Do Investors Value Green Initiatives? A Study of the ISO 14001 Certification and the Issuance of Green Bonds

Abstract

The aim of this thesis is to explain the impact on stock prices for publicly traded firms from certifying to the ISO 14001 standard. Through the event study methodology, we study 28 firms listed in Norway or Sweden who certified to the standard within the period 1999-2014. We conduct both a univariate and cross-sectional analysis, and find that there are no overall effects on stock prices from certifying to the standard. Further, we investigate if the issuance of green bonds acts as a signal of environmental commitment from the firms to the investors. Again we apply the event study methodology for 16 European firms who issued green bonds in the period 2013-2015, and find that issuance of green bonds does not affect the stock prices. According to our results, we propose two different explanations: 1) Investors do not see the certification nor the issuance of green bonds as an initiative that creates or destroys value for the firm. 2) Investors are not united in their evaluation of the initiatives, which leads to no overall effect.