al. (2021) o an ex ensi e e iew o he li e a u e on g een bond p emium de e mi-
nan s.

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Eu asian Economic Re iew (2024) 14:149–173
o espond o such issuances. When g eenwashing is he mo i e, bond issue s make
misleading claims abou he company’s con ibu ion o he en i onmen du ing he
issue p ocess. Finally, g een bonds a e conside ed cheap sou ces o capi al i in es-
o s a e willing o ade inancial bene i s o social bene i s. Simila a gumen s a e
exp essed in Gilch is e al. (2021) who also s ess ha in es men s in g een p o-
jec s p o ide an insu ance hedging s a egy o en i onmen al isks and help build
a epu a ion ha inc eases co po a e social capi al. In es o s in g een bonds a e no
only d i en by ma ke e u ns bu also en i onmen al and esponsible conside a ions
(Be elli e al., 2021).
S udies examining g een bond e u ns compa ed o syn he ic con en ional bonds
a e mainly ocused on whe he g een bond issue s gain a p emium o so-called
“g eenium”4 compa ed o hei con en ional pee s in bo h p ima y and seconda y
ma ke s. Ehle s and Packe (2017) ind ha he e is a g een p emium compa ed o
con en ional bonds in he p ima y ma ke bu his di e ence changes o e ime wi h
simila pe o mance in he seconda y ma ke . Ze bib (2019) compa es he p icing o
g een and con en ional bonds by ma ching e e y g een bond wi h wo con en ional
bonds on he seconda y ma ke be ween 2013 and 2017. He s udies he wo bond
a ian s using hei ea u es, o example, coupon, colla e al, cu ency, a ings, bond
senio i y, and cha ac e . Findings om his la e s udy show a signi ican g eenium
o g een bonds when compa ed o ma ched con en ional bonds. Taghizadeh-Hesa y
e al. (2021) compa a i ely assess he e ec s o g een bond cha ac e is ics on inanc-
ing. Using da a om he Bloombe g and Clima e Bonds ini ia i e, hey assess he
e u ns o g een bonds in Asian and Paci ic coun ies and ind ha g een bonds a e
associa ed wi h highe e u ns bu also highe ola ili y.
Resea ch on he p icing o g een bonds is domina ed by US s udies. Fo ins ance,
Ka p and Mandel (2018) ma ch a la ge da ase o 1880 g een municipal bonds wi h
36,000 con en ional bonds o he same issue s in he seconda y ma ke om 2010
o 2016. Thei esul s show no g eenium un il he yea 2016 when hey iden i y a
sp ead o 23 basis poin s (bps). Using 2083 municipal g een bonds and 643,299 con-
en ional bonds issued in US p ima y ma ke s be ween 2010 and 2016, Bake e al.
(2018) iden i y a highe p emium associa ed wi h g een bonds.
Pa idge and Medda (2018) also ma ch municipal g een bonds wi h con en-
ional bonds in he US, which we e issued a he same ime, and ind a g owing
end o he g een p emium in bo h p ima y and seconda y ma ke s. Using a wo ld-
wide bond uni e se ha ma ches g een bonds wi h con en ional bonds om 2007 o
la e 2019, Lö le e al. (2021) ind ha he e is a nega i e p emium associa ed wi h
g een bonds o abou 15–20 bps compa ed o con en ional bonds in he p ima y
and seconda y ma ke . In a s udy o 121 Eu o-nomina ed g een bonds using p o-
pensi y sco e ma ching, Gian a e and Pe i (2019) de e mine a g eenium o 18 basis
poin s—wi h a highe g eenium o co po a e issue s.
Pa allel o he inc easing e idence om US issuances, he e is also a g owing
li e a u e on g een bond p icing in de eloping and eme ging ma ke s. Wang e al.
(2020) compa e p icing o con en ional and g een bonds in an eme ging economy
4 G eenium s ands o g een bond discoun in con as o p emium.
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Eu asian Economic Re iew (2024) 14:149–173
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(China) by issue ype—namely, i s - ime, co po a e social esponsibili y (CSR)
issue s, and unde w i e s. They iden i y a signi ican g een bond p emium o new
issues om CSR issue s and hose held by long- e m ins i u ional in es o s. Chiesa
and Ba ua (2019) in es iga e he de e minan s o bond size and he di e ences
among de e minan s using a 771 g een bond issuance sample in he eme ging and
non-eme ging coun ies o he pe iod 2010–2017. Thei indings show ha coupon
a es, a ings by c edi a ing agencies, colla e al, sec o o issuance, and inancial
heal h o he issue all posi i ely a ec he size o he g een bond issue, and ha
hese indings a e mo e p onounced in eme ging economies.
