Comparison Between Green Bonds and Traditional Bonds in a Rising Interest Rate Environment

Abstract

During the last few years, sustainable investing instruments have gained much attention, and the demand for them has increased significantly. Fixed-income investors also participate by investing in green bonds. Various studies have found a difference in pricing between green and conventional bonds, the so-called green premium or ‘greenium’. This research specifically looked at the green bond market and sought to find out whether rising demand is leading to a green premium in Switzer-land.