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Impact of green bond policies on insurers: evidence from the European equity market

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Abstract

This article empirically investigates whether the introduction of green bond policies by European insurance companies has a positive impact on their equity prices. To this end, we employ a sample of listed (re)insurers in Europe using monthly data for the 2012–2019 period. We use announcements, press releases and semi-annual or annual reports to determine when the insurance companies committed to a green investment, to the issuance of green bonds or to launching a green fund. Our empirical analysis did not confirm the positive effect of green policies. However, when investigating different types of green policies, our results suggest that market investors positively price the issuance of green bonds and launching green funds.

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Notes

  1. United Nations Sustainable Development Goals (SDGs) and the Paris Climate Agreement (2015)

  2. Matched bond pairs are restricted to US dollar- and euro-denominated green bonds.

  3. Please note that only 11 dummy variables need to be added to capture monthly seasonality.

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Funding

Financial support from the Czech Science Foundation (Project No. GA 20-00178S) is gratefully acknowledged. The views expressed in this paper are exclusively those of the authors and do not necessarily reflect those of the institutions with which the authors are affiliated.

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Authors and Affiliations

  1. European Insurance and Occupational Pensions Authority (EIOPA), Frankfurt, Germany

    Petr Jakubik

  2. Institute of Economic Studies, Charles University, Prague, Czech Republic

    Petr Jakubik

  3. Single Supervisory Mechanism, European Central Bank, Frankfurt, Germany

    Sibel Uguz

Authors
  1. Petr Jakubik
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  2. Sibel Uguz
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Correspondence to Petr Jakubik.

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Jakubik, P., Uguz, S. Impact of green bond policies on insurers: evidence from the European equity market. J Econ Finan 45, 381–393 (2021). https://doi.org/10.1007/s12197-020-09534-4

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  • DOI: https://doi.org/10.1007/s12197-020-09534-4

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