Bankers, Markets & Investors

Does it pay to go green? The impact of green bond issuance on corporate performance

Han Yu — 2025-02-13

Using a sample of 145 first-time green bond issuers and 2,225 non-issuers in 10 countries/regions from 2014 to 2019, we conduct a Propensity Score Matching-Difference-in-Difference analysis to examine the impact of green bond issuance on firms' long-term environmental and financial performance by comparing the changes after green bond issuance between issuers and a paired control group. We find a significant improvement in financial performance two years after green bond issuance but no significant changes in environmental performance. The changes in performance vary for issuers in different sectors and countries. Only issuers in the industrial and energy sectors experience real benefits after issuing green bonds. Furthermore, there is a lag of about two years in improving corporate performance. Overall, the impact of green bond issuance on corporate financial and environmental performance varies across regions and sectors.

Breaking Bad News: The Market Impact of ESG Controversies in Finance

Julien Fouquau — 2026-02-13

This paper analyzes how daily stock returns respond to ESG controversy coverage at the firm level in news and social media. Our sample comprises all 73 financial firms in the S&P 500 from January 1, 2010 – December 31, 2024. Our results show that controversies negatively impact financial firms’ stock returns. Social and governance controversies exert stronger negative effects than environmental ones. Banks experience more significant controversy-related stock declines than other financial institutions, reflecting greater public scrutiny and regulatory exposure. In a robustness check, we observe that the negative effects of ESG controversies on stock returns remain stable across different periods (2010 – 2024, 2015 – 2024, and 2020–2024).

Mitigating company characteristics as external biases in ESG valuation models

Philippe DUPUY — 2026-02-17

We study the impact of firms’ characteristics such as firms’ size, sector, and geographical activity area in ESG scorings. These characteristics may create biases in the scoring models. For example, larger firms may show on average better ESG scores than smaller firms. We propose a methodology to mitigate these biases and compute a score that is free from any factors including firms’ characteristics. We also propose a framework to detect outperforming companies regardless of any factors. Our methodology can break down final ESG scores into a component related to these external factors and a component unrelated to them.

Is public attention a catalyst for fossil fuel companies ?

Français Français — 2026-02-13

We study the relationship between public policy and corporate profitability in the context of climate change. We use panel regressions on a sample of 25 S&P500 fossil fuel companies from 2004 to 2018. We show that public attention to climate issues can have a significant impact on financial performance of firms. Indeed, we observe that climate regulatory uncertainty, as well as the stringency of public environmental policies, do not have a significant impact on the ex-post profitability of the fossil fuel extractive companies in our sample, except when public attention to climate issues intensifies.

Sustainable Finance: From Green Bonds to ESG Controversies

Dejan GLAVAS — 2026-02-17

Sustainable finance has grown substantially during the last decade, evolving from a niche to now firmly embedded in mainstream financial practice. However, several questions remain open: Do green financial instruments improve environmental outcomes? Do regulations change corporate behaviour without public scrutiny? Can we trust ESG scores when rating agencies disagree? The debate has matured, no longer fixated on ESG’s value, but on deeper, contextual questions about when, how, and for whom it matters. This special issue of Bankers, Markets & Investors brings together four articles that address these questions directly, examining the real effects of green bonds, the conditions under which climate regulation affects fossil fuel companies, the biases embedded in ESG scoring models, and how financial markets respond when firms face ESG controversies. In terms of perspective, we discuss some research avenues related to green finance, during a period of uncertainty.