This thesis aims to analyse the Green Bond market and its protagonists in order to assess its long-term potential in financing the necessary changes on earth.
To ensure that readers without profound financial literacy can comprehend the paper, the second chapter gives an overview of the debt capital market instrument "bonds" and its main aspects. The tools used to assess the protagonists' international competitiveness as part of the international analysis are introduced here as well. The third part deals with "Green Bonds" in particular. It consists of important general information and a widespread market overview. Section four comprises the international market and competitiveness analyses of the main market players: the EU, United States and China (with Hong Kong SAR). A future prospect for the Green Bond market, based on the outcomes of a brief "expert interview" the author distributed among professionals working in the financial world, is given in chapter five. To round off the thesis, the sixth and final chapter forms the conclusion that draws a bow back to the introduction.
Table of Contents
1 Introduction
2 Fundamentals
2.1 Bonds
2.2 Public issuers
2.3 Private issuers
2.4 Tools for international analysis
3 The Green Bond Market
3.1 Fundamentals
3.1.1 Classification and assessment criteria
3.1.2 Types of Green Bonds
3.1.3 Evaluation of Green Bonds
3.2 Overall market development
3.2.1 Timeline
3.2.2 Characteristics in numbers
3.2.3 Market development in numbers
4 International analysis
4.1 European Union
4.1.1 Market segmentation by member states
4.1.2 Public side
4.1.3 Private side
4.1.4 Summary
4.1.5 Assessment regarding international competitiveness
4.2 USA
4.2.1 Public side
4.2.2 Private side
4.2.3 Summary
4.2.4 Assessment regarding international competitiveness
4.3 China
4.3.1 Public side
4.3.2 Private side
4.3.3 Summary
4.3.4 Assessment regarding international competitiveness
4.4 Conclusion of international analysis
5 Outcomes
5.1 SWOT-Analysis
5.2 Future Prospect
6 Conclusion
Objectives and Research Focus
This thesis examines the role of the Green Bond market in financing global sustainable transitions by analyzing the activities and competitiveness of public and private issuers across the European Union, the USA, and China.
- Analysis of the current structure and development of the international Green Bond market.
- Differentiation between public and private issuer behaviors and strategies.
- Application of Porter’s Diamond Model to assess international competitive advantages of the three primary economic zones.
- Evaluation of market maturity and future growth prospects based on empirical data and expert perspectives.
Excerpt from the Book
2.1 Bonds
,, A bond can be defined as a loan for which, instead of a loan agreement, the form of the negotiable security has been chosen. The buyer of the bond (lender) gives the borrower (issuer) an amount of money and in return receives the right to interest payments (coupons) during the term and to repayment of the amount of money at the end of the term.”
Basically, issuing a bond is similar to lending money from a bank. This means, that from the issuer’s perspective, financing via bonds represents debt capital; contrary to this, financing via issuing shares means raising equity. The bond holder as a creditor has the right on interest payments (fixed revenue) and a redemption claim towards the issuer. In case of bankruptcy, the bond holder gets preferred treatment in payments compared to the shareholder (co-ownership). Bonds are traded on the bond market (debt capital market). Together, debt capital market and stock market form the “capital market in the narrower sense”, whereas the volume of the overall debt capital market is slightly higher than the in society more famous stock market.
The distinction between a bond and other capital market instruments (e.g. certificates) is not always clear, but a bond usually has the following characteristics: issuer (debitor); nominal value (= basis for coupon payments); coupon (interest rate in percent; interval and method of payment); maturity date (typ.: repayment of nominal value) and terms of repayment. Regularly, a bond is a security with medium (up to five years) or long-term maturity (up to 100 years).
Summary of Chapters
1 Introduction: This chapter introduces the context of sustainable development and the necessity of massive financial investments to achieve global climate goals through debt capital markets.
2 Fundamentals: This section explains the basic mechanics of bond markets, defines different types of bonds, identifies issuer categories, and introduces analytical tools for market assessment.
3 The Green Bond Market: This chapter defines Green Bonds, outlines the regulatory frameworks like the Green Bond Principles, and provides a statistical overview of market evolution.
4 International analysis: This core section provides a comparative study of the EU, USA, and China, evaluating their respective public and private sector issuers and competitive positions.
5 Outcomes: This chapter synthesizes the analytical findings through a SWOT-analysis and provides an outlook on future market trends based on expert interviews.
6 Conclusion: The final chapter summarizes the findings regarding the potential of Green Bonds to facilitate global climate transformation and reflects on the research process.
Keywords
Green Bonds, Sustainable Finance, Debt Capital Market, Climate Change, ESG Investing, Public Issuers, Private Issuers, Porter’s Diamond Model, Global Competitiveness Index, European Union, USA, China, Sustainability, Renewable Energy, Market Development
Frequently Asked Questions
What is the primary focus of this thesis?
The thesis focuses on the international Green Bond market, specifically examining how public and private issuers in the EU, the USA, and China utilize this financial instrument to fund sustainable projects.
What are the central themes of this work?
The work covers sustainable development, the mechanics of bond financing, the classification of green financial products, and an assessment of international competitiveness in the sustainable finance sector.
What is the main objective or research question?
The primary aim is to analyze the Green Bond market and its participants to assess its long-term potential in financing the global transition toward a more sustainable and CO2-neutral economy.
Which scientific methods are utilized?
The research uses quantitative data analysis of market volumes and issuance numbers from the Climate Bond Initiative, combined with qualitative analysis using Porter's Diamond Model and the Global Competitiveness Index (GCI).
What topics are covered in the main section?
The main section details the fundamentals of bonds, standards for Green Bonds, and provides a granular breakdown of the EU, US, and Chinese markets, categorized by public versus private sector involvement.
Which keywords characterize this work?
Key terms include Green Bonds, ESG, Sustainable Finance, international competitiveness, Porter's Diamond Model, and market dynamics in the EU, USA, and China.
How does the author distinguish between public and private issuers in China?
The author highlights the difficulty of classification due to China's political system, where even supposedly private entities are often state-controlled or influenced by the Communist Party of China.
Why does the author consider the EU a pioneer in the Green Bond market?
The EU is identified as a pioneer because the European Investment Bank (EIB) launched the first climate awareness bond in 2007, and European institutions currently maintain high levels of expertise and market diversity.
- Arbeit zitieren
- Tilman Baunach (Autor:in), 2020, The Market of Green Bonds. An International Analysis of Public and Private Issuers in the Green Bond Market, München, GRIN Verlag, https://www.grin.com/document/946299
