Green bonds and sustainable business: a systematic literature review and future research agenda

Purpose Green bonds (GBs) have emerged as a pivotal sustainable product in security markets, meticulously developed to attract substantial funding for environmental and planetary health initiatives. This paper aims to review existing studies to establish GB investments as a sustainable business practice, exploring their various dimensions, identifying determinants of their issuance and assessing their efficacy as a sustainable product contributing to societal well-being. Design/methodology/approach The present study is a systematic literature review of 61 papers based on the scientific procedures and rationale for systematic literature reviews protocol and theory, context, characteristics, methodology framework. The authors underscore the drivers of GB issuance, the environmental and sustainable impact of GBs and leveraging greenium through GB issuances to provide future research directions. Findings The present study conclusively documented that environmental commitment, reputational benefits, cost effectiveness and profit maximization are the main drivers of GB issuances. In addition, GB issuance positively affects the environmental performance and stock prices of companies and proves to be a resilient hedging asset during times of crisis. The study asserts that certain factors, such as cryptocurrency, energy and oil prices, affect the performance of the GB market. However, researchers have mixed opinions regarding the existence of greenium in GB issuance. Originality/value The study is a pioneer effort to comprehend the multifaceted determinants of GB, stock market reaction, the environmental performance of GB, their relationship with other assets, the concept of greenium and other macroeconomic factors affecting GB performance. The novelty of the study lies in its unique approach, systematically reviewing selected GB studies to uncover previously unexplored aspects.