A1568
Title: Financing biodiversity: Does a biodiversity premium exist in sustainable bonds
Authors: Enrique Ballesta - URJC (Spain) [presenting]
Pilar Abad - Universidad Rey Juan Carlos (Spain)
M-Dolores Robles - Universidad Complutense de Madrid (Spain)
Abstract: Biodiversity is a critical component of ecosystem services, providing environmental sustainability and economic value. Even so, biodiversity has suffered unprecedented damage during the last decades, and its degradation poses a major risk to the global economy and the financial system. In that context, sustainable debt has gained the attention of investors aiming to build nature risk-resilient portfolios, and issuers, financial institutions and regulators have increased its awareness. The objective aims to tackle the biodiversity finance research gap, specifically focusing on European sustainable debt, by studying the existence of a biodiversity yield premium, biodiversity greenium in biodiversity-oriented sustainable bonds. To do so, econometric methods are proposed, specifically pseudo-panel data models, fed with public market data obtained by using an unprecedented matching method between the sustainable bond and a brown quoted curve. A database has been developed incorporating European sustainable labelled debt issued during the period between 2007 and 2022 with information to study the existence of any geographical influence or temporal influence in the biodiversity greenium in the periods around the UN COPs meetings. The dataset also incorporates unprecedented information about the proceeds' alignment with the preservation of biodiversity and with respect to the UN SDGs.