2.1 The de elopmen o bond ma ke s and hepo en ial o g een bonds inA ica
A ican bond ma ke s a e in a a he in an s age (Allen e al., 2011). Kodongo e al.
(2023) no e ha bond ma ke s in A ica can be conside ed illiquid, hinly aded,
and domina ed by go e nmen bond issuance. Table1 shows ha o 2022, he sha e
o A ican bonds in e ms o issuance was 0.8% whe eas he sha e in e ms o issu-
ance olume was less han 0.3%.5 While he numbe and olume o global ESG
bonds ha e inc eased since 2015, he sha e o A ican ESG bonds is declining bo h
in e ms o numbe s and issuance olume.
G een bonds a e ela i ely new inancial p oduc s in he A ican inancial ma -
ke s. The i s g een bond issuance occu ed in 2010 (Taghizadeh-Hesa y e  al.,
2021) bu mos A ican coun ies ha e no been ac i e pa icipan s in he g een bond
ma ke s. The A ican De elopmen Bank (A DB) has been a key issue o g een
bonds in Sub-Saha an A ica. Se e al A ican coun ies, such as Kenya, Mo occo,
Nige ia, and Sou h A ica, ha e also s a ed o issue so e eign g een bonds o
Table 1 Global ESG bond
issuances and A ican sha es
Sou ce: Eikon Re ini i ESG bond guide. No es: Social bonds
excluded. 2023 un il July (q2). Column (4) shows he A ican sha e
in he numbe o global ESG-bond issuances, and column (5) shows
he A ican issuance olume sha e
Yea Numbe Billion USD A ica (%) A ica (%)
2015 309 41 0.32 1.23
2016 275 94 1.45 0.74
2017 524 168 1.34 0.63
2018 683 184 1.02 0.37
2019 1178 347 1.19 0.50
2020 1514 434 0.40 0.33
2021 3026 897 0.79 0.43
2022 2613 766 0.80 0.28
2023q2 1554 522 0.45 0.17
5 These igu es a e con i med in Tyson (2021) who epo ha only 1.5% o o al global bond issuances
a e o A ican o igin. Those accoun o only abou 0.3% o he global ma ke capi aliza ion.
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Eu asian Economic Re iew (2024) 14:149–173
clima e- ela ed pu poses. Ma buah (2020,p. 11) desc ibes he s a e o he g een
bond ma ke in A ica and no es ha he A ican g een bond ma ke is ela i ely
small. By 2019, g een bond issues o aled USD 2 billion om go e nmen s, ci ies/
municipali ies and co po a e issue s (sup ana ional issues a e excluded om his ig-
u e). In o al, he e ha e been 17 g een bond issuances om Egyp , Kenya, Mau i-
ius, Mo occo, Nige ia, Seychelles and Sou h A ica.
Go e nmen and mul ila e al de elopmen banks a e dominan issue s o g een
bonds in A ica. In pa icula , he A DB emains pi o al. The A DB has been one
o he mos impo an issue s in A ica wi h abou USD 500 million g een bond
issuances since 2010 (Du u & Nyong, 2016). Mos buye s a e domes ic in es o s
who acqui e he bonds h ough p i a e placemen s o public o e ings on domes ic
exchange ma ke s. In e na ional in es o s a e e y eluc an o in es in hese bonds
because o highe pe cei ed isks ela i e o o he de eloping and eme ging econo-
mies (Tyson, 2021). Sho ma u i ies also cha ac e ize hese ma ke s. Banga (2019)
no es ha despi e he as -g owing ma ke o g een bonds in de eloped coun ies,
only a ew A ican in es o s and go e nmen s ha e non-con en ional g een bonds.
Howe e , he unds aised h ough g een bond issuance in A ica exceed he ones
om o he clima e und sou ces. Abou USD 3.4 billion has been aised om he
Clima e Funds Ini ia i e om 2002 o 2014 (Du u & Nyong, 2016).
2.2 P icing o g een bonds
Financial indus y epo s pionee ed he assessmen o p icing o g een bonds is-à-
is hei con en ional bond pee s. The Ba clays s udy by Bakshi and P eclaw (2015)
uses op ion-adjus ed sp eads o measu e p icing di e ences be ween con en ional
and g een bonds. The s udy employs c edi a ing, sp ead du a ion, and ime since
issuance as p oxies o c edi isk, liquidi y p emium, and in es men leng hs. The
esul s e eal a 17-bps p emium o g een bonds. In con as , he la e Bloombe g
s udy o Shu ey (2017) e eals a nega i e p emium, whe eas he CBI s udy o Ha -
ison (2017) iden i ies an e en highe p emium o g een bonds.
