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Interactive effects of brand reputation and ESG on green bonds success: A sustainable investment perspective

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Open access
Authors
Cheng, Louis TW
Sharma, Piyush
Broadstock, David
Date
2022
Type
Journal Article

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Cheng, L.T.W. and Sharma, P. and Broadstock, D. 2022. Interactive effects of brand reputation and ESG on green bonds success: A sustainable investment perspective. Business Strategy and the Environment.
Source Title
Business Strategy and the Environment
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Faculty
Faculty of Business and Law
School
School of Management and Marketing
Remarks

This is the peer reviewed version of the following article: Cheng, L. T. W., Sharma, P., & Broadstock, D. C. (2022). Interactive effects of brand reputation and ESG on green bond issues: A sustainable development perspective. Business Strategy and the Environment, 1– 17, which has been published in final form at https://doi.org/10.1002/bse.3161. This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Use of Self-Archived Versions.

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Abstract

This paper shows that brand reputation alone may not be sufficient to help firms successfully issue green bonds and that they may need superior corporate social responsibility performance in the form of high ESG (Environmental, Social, and Governance) scores to unlock the full potential of their brand reputation. Using a sample of 338 international green bond issues across 108 unique firms, we found significant positive effects of ESG disclosure score and its interaction brand reputation on the issuance of green bonds while controlling for other variables, such as fixed effects of industry, region, and time. We also show that it is the S (Social) component of ESG and the interactions of its E (Environmental) and G (Governance) components with brand reputation which drive successful green bond issuance. Besides extending the current research on the impact of brand reputation and ESG on green bonds, these results also have important managerial implications for analysts, fund managers, and firms planning to raise green capital.