Green bonds are one of the most prominent innovations in sustainable finance of the past decade. However, to date the few academic studies on green bonds have tended to focus on what impact green labels have on bond yields.

This article is one of the first empirical studies designed to address the broader questions of what attracts investors and issuers to the green bond market, the role of green bonds in shifting capital to more sustainable economic activity, and how green bonds impact the way organizations work with sustainability.

Using Sweden as a case study, this paper provides insights into the rapid growth of the green bond market and how green bonds affect market participants’ engagement with sustainability that are easily missed if one focuses only on how green bonds are marketed.