Subsequen academic li e a u e has also a emp ed o assess p icing di e ences
be ween g een and con en ional bonds, and mos o hem use ma ching me hods and
eg essions. These s udies ange om global o coun y o sub- egional. Hachenbe g
and Schie eck (2018) conduc a global s udy analyzing 63 ma ched pai s o bonds,
o e a pe iod o 6 mon hs be ween 2015 and 2016 in he seconda y ma ke . They
examine he sp ead be ween g een and simila con en ional bonds and iden i y a
nega i e p emium o 1–18 bps.
Bachele e al. (2019) compa e, on a global scale, g een and b own bonds issued
in he seconda y ma ke du ing he pe iod 2013–2017. Resul s om p open-
si y sco e ma ching combined wi h eg essions e eal bo h posi i e and nega i e
p emia o di e en in es o s. Speci ically, ins i u ional in es o s ob ained nega i e
p emia whe eas p i a e issue s ecei ed posi i e p emia compa ed o hei adi-
ional bonds’ co esponden s. Analyzing di e ences in p ices o g een and b own
bonds in he global seconda y ma ke om 2015 o 2016, Nanayakka a and Colom-
bage (2019) assess whe he in es o s a e willing o pay a p emium on g een bonds
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Eu asian Economic Re iew (2024) 14:149–173
1 3
is-à- is con en ional bonds. They conclude om hei panel eg essions ha g een
bonds we e aded a a highe sp ead o 62.7 bps. Fa ica e al. (2019) pe o m panel
da a eg essions and ind ha , compa ed o con en ional bonds, g een bonds enjoy a
p emium, pa icula ly hose ha we e issued by co po a e and sup ana ional o gani-
za ions. Be elli e al. (2021) a gue ha he li e a u e on he p icing and de e mi-
nan s o a g een p emium is-à- is con en ional bonds is as g owing bu emains
inconclusi e.
Tang and Zhang (2020) ma ch a pai o g een and con en ional bonds in a wo ld-
wide sample om 2007 and 2017. They use ma ching, di e ence-in-di e ence, and
eg ession models and employ con ol a iables o examine yield sp ead be ween
he g een and con en ional bonds. They ind ha g een bonds a e issued a a yield
discoun o 6 bps lowe han con en ional bonds om he same issue s. A wo ld-
wide s udy o bonds om 2007 o 2019 in p ima y and seconda y ma ke s, which
also ma ches con en ional and g een bonds, shows a g eenium o 15–20 bps (Lö -
le e al., 2021). The esul s also show ha g een bonds wi h la ge issue amoun s
enjoy a highe g eenium. Gian a e and Pe i (2019) use a PSM app oach ma ching
121 senio g een bonds om 2013 o 2017. Thei esul s show ha issue s gained a
g eenium o 18 bps. The g eenium was as la ge as 21 bps o co po a e issue s. Non-
co po a e issue s, such as go e nmen en i ies and municipali ies, gained mo e in
he seconda y ma ke .
Speci ic coun y s udies on he p icing o g een bonds a e also eme ging. Ze bib
(2019) uses a sample o 110 B i ish g een bonds om he seconda y ma ke o he
pe iod 2013–2017. Using ma ching and a wo-s ep eg ession app oach, he s udy
compa es he yield sp eads be ween con en ional and g een bonds. The esul s show
a nega i e p emium o 2 bps. G ea e p emia eme ge o inancial i ms and low-
a ed bonds. The esul s also indica e ha sec o issue and a ings d i e p emium.
Wulanda i e al. (2018) assess he c edi sp ead (di e ence be ween g een bond
yield and go e nmen bond yield) o 64 bonds in he UK’s seconda y ma ke du ing
he pe iod 2013–2016. Thei ixed e ec s eg ession e ealed a nega i e p emium o
69.2 bps.
In ano he s udy wi h p ima y ma ke da a, Ka p and Mandel (2018) exam-
ine US municipal g een bonds in he seconda y ma ke . Using a sample o 1880
municipal g een bonds ma ched wi h 36,000 con en ional bonds om he same
issue s om 2010 o 2016, hey examine he yield cu e o g een bonds and
ind a g eenium o 7.8 bps. La cke and Wa s (2019) s udy di e ences in p ices
be ween con en ional bonds and municipal g een bonds in he US p ima y ma -
ke om 2013 o 2018. They ind a e y small g een bond ma ke yield di e ence
o 0.45 bps and no di e ence a issue p ice o he ma ched sample. In a s udy
o he US p ima y and seconda y ma ke , Pa idge and Medda (2020) analyze
ma ched pai s o g een and con en ional bonds om 2014 o 2018. The ma ched
pai s we e simila in e ms o issuance da e, same issue , ma u i y, coupon, and
use o p oceeds. The esul s e eal a signi ican p emium o 5 bps in he second-
a y ma ke and signi ican di e ences in g eenium in he p ima y ma ke ma ches.
Os lund (2015) examines he yield sp ead be ween con en ional and g een bonds
o he same issue s in Sweden and ind no e idence o a g eenium. Ins ead, g een
bonds we e aded a a discoun compa ed o hei b own pee s. Bou (2019) uses
163
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Eu asian Economic Re iew (2024) 14:149–173
in es men holdings, whe e he second mos equen ESG-bond issue sec o is he
enewable ene gy and u ili ies sec o .
The de elopmen o ESG-bond issuance in A ica is shown in Table6. One can
no e an inc easing end in issuance equency and issuance olume ( o he yea
2023 he igu es include only he i s and second qua e s). The domicile o ESG-
bond issue s is shown in Table7. The h ee mos equen domiciles o ESG-bond
issue s a e Sou h A ica, Mau i ius and I o y Coas . The la e can be explained by
Table 8 A ican ESG bonds’
use o p oceeds
Desc ip ion o he pu pose o 107 issued A ican ESG bonds.
Sou ce: Eikon Re ini i ESG bond guide
Use o p oceeds F eq Pe cen
Access o essen ial se ices 6 5.6
Al e na i e ene gy 1 0.9
Aqua ic biodi e si y conse a ion 6 5.6
Clean anspo 14 13.1
Clima e change adap a ion 11 10.3
Comme cial pape backup 1 0.9
Eligible g een p ojec s 14 13.1
Ene gy e iciency 34 31.8
Gene al pu pose 4 3.7
G een cons uc ion/buildings 2 1.9
Land p ese a ion 1 0.9
Renewable ene gy p ojec s 9 8.4
Sus ainable de elopmen p ojec s 1 0.9
no a ailable 3 2.8
To al 107 100.0
Table 9 A ican ESG-bond
issuance amoun (in mill USD
by issuance cu ency)
Sou ce: Eikon Re ini i ESG bond guide
Issuance cu ency N Mean Sum Min Max
Aus alian dolla 6 46 277 8 96
B azilian eal 2 7.2 14 6.7 7.7
Eu o 4 702 2807 561 842
Mo occan di ham 1 14 14 14 14
Namibian dolla 2 8.1 16 3.7 13
New Zealand dolla 3 44 133 30 70
Nige ian nai a 3 18 53 14 19
No wegian k one 1 199 199 199 199
Sou h A ican and 32 39 1236 7 111
Swedish k ona 7 129 904 98 196
Swiss anc 1 174 174 174 174
U.S. dolla 45 447 20,127 15 1000
To al 107 243 25,954 3.7 1000

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Eu asian Economic Re iew (2024) 14:149–173
1 3
Table 10 Desc ip i e s a is ics o yields and op ion-adjus ed sp eads o A ican ESG and non-ESG
bonds (bond-qua e obse a ions)
n Mean sd p5 p50 p95
Non-ESG bond
Yield (%) 18,085 9.71 5.31 1.07 9.03 19.5
OAS (bps) 3,924 340.1 367.9
−
19.6 216.4 1126.7
Coupon a e (%) 18,085 7.47 4.98 0 7.61 15.6
Issuance in USD (log) 18,085 15.3 2.76 10.8 15.5 20.2
Time o edemp ion 18,085 3.17 3.33 0.19 2.36 8.10
CBI aligned g een bond
Yield (%) 468 5.58 4.38 0.38 5.07 12.0
OAS (bps) 270 323.0 265.9 6.08 306.3 785.3
Coupon a e (%) 468 4.35 3.23 0.25 4.88 10.2
Issuance in USD (log) 468 16.4 2.28 11.7 16.9 19.5
Time o edemp ion 468 3.44 2.20 0.64 3.31 7.75
CBI ce i ied g een bond
Yield (%) 235 7.11 3.44 3.27 5.80 14.7
OAS (bps) 104 472.2 275.0 208.8 357.2 1097.8
Coupon a e (%) 235 6.40 2.51 3.58 5.65 13.5
Issuance in USD (log) 235 16.2 1.53 13.1 16.8 17.5
Time o edemp ion 235 2.58 1.18 0.77 2.63 4.35
Sel -labeled g een bond
Yield (%) 73 8.33 2.60 3.74 8.66 12.2
OAS (bps) 42 405.6 188.6 99.1 402.7 693.4
Coupon a e (%) 73 7.90 3.76 4.25 6.25 14.5
Issuance in USD (log) 73 14.6 1.84 11.9 14.3 16.6
Time o edemp ion 73 3.91 1.47 2.16 3.69 6.12
Sus ainabili y bond
Yield (%) 46 6.60 2.73 2.21 6.48 10.3
OAS (bps) 27 373.6 185.2 187.5 314.9 740.3
Coupon a e (%) 46 4.95 2.53 2.75 4.95 9.41
Issuance in USD (log) 46 15.8 2.84 13.6 13.8 19.6
Time o edemp ion 46 7.70 2.12 3.35 8.40 9.79
Sus ainabili y linked bond
Yield (%) 32 8.66 1.68 5.87 8.95 11.0
OAS (bps) 1 248.4 – 248.4 248.4 248.4
Coupon a e (%) 32 10.1 0.22 9.88 9.96 10.3
Issuance in USD (log) 32 13.2 0.39 12.7 13.1 13.8
Time o edemp ion 32 2.43 0.94 0.95 2.43 4.03
To al
Yield (%) 18,939 9.56 5.30 0.99 8.95 19.4
OAS (bps) 4,368 343.0 358.8
−
14.2 236.7 1103
Coupon a e (%) 18,939 7.37 4.93 0 7.38 15.6
Issuance in USD (log) 18,939 15.3 2.74 10.8 15.6 20.1
165
1 3
Eu asian Economic Re iew (2024) 14:149–173
he p esence o he A DB, whe eas he i s is an indica ion ha ixed-income ma -
ke s in Sou h A ica a e, by a , mo e de eloped compa ed o mos o he coun ies
in A ica.
