The latest research developed within the CEGE – Research Centre in Management and Economics has been published in the prestigious scientific journal Journal of International Money and Finance, one of the leading international publications in the fields of monetary economics, finance and global capital markets.
The article, entitled “Sustainable versus conventional bonds: A comparative analysis of primary market spreads”, is the result of a collaboration between the Dean of Católica Porto Business School, João Pinto, and Diva Ribeiro, a former MSc in Finance student at the School.
The research analyses whether sustainable bonds — including green bonds, social bonds and sustainability bonds — benefit from lower issuance spreads when compared to conventional bonds in international debt markets.
Based on a broad international sample of bond issuances, the study shows that sustainable and conventional bonds are priced differently by investors. The findings also reveal that investors place less emphasis on credit ratings when assessing sustainable debt instruments.
“We found that sustainable and conventional bonds display different pricing behaviours and that investors place less emphasis on credit ratings when analysing sustainable debt,” explains João Pinto. “While social bonds show lower spreads compared to conventional bonds, the same does not apply to green and sustainability bonds. In addition, we demonstrate that sustainable bond issuance is strategic, particularly during periods of crisis.”
The research also concludes that demand for ESG-linked financial instruments tends to increase during periods of uncertainty, reinforcing the growing relevance of sustainability within international financial markets.
For Diva Ribeiro, co-author of the article: “against a backdrop of sustainability becoming increasingly important, this article is relevant not only academically but also in practice, as it compares the spreads and pricing of sustainable bonds (green, social and those linked to sustainability KPIs) with those of conventional bonds. For my professional practice, it makes a significant contribution to informing decision-making when selecting financing instruments.”
The article is already available online and can be accessed through its official DOI: Journal of International Money and Finance article
This publication further reinforces Católica Porto Business School’s commitment to relevant, applied research aligned with one of the School’s core pillars: sustainability as a strategic dimension for the future of the economy, organisations and society.
