ANALYSIS OF RATES OF RETURN FOR GREEN FINANCING INSTRUMENTS ON GLOBAL MARKETS

Abstract

The study examines the existence of a price advantage of sustainable green financing compared to traditional instruments. The aim of the research is to identify the presence of the “greenium” effect, i.e., a discount in yield or interest rate on green bonds and loans relative to comparable traditional issues. The analysis focuses on greenium based on data for sovereign and corporate bonds across different countries, as well as practical examples confirming that borrowers can indeed raise capital on more favorable terms when the environmental or social value of projects is demonstrated. Review of equity market data revealed mixed results: some studies indicate the absence of a consistent premium in ESG asset returns, while others report higher or at least comparable performance relative to traditional indices. In conclusion, it is noted that the integration of ESG factors generally does not worsen financial performance and may provide returns that are comparable to or even higher than traditional investments. For borrowers, the presence of a small discount in interest rates serves as an incentive to issue green bonds and attract sustainable financing, while for investors it becomes a factor of diversification and risk management.