Table8 epo s esul s on he usage o p oceeds om he 107 ESG-bond issu-
ances in A ica. A big pa o he p oceeds go o ene gy e iciency, g een p ojec s
and clean anspo . Some po ion o he p oceeds (8%) also go o enewable ene gy
p ojec s. This shows he commi men o issue s o mi iga e clima e change. Fu he -
mo e, a ew bonds a e used o biodi e si y conse a ion.
Table9 epo s he cu ency o issuance o he g een bonds. In many o he issu-
ances, o eign bookmake s o manage s a e in ol ed. G een bonds’ issuance in
A ica is domina ed by a ew cu encies. A la ge po ion o he issuance is in US
dolla (in o al 20,127 million USD) ollowed by he Eu o (2,807 million USD ),
Sou h A ican Rand, and Swedish K ona. Issuances in local cu encies a e on a e -
age much smalle – o ins ance, in he Namibian dolla o Mo occan Di ham. This
shows ha one o he pu poses o issuing ESG bonds is o a ac o eign in es o s
who aim o inc ease he sha e o g een asse s in hei o al asse s.
Table 10 epo s summa y s a is ics based on a qua e ly ime se ies o he 2
dependen (yield (YTW) and sp ead (OAS)) and he 3 main independen a iables
(coupon a e, issuance olume and ime o edemp ion) by ESG-bond ype. Con-
ce ning yield, CBI-aligned bonds ha e he lowes a e age yield and a lowe OAS,
e en lowe compa ed o CBI-ce i ied bonds. Simila ly, sus ainabili y bonds ha e
a lowe yield bu highe OAS compa ed o sus ainabili y-linked bonds. These ESG
bonds ha e, in gene al, lowe yields and lowe sp eads compa ed o non-ESG bonds.
4.2 Reg ession esul s
Table11 (dependen a iable YTW ) and Table12 (dependen a iable OAS) display
he eg ession model esul s. The i s columns show he esul s o OLS es ima ions,
including se e al ixed e ec s (issue , qua e , ank senio i y, coupon class, and cu -
ency) whe eas he emaining columns show he esul s o RIF quan ile eg ession
es ima ions using a ious RIF unc ions. Column (2) displays he esul s o he
median (RIF(p50)), column (3) shows he esul s o he 5% pe cen ile, and column
(4) p oduces he esul s o he 95% pe cen ile. Column (5) epo s he esul s o he
s anda d de ia ion o he dependen a iable, which is in e p e ed as ola ili y. The
e e ence ca ego y o all models is he weigh ed a e age o all bonds.7 The es ima-
ions in Table11 a e based on qua e ly ime-se ies o 2261 bonds o e he pe iod
2015q1–2023q2 and 18,939 bond-qua e obse a ions in o al. Table12 is based
Table 10 (con inued)
n Mean sd p5 p50 p95
Time o edemp ion 18,939 3.18 3.29 0.19 2.41 8.13
7 See Rios A ila (2019).
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1 3
Table 11 Panel eg ession esul s on isk and e u n o A ican bonds, dependen a iables yield o wo s (YTW) and se e al RIF unc ions o YTW, eg ession models
wi h mul iple ixed e ec s
Dependen a iable is yield o wo s (YTW) and de i ed RIF measu es. YTW winso ized a 2.5 and 97.5% o models (1) and (5). RIF(p50) is a quan ile eg ession on
he YTW median, while RIF(p5) and RIF(p95) a e eg essions on he 5% and he 95% pe cen iles o he YTW. RIF(s d) is a eg ession on he s anda d de ia ion o YTW.
