Does certification of green bonds add value to investors? : the role of CBI-certification in informational efficiency
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- Master Thesis 
This study looks into Climate Bonds Initiative’s certification of green bonds to see whether it provides value for investors and contributes to market efficiency. We explore whether issuers of certified bonds have a higher ESG score and whether the bonds hold a green premium. This is done by contrasting certified green bonds to uncertified green bonds from Thomson Reuters’ database from 2014 to 2019. We apply OLS regressions with controls to utilize our full sample. To address endogeneity concerns, we use matched companies in a difference in differences estimation of ESG score, while pairs of matched bonds are used in a yield regression. Lastly, we analyze the ownership structure of bond issuers through an interaction term with certification, to determine whether the effect of certification varies for different values of institutional ownership. There are no indications of differences between certified and uncertified green bonds, or between their issuers. We conclude that a green premium does not exist on certified bonds, and there is no evidence to reject the hypothesis of market efficiency. Further, institutional ownership does not seem to affect ESG score, YTM or the probability of certification. However, this study contributes with insights on informational concerns and the value of certification of green bonds.