Green corporate debt linked to sustained emissions intensