6:00 PM Seminar Begins
7:30 PM Reception
140 West 62nd Street
New York, NY 10023
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The theory of sustainable investing proposes that investors are willing to take lower returns because they relish holding green assets, which hedge climate risk by encouraging pro-environmental outcomes. We test this proposition using a large sample of green bonds and find three exciting results. First, the issuer concentration in this asset class influences the event study results suggesting that Tesla green bonds were behind shareholders' positive response. Second, unlike no yield differential in the primary market, green bonds in the secondary market have a lower yield of negative 32 basis points relative to a propensity score matched sample, a finding primarily attributable to the green bonds issued by the financial sector. Green bonds issued by four polluting sectors – the energy, industrial, material, and utility sectors – are associated with relatively higher yields in the secondary market, while we would have expected investors in such sectors to provide the operators with incentives to improve their environmental footprint. Third, the emissions for issuers of green bonds do not fall even after four years following issuance. Our work raises questions on the value of green bonds for investors and the environment.
Shiva Rajgopal is the Kester and Byrnes Professor of Accounting and Auditing at Columbia Business School. He has also been a faculty member at the Duke University, Emory University and the University of Washington. Professor Rajgopal’s research interests span financial reporting, earnings quality, fraud, executive compensation and corporate culture. His research is frequently cited in the popular press, including The Wall Street Journal, The New York Times, Bloomberg, Fortune, Forbes, Financial Times, Business Week, and the Economist. He teaches fundamental analysis of financial statements for investors, managers and entrepreneurs and a PhD seminar on accounting regulation.
Key awards include 2006 and 2016 American Accounting Association (AAA) Notable Contribution to the Literature award, 2006 and 2016 Graham and Dodd Scroll Prize given by the Financial Analysts Journal, and the 2008, 2012 and 2015 Glen McLaughlin Award for Research in Accounting Ethics.
He is the Departmental Editor of the Accounting track of Management Science. He is also an Associate Editor at the Journal of Accounting and Economics and an ex-editor at Contemporary Accounting Research. He was on the editorial board of The Accounting Review from 2003-2011.