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LUND UNIVERSITY LIBRARIES

Pricing the Green Label: Greenium in the European Bond Market - Impact of the EU Green Bond Standard on the Green Premium

Klemenzdóttir, Helga LU and Lugojan, Madalina LU (2025) NEKN02 20251
Department of Economics
Abstract
This study examines the impact of the European Green Bond Standard on the pricing of green bonds in the European bond market. The EU Green Bond Standard entered into force in December 2023 and its purpose is to enhance transparency and investor confidence by
providing a clear framework for green bond issuance. Using a matched sample of 105 green and conventional bond pairs with weekly yield data, the study applies a two-stage empirical approach. A t-test confirms the presence of a statistically significant positive green premium, with green bonds trading at lower yields. A Random Effects model indicates that the premium widened after the regulation took effect. However, this effect becomes insignificant when bond-level characteristics... (More)
This study examines the impact of the European Green Bond Standard on the pricing of green bonds in the European bond market. The EU Green Bond Standard entered into force in December 2023 and its purpose is to enhance transparency and investor confidence by
providing a clear framework for green bond issuance. Using a matched sample of 105 green and conventional bond pairs with weekly yield data, the study applies a two-stage empirical approach. A t-test confirms the presence of a statistically significant positive green premium, with green bonds trading at lower yields. A Random Effects model indicates that the premium widened after the regulation took effect. However, this effect becomes insignificant when bond-level characteristics are included in an OLS regression. Further analysis reveals that the regulation’s impact varies across currencies, credit ratings, and maturities, suggesting that the green premium is shaped by both regulatory signals and bond-specific factors. (Less)
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author
Klemenzdóttir, Helga LU and Lugojan, Madalina LU
supervisor
organization
course
NEKN02 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Greenium, Green Bonds, European Green Bond Standard, Sustainable Finance, External Certifications
language
English
id
9193961
date added to LUP
2025-09-12 10:41:57
date last changed
2025-09-12 10:41:57
@misc{9193961,
  abstract     = {{This study examines the impact of the European Green Bond Standard on the pricing of green bonds in the European bond market. The EU Green Bond Standard entered into force in December 2023 and its purpose is to enhance transparency and investor confidence by 
providing a clear framework for green bond issuance. Using a matched sample of 105 green and conventional bond pairs with weekly yield data, the study applies a two-stage empirical approach. A t-test confirms the presence of a statistically significant positive green premium, with green bonds trading at lower yields. A Random Effects model indicates that the premium widened after the regulation took effect. However, this effect becomes insignificant when bond-level characteristics are included in an OLS regression. Further analysis reveals that the regulation’s impact varies across currencies, credit ratings, and maturities, suggesting that the green premium is shaped by both regulatory signals and bond-specific factors.}},
  author       = {{Klemenzdóttir, Helga and Lugojan, Madalina}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Pricing the Green Label: Greenium in the European Bond Market - Impact of the EU Green Bond Standard on the Green Premium}},
  year         = {{2025}},
}