Green-Bond Washing and the Yield Penalty: Evidence from Nordic Utilities

Abstract

Matching 178 green-bond issuances with project-level emissions, we find that 31 % of labeled green projects exceeded baseline carbon intensities. Event-study results show a 15-basis-point yield penalty upon revelation, concentrated among ESG-constrained funds. A reputation-based signaling model explains why high-type issuers still risk soft green-washing.