Clus e obus (bond-le el) s a is ics in pa en heses. *
p
<
0.10
, **
p
<
0.05
, ***
p
<
0.01
. Fixed e ec s included (abso bed): issue (d =41), pe iod (d =35), ank
senio i y (d =5), coupon class (d =3), and issuance cu ency (d =21). The es ima ions ha e been ca ied ou wi h he use -w i en S a a command i hd eg, see Rios-
A ila (2020)
Dep a iable: yield (%) (1)
OLS
(2)
RIF(p50)
(3)
RIF(p5)
(4)
RIF(p95)
(5)
RIF(s d)
Con en ional non-ESG bond 0.216 (0.80) 1.424*** (8.76)
−
0.291 (
−
0.56) 3.478*** (3.74) 0.897 (1.34)
Sel -labeled g een bond
−
0.0663 (
−
0.32)
−
0.224 (
−
0.39) 0.994 (0.71)
−
0.176 (
−
0.08)
−
0.936 (
−
1.49)
CBI ce i ied g een bond
−
1.422*** (
−
11.91)
−
2.024*** (
−
9.18) 0.273 (0.69)
−
1.636 (
−
0.95)
−
0.792*** (
−
3.77)
CBI aligned g een bond 0.363 (0.77)
−
0.417 (
−
1.63)
−
0.407 (
−
0.46)
−
2.308** (
−
2.02)
−
0.803 (
−
0.68)
Sus ainabili y bond 0.173 (0.62)
−
0.357 (
−
0.53) 2.615* (1.78)
−
5.816*** (
−
8.64)
−
2.010*** (
−
3.77)
Sus ainabili y linked bond
−
0.480** (
−
2.16)
−
0.562 (
−
0.79) 0.0360 (0.04)
−
3.428** (
−
2.10)
−
0.650*** (
−
3.04)
Coupon a e (%) 0.129*** (4.34) 0.0767*** (2.92)
−
0.151** (
−
2.31)
−
0.269** (
−
2.13) 0.0569** (2.11)
Issuance in USD (log) 0.147*** (3.84) 0.119*** (2.74) 0.0172 (0.15) 0.0542 (0.48)
−
0.0210 (
−
0.61)
Time o edemp ion 0.0829*** (4.08) 0.0614** (2.53) 0.249*** (3.51)
−
0.166*** (
−
2.75)
−
0.112*** (
−
6.30)
Obse a ions (bond-yea ) 18,939 18,939 18,939 18,939 18,939
Adjus ed
R2
0.816 0.633 0.509 0.320 0.461
No o bonds 2261 2261 2261 2261 2261
Sample RIF mean — 7.816 0.765 15.99 5.247
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Table 12 Panel eg ession esul s on isk and e u n o A ican bonds, dependen a iables op ion-adjus ed sp ead (OAS) and se e al RIF unc ions o OAS, eg ession
models wi h mul iple ixed e ec s
Dependen a iable is op ion-adjus ed sp ead (OAS) and de i ed RIF measu es. OAS winso ized a 2.5 and 97.5% o models (1) and (5). RIF(p50) is a quan ile eg es-
sion on he YTW median, while RIF(p5) and RIF(p95) a e eg essions o he 5% and he 95% pe cen iles o he YTW. RIF(s d) is a eg ession on he s anda d de ia ion
o YTW. Clus e obus (bond-le el) s a is ics in pa en heses. *
p
<
0.10
, **
p
<
0.05
, ***
p
<
0.01
. Fixed e ec s included (abso bed): issue (d =30), pe iod (d =35),
ank senio i y (d =1), coupon class (d =1), and issuance cu ency (d =16). The es ima ions ha e been ca ied ou wi h he use -w i en S a a command i hd eg, see
Rios-A ila (2020)
Dep a iable: OAS (bps) (1)
OLS
(2)
RIF(p50)
(3)
RIF(p5)
(4)
RIF(p95)
(5)
RIF(s d)
Con en ional non-ESG bond 43.16*** (3.49)
−
9.247 (
−
0.30) 22.15 (0.73) 267.6*** (8.09) 40.50*** (4.09)
Sel -labeled g een bond
−
223.4*** (
−
6.47)
−
77.51 (
−
1.07) 14.59 (0.13)
−
776.9*** (
−
6.03)
−
174.6*** (
−
4.86)
CBI ce i ied g een bond
−
68.44*** (
−
3.23)
−
278.5*** (
−
8.55) 61.45** (2.58)
−
510.9*** (
−
6.41)
−
195.1*** (
−
11.62)
CBI aligned g een bond
−
1.790 (
−
0.12) 167.4*** (4.30)
−
76.97* (
−
1.87) 58.90 (1.26) 52.55*** (4.27)
Sus ainabili y bond
−
13.24 (
−
0.48)
−
157.3*** (
−
3.65) 96.69*** (5.14)
−
202.8*** (
−
3.22)
−
81.50*** (
−
