2.1. Green bonds and its impact

The issuance of the first green bond by the European Investment Bank in 2007 marked a turning point in green finance, attracting considerable academic interest. Green bonds, designed to fund projects with environmental benefits, quickly became a focal point of research, as scholars sought to understand their impact and effectiveness.

Flaherty et al. (2017) conducted a comprehensive study on green bonds, examining their role in financing environmentally sustainable projects. Their research highlighted how green bonds had become a significant tool for raising capital for projects in renewable energy, energy efficiency, and other environmentally friendly initiatives. The study also explored the market performance of green bonds, noting their growing popularity among investors and their potential to bridge the funding gap for sustainable projects.

Another significant contribution in this area was made by L. H. Nguyen, Dung, Minh, Quynh, and Ngan (2023), who explored the motivations behind the issuance of green bonds and their potential to drive corporate behavior towards more sustainable practices. Their research indicated that green bonds not only provide essential funding for environmental projects but also signal a commitment to sustainability from the issuing entities, influencing corporate strategies and investor perceptions.

The impact of green bonds on the broader financial markets was another area of academic focus. Studies investigated how green bonds were influencing investment patterns and whether they were leading to a reallocation of capital towards more sustainable projects. These investigations revealed the potential of green bonds to catalyze a shift in financial markets towards greater environmental responsibility.