Positive stock market reaction when green bond issuance is announced: Stock markets expect green bonds to contribute to shareholder value creationImprovements in environmental performance following the green bond issuance(Conduct-based environmental ratings improve/ CO2 emissions decrease, not for greenwashing)Financial benefits strongerfor certified green bonds (Climate Bonds Initiative)in industries where environmental issues are more material (SASB) for first-time issuersEnvironmental benefits stronger for certified bondsFindings most consistent with a signaling argument—companies credibly signal their commitment toward the environment by issuing green bonds.

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