Fiddle

This research examines the ambivalent role of green bonds in redirecting private capital toward ecological transition. While sustainable finance mechanisms increasingly rely on transparency to improve environmental information, their effectiveness remains limited, partly due to data overload and greenwashing risks. Green bonds, introduced in 2007 and now a rapidly expanding market segment, illustrate both the promise and the challenges of sustainable finance. Their impact depends on the quality of the standards used to classify bonds as “green,” yet the proliferation of overlapping frameworks creates confusion and weakens credibility. To understand how green bonds are constructed and governed, the study combines insights from sustainable finance and the Social Studies of Finance. Through three Belgian case studies—public, private, and financial issuers—it investigates the actors, interactions, and governance systems shaping these instruments. The project aims to assess their real contribution to ecological transition and identify pathways to strengthen their effectiveness.

Context

Although relatively new, green bonds have produced substantial academic literature, mainly in sustainable finance and the Social Studies of Finance (SSF). Sustainable finance research has focused on the financial characteristics of green bonds—returns, risk, diversification—and generally finds limited differences from conventional bonds. Their rapid growth therefore raises questions that financial metrics alone cannot answer. This literature also investigates greenwashing risks and the non-financial impact of green bonds, which is crucial for assessing their role in ecological transition. Yet important dimensions remain underexplored, particularly how green bonds are constructed, which actors shape them, and how these actors interact.

Needs addressed

Our research positions itself at the intersection of sustainable finance and SSF. From sustainable finance, we retain the central aim of assessing the contribution of green bonds to ecological transition—a topic largely absent from SSF. From SSF, we adopt a qualitative methodology suited to capturing the complexity of green bond markets. Through three Belgian case studies, we analyze how green bonds are formed, which actors participate, and how governance structures shape outcomes.

Expected results

Empirically, the project enriches existing quantitative studies by uncovering the social and institutional mechanisms underpinning the expansion of green bonds in Belgium. A core paradox motivates the research: despite minimal financial differences from conventional bonds, green bonds are increasingly successful. The study seeks to explain this through qualitative factors driving their attractiveness.
Theoretically, the project contributes to sustainable finance by integrating SSF perspectives. This interdisciplinary approach offers a more robust framework for analyzing how financial markets evolve during ecological transition. Ultimately, the study aims to clarify how financial innovations such as green bonds can support systemic environmental change and strengthen the broader field of II

Financing

FRHE by Wallonia-Brussels Federation