The study, which examines the nearly $3 trillion green bond market, highlights a measurable improvement in corporate environmental performance.

The study analyzed the nearly $3 trillion green bond market, which directs capital toward projects that address climate change and support environmental sustainability. It found that, on average, companies issuing green bonds reduced their overall emissions by more than 10% within four years. Emissions intensity—measured per unit of revenue—dropped even further, by 30%.

Despite ongoing concerns about corporate “greenwashing,” the report noted that the six-fold growth of the green bond market since 2018, along with greater government involvement, is enhancing transparency. While green bonds often make up only a small portion of a company’s overall financing and may not be the primary driver of emissions reductions, the study suggests they are a strong signal of a firm’s commitment to sustainability.

The analysis found that Scope 1 emissions—direct emissions from a company’s operations, such as fuel combustion—dropped by an average of 21% within a year of a firm’s first green bond issuance. A broader measure that includes Scope 1–3 emissions, accounting for indirect emissions from supply chains, also showed sustained reductions over three years.

The study highlights green bonds as a powerful tool for fostering corporate environmental responsibility and supporting global climate efforts.