Nexus between green bonds, financial, and environmental indicators

This study uses a recent approach to examine the causal associations between green bonds and other conventional assets, including clean energy, price of CO2 emission allowances, Bitcoin, and the S&P 500 stock market covering from January 2013 to March 2019. We find a bidirectional relationship between green bonds, S&P 500, and Bitcoin markets, while green bonds have a unidirectional connection with the price of CO2 emission allowances. More importantly, clean energy has a significant impact on green bonds and vice versa throughout the sample period. The results have several useful implications for green bond investors in connection with portfolio design and hedging decisions.