Conference Agenda

Do green bonds actually reduce corporate carbon footprints — and does the language a CEO speaks shape how effectively they do so? We address these questions by examining the causal impact of corporate green bond issuance on greenhouse gas (GHG) emissions intensity, and by testing whether linguistic Future Time Reference (FTR) — a structural property of language that shapes how speakers perceive and plan for the future — moderates this relationship. Our analysis is based on a large dataset of over 3867 publicly listed non-financial firms from 65 countries over the period 2010-2024. We employ a staggered Difference-in-Differences design in estimation. We then use entropy balancing to improve covariate similarity between treated and control firms. The results show that green bond issuance reduces GHG emissions intensity by an average of 19.3% to 20.5% - an effect that holds across matched samples and alternative estimators. Heterogeneity analyses further reveal that environmental gains are amplified in carbon-intensive industries, among high-investment firms, and for bonds with longer maturities. Strikingly, we uncover a novel linguistic channel: firms headquartered in weak-FTR language environments achieve significantly greater emissions reductions, consistent with the idea that grammatical structures that blur present-future distinctions encourage more far-sighted environmental commitment. To sharpen identification of this channel at the executive level, we introduce a CEO Weak-FTR Index — a novel measure constructed using machine learning and phonetic classification — which confirms and strengthens our moderation results, underscoring the role of CEO linguistic background as a previously overlooked yet consequential driver of corporate environmental performance.

Given climate change risks and regulatory initiatives combating climate crisis are rising, carbon transition risks have become significant risks for firms that increase operational costs, litigations costs, and penalties. Prior literature shows that carbon risks have premiums in the stock markets (Bolton and Kacperczyk, 2021, 2023), and in the bond markets (De Jonge et al., 2025; Duan et al., 2025). It implies that for higher carbon emissions by the firms, investor requires more compensations. Two specific channels work here. One is risk channel and another one is investor preference channel (De Jonge et al., 2025). How carbon transition risks affect firm level credit risks, specifically for issuers in green bond markets is a new and novel stream of research (Ma et al., 2025; Carbone et al., 2022; Guesmi et al., 2025).

A key theoretical underpinning in recent sustainable finance literature is greenium hypothesis. It suggests that green assets priced lower than the brown assets (Pástor et al., 2021 2022; 2024). Due to lower cost of capital for green assets, issuers are often more inclined to issue green bonds rather than brown or conventional bonds (Flammer,2021). When firms observe high climate change exposure, they issue more green bonds (Guesmi et al., 2025). Motivated by recent theoretical and empirical work, we study the impact of carbon risks on firm level credit risks using unique hand collected dataset of global green bond issuers.

Our data includes issuers who issue green bonds and equivalent non-green bonds during 2015-2023. For our purpose, we match green and non-green bond data from the same issuers, implying green and non-green bonds are alike or twins issued by the same firms. Our data comes from Bloomberg, LSEG workspace, and our carbon pricing data comes from

https://www.realcarbonindex.org and Fuchs et al. (2024). For the period of 2019 -2023 in table 1 in appendix, we find that carbon emissions (Scope 1) negatively and significantly affecting the credit risks for the firms. It implies that when companies do more emissions, credit risks reduce. This could be due to mispricing of carbon risks. While, scope 2 and 3 emissions are insignificant. Additionally, carbon intensity (emission per unit of activity) is statistically insignificant for scope 1, 2 and 3 level emissions. So, we find mispricing of carbon risks among the data of global green bond issuers. While, green bond issuance (as denoted by green bond dummy) does not affect credit risks due to statistically insignificant impact. While, we expected green bond issuance would decrease credit risks.

Further, we test the impact of carbon pricing (in table 2) on credit risks rather than absolute emissions and intensity. For a dataset of 2015-2022, We find that global carbon pricing increases credit risks, which is logical with the theory as higher carbon risks impose higher costs on the firms in terms of higher operations costs, regulatory costs, and litigations costs. Moreover, we used Carbon VIX and carbon implied volatility from EU ETS data to test the impact of carbon price uncertainty provided by Fuchs et al (2024). We find that it affects credit risks positively and significantly. Higher uncertainty in carbon prices leads to lower investment in decarbonisation activities (Fuchs et al, 2024), which ultimately priced in credit risks. Our results are consistent with the prior literature that absolute emissions often mispriced in the equity and bond markets (Aswani et al., 2024), but our results contrast De Jonge et al. (2025) who find significant carbon risk premium for European bond market. While, carbon price uncertainty has more sizeable and consistent effects in firm level credit risks. Our paper contributes to the literature of carbon transition credit risks. Our results have important implications for policy makers and investors in sustainable finance markets in terms of pricing carbon induced credit risk in financial markets.

We investigate how the U.S. dollar’s prominence in the denomination of international debt securities has evolved in recent decades, using a comprehensive global data set with far more extensive coverage than data sets used in prior literature. We find no monotonic dollarization or de-dollarization trend; instead, the dollar’s share exhibits a wavelike pattern. We document three dollarization waves since the 1960s. The last wave, following the global financial crisis, lifted the dollar’s share nearly back to its level at the euro’s launch in 2000. We show that closer alignment of a country’s domestic currency to a reserve currency (e.g., the U.S. dollar) correlates with higher shares of issuance in that currency. Our findings are robust to composition and currency valuation effects as well as alternative data definitions.