The Relationship Between Board Composition and the Ratings Given to Green Bonds: An Empirical Analysis

Abstract

Due to the growing number of green bond issues, a lack of mandatory standards and thus the growing phenomenon of greenwashing, an increasingly greater role is assumed by external auditors who are called upon to certify the ‘greenness’ of green bonds. These include rating agencies, which may be called on to express a green rating for each issue of green bonds. Based on a unique dataset made up of 66 green bond issues together with their respective green ratings from 2015 to 2020, the aim of this paper is to test the relationship between issuers’ board compositions and the green rating assigned to each bond issue. The results obtained confirm some conclusions already present in the existing literature and also open a new field of research concerning the green bond market, which has so far been little analysed, especially with reference to corporate governance.