3.14)
Sus ainabili y linked bond
−
165.5** (
−
2.12)
−
394.1** (
−
2.11) 66.70*** (4.68)
−
708.3*** (
−
7.29)
−
207.1*** (
−
9.59)
Coupon a e (%) 36.07*** (3.13) 18.53 (1.19) 13.43* (1.93) 72.97*** (3.22) 20.91*** (3.89)
Issuance in USD (log)
−
13.86** (
−
2.46)
−
27.67*** (
−
2.77)
−
15.91** (
−
2.13) 4.722 (0.42) 10.80*** (3.23)
Time o edemp ion 2.267 (1.12)
(61.59)
1.901 (0.62)
(40.36)
−
6.463** (
−
2.11)
(
−
0.70)
−
3.232 (
−
0.81)
(90.97)
2.149 (1.61)
(88.44)
Obse a ions 4368 4368 4368 4368 4368
Adjus ed
R2
0.755 0.677 0.434 0.260 0.424
No o bonds 284 284 284 284 284
Sample RIF mean – 244.9
−
3.525 962.2 336.6
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Eu asian Economic Re iew (2024) 14:149–173
1 3
on a signi ican ly lowe numbe o bonds and only 4368 bond-qua e obse a ions
in o al. The eason is ha OAS is only a ailable o a smalle ac ion o bonds and
also mo e o en in la e qua e s whe eas i is missing o ea lie qua e s.
Table11 highligh s ha CBI-ce i ied bonds ha e a signi ican ly lowe yield
bo h in e ms o mean bu also in e ms o median compa ed o non-ESG bonds.
The es ima e indica es a di e ence o mo e han 200 bps o he a e age yield
o all bonds. CBI-ce i ied bonds also ha e lowe yield ola ili y compa ed o
hei non-ESG coun e pa s. In con as , sel -labeled g een bonds a e no signi i-
can ly di e en om non-ESG bonds in all es ed models. This implies ha he
isk o g eenwashing exis s and ha ce i ica ion is an ins umen o mi iga e his
isk. The e o e i plays an impo an ole in c ea ing bene i s o bo h issue s and
in es o s. Sus ainable and, in pa icula , sus ainabili y-linked bonds ha e lowe
yields and lowe ola ili y compa ed o con en ional bonds. Howe e , o e all he
di e ences a e smalle compa ed o CBI-ce i ied and CBI-aligned bonds. In e -
es ingly, he esul s a e signi ican o he uppe ail o he yields, whe eas he e
is less di e ence a lowe ails. This means he e ec s a e s onges o high-yield
bonds, and hus, bene i s occu o issue s o bonds wi h high yields. The con-
ol a iables ha e expec ed signs. Highe coupon a es a e co ela ed wi h highe
yields, whe eas a longe ime o edemp ion implies also highe yield ( e m s uc-
u e). The issuance olume is also posi i ely ela ed o he yield, a leas o he
mean and median.
Table12 shows he es ima ion esul s o OAS, i.e., he sp ead o e he bench-
ma k a e. The lowe he OAS, he lowe he isk p emium o he bond. O e all,
he esul s o Table12 con i m he esul s o Table11 wi h a ew sub le di e ences.
CBI-ce i ied bonds ha e a signi ican ly lowe OAS bo h a he mean and he median
(again, mo e han 200 bps) as well as lowe ola ili y (column (5)), whe eas CBI-
aligned bonds ha e a highe OAS and also highe ola ili y han con en ional bonds.
The wo ypes o sus ainabili y bonds ha e simila bene i s as CBI-aligned bonds,
whe eas sel -labeled g een bonds appea o ha e signi ican ly lowe OAS ola ili y
and also signi ican ly lowe OAS a he mean in compa ison o hei con en ional
Table 13 Robus ness es : quan ile ea men e ec (QTE) o ESG bond ype on yield
No mal-boo s ap (wi h 999 eplica ions) s a is ics in pa en heses *
p
<
0.10
, **
p
<
0.05
, ***
p
<
0.01
.
