Turning investments green in bond markets: Qualification, devices and morality

Abstract

This paper explores the issuance and growth of transition and sustainability-linked bonds into the green market segment normally reserved for green bonds between 2018 and 2021. Using a performative economics and STS approach we examine how key terms within environmental political discourse – transition, green, sustainability – have been incorporated into the operation of investment markets, and given specific, if unstable and contested, technico-economic forms. Using event ethnography, industry literature and primary interviews, we examine how classification works as a market device, by exploring why the newer ‘transition bond’ was favoured by some investors but not others in comparison to green and sustainability bonds. We argue that the credibility of different green labelled products is being mediated by uneven references to scientific evidence, in the context of competing marketization strategies, which have world-making effects.