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Pricing Greenness: The EU’s policy effect

Bengtsson, Ebba LU and van Leest, Stella LU (2025) BUSN79 20251
Department of Business Administration
Abstract (Swedish)
Seminar date: June 2nd 2025
Course: BUSN79 - Degree Project in Accounting and Finance
Authors: Ebba Bengtsson & Stella van Leest
Advisor & Examiner: Elias Bengtsson & Reda Moursli
Five key words: Green bonds, EU Taxonomy, SFDR, Yield to Maturity, Greenium
Purpose: The purpose of this study is to deepen our understanding of how market and policy
developments in sustainable finance have impacted the pricing of green bonds in the EU.
Methodology: Match pairs of green and comparable conventional bonds upon which we
perform pooled cross-sectional OLS regressions.
Theoretical Perspectives: Efficient Market Hypothesis, Information Asymmetry and
Signaling theories.
Empirical foundation: The results reveal a statistically significant... (More)
Seminar date: June 2nd 2025
Course: BUSN79 - Degree Project in Accounting and Finance
Authors: Ebba Bengtsson & Stella van Leest
Advisor & Examiner: Elias Bengtsson & Reda Moursli
Five key words: Green bonds, EU Taxonomy, SFDR, Yield to Maturity, Greenium
Purpose: The purpose of this study is to deepen our understanding of how market and policy
developments in sustainable finance have impacted the pricing of green bonds in the EU.
Methodology: Match pairs of green and comparable conventional bonds upon which we
perform pooled cross-sectional OLS regressions.
Theoretical Perspectives: Efficient Market Hypothesis, Information Asymmetry and
Signaling theories.
Empirical foundation: The results reveal a statistically significant negative yield differential
for green bonds and indicate that the EU Taxonomy further compresses green bond yields. In
contrast, SFDR appears to exert no significant influence on yields.
Conclusions: This paper concludes that the EU green bond market exhibits inefficiencies,
and in this context, a greenium exists but pricing of green bonds varies across issuer
segments. More precise and credible regulatory frameworks mitigate information asymmetry
and deliver greater incentives for market participation. (Less)
Please use this url to cite or link to this publication:
author
Bengtsson, Ebba LU and van Leest, Stella LU
supervisor
organization
course
BUSN79 20251
year
type
H1 - Master's Degree (One Year)
subject
keywords
Green bonds, EU Taxonomy, SFDR, Yield to Maturity, Greenium
language
English
id
9205058
date added to LUP
2025-06-26 14:03:16
date last changed
2025-06-26 14:03:16
@misc{9205058,
  abstract     = {{Seminar date: June 2nd 2025
Course: BUSN79 - Degree Project in Accounting and Finance
Authors: Ebba Bengtsson & Stella van Leest
Advisor & Examiner: Elias Bengtsson & Reda Moursli
Five key words: Green bonds, EU Taxonomy, SFDR, Yield to Maturity, Greenium
Purpose: The purpose of this study is to deepen our understanding of how market and policy
developments in sustainable finance have impacted the pricing of green bonds in the EU.
Methodology: Match pairs of green and comparable conventional bonds upon which we
perform pooled cross-sectional OLS regressions.
Theoretical Perspectives: Efficient Market Hypothesis, Information Asymmetry and
Signaling theories.
Empirical foundation: The results reveal a statistically significant negative yield differential
for green bonds and indicate that the EU Taxonomy further compresses green bond yields. In
contrast, SFDR appears to exert no significant influence on yields.
Conclusions: This paper concludes that the EU green bond market exhibits inefficiencies,
and in this context, a greenium exists but pricing of green bonds varies across issuer
segments. More precise and credible regulatory frameworks mitigate information asymmetry
and deliver greater incentives for market participation.}},
  author       = {{Bengtsson, Ebba and van Leest, Stella}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Pricing Greenness: The EU’s policy effect}},
  year         = {{2025}},
}