T ea men de ini ions: column (1) CBI ce i ied, column (2) CBI ce i ied o aligned, column (3) ESG
bond (all ypes). Same con ol a iables as in Tables 11 and 12. Fixed e ec s included (abso bed):
issue (d =41), pe iod (d =35), ank senio i y (d =4), coupon class (d =2), and issuance cu ency
(d =21). The es ima ions ha e been ca ied ou wi h he use -w i en S a a command q , see Bo gen
e al. (2021a)
Ou come a iable: yield
(1) (2) (3)
T ea men e ec a lowe qua ile
−
0.843*** (
−
7.41)
−
0.664*** (
−
6.88)
−
0.336** (
−
2.19)
T ea men e ec a he median
−
1.341** (
−
2.04) 0.248 (1.00) 0.447** (2.42)
T ea men e ec a uppe qua ile
−
3.159*** (
−
4.62) 3.070 (1.51) 0.325 (0.22)
Obse a ions 18,939 18,939 18,939

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Eu asian Economic Re iew (2024) 14:149–173
coun e pa s. In con as o Table12, we also ind ha CBI-ce i ied and he wo
ypes o sus ainabili y bonds ha e a posi i e impac on he lowe 5% ail OAS,
whe eas he impac on he 95% uppe ail is nega i e. O e all, his means a educed
downside isk o he sp ead, and he e o e, hose bonds a e less isky han hei non-
ESG coun e pa s.
As a obus ness check, we use quan ile ea men e ec s (QTE) o es ima e
whe he ESG bonds ha e di e en yields compa ed o con en ional bonds. In he
p e ious es ima ions using uncondi ional quan ile eg essions, we es ima ed he
di e ences in bond yields o he en i e popula ion o speci ic bond ypes. Using
QTE, we in e p e he ce i ica ion o a g een bond as a bina y ea men , and quan-
ile eg essions enable us o ob ain he ea men e ec a a ious quan iles o he
ou come a iable bond yield (see, Fi go, 2007; Bo gen e al., 2021a, 2021b, 2022).
Table13 epo s he es ima ed QTEs. In column (1), he QTEs o CBI-ce i ica ion
in compa ison o all o he bonds a e epo ed, whe eas in column (2) bo h ypes o
CBI bond (aligned and ce i ied) a e conside ed as ea men . Column (3) includes
all ESG bond ypes as ea men . The esul s a e in line wi h ou p e ious indings.
A nega i e and highly signi ican QTE o CBI ce i ica ion is ound a all qua iles
(25, 50, 75%), and i can he no ed ha he e ec o CBI ce i ica ion inc eases a
highe qua iles o bond yields. This con as s wi h he esul s epo ed in column
(2) when bo h CBI bond ypes (aligned and ce i ied) a e conside ed as ea men . In
column (2) QTE is only signi ican a he lowe qua ile bu no a he median o he
uppe qua ile. In column (3), he ea men e ec o all ESG bond ypes is es ed.
Al hough he e is a nega i e ea men a he lowe qua ile, we ind a posi i ely
signi ican QTE a he median and no signi ican QTE a he uppe qua ile. Taken
oge he , he esul s om hese obus ness es s imply ha i is he bond ce i ica ion
ha ma e s mos o he di e ence in e ms o bond yield, hus con i ming he p e-
ious esul s.
5 Conclusions
Conside ing he size o he A ican con inen as well as he g ea po en ial o launch
p ojec s o enewable ene gy gene a ion and o p ese e biodi e si y, he e exis
su p isingly ew issue s o ESG bonds in A ica. The sha e o A ican ESG bonds in
he global ESG-bond issuance olume is less han 0.3%. The A ican De elopmen
Bank and a ew p i a e banks do issue ESG bonds as well as a ew public co po a-
ions ac i e in he enewable ene gy sec o . In mos cases, he e a e o eign manag-
e s and bookmake s in ol ed, and ESG bonds a e o en deno ed in a non-domes ic
cu ency o a ac in e na ional in es o s. Also, a hand ul o so e eign ESG bonds
ha e been issued in A ica so a —he e, Egyp and Nige ia a e mos ac i e.
The econome ic analysis using quan ile ea men eg ession models es ima ed
wi h he RIF app oach shows ha , in pa icula , CBI-ce i ied bonds ha e signi i-
can ly lowe yields, lowe op ion-adjus ed sp eads, and e en lowe yield ola ili y
compa ed o hei non-ESG coun e pa s. The es ima es imply a signi ican and
obus g eenium o A ican CBI-ce i ied bonds o mo e han 200 bps. We also ind
signi ican di e ences ega ding he sp ead and ola ili y o sus ainabili y-linked
170
Eu asian Economic Re iew (2024) 14:149–173
1 3
bonds, whe eas sel -labeled g een bonds a e no signi ican ly di e en om non-
ESG bonds. This con i ms ha he g eenwashing isk exis s. Recei ing a ce i ica-
ion educes in o ma ion asymme y and signals be e bond quali y. Thus, ce i i-
ca ion o bonds is bene icial bo h o issue s and in es o s. This shows ha g een
mac o policy and inancial egula ion ha educe in o ma ion asymme y and g een-
washing isks should ha e a posi i e e ec on he de elopmen o he A ican ESG
bond ma ke . O e all, he indings o his s udy suppo he iew ha he po en ial
o issuing ESG bonds o A ica is huge and no a all exploi ed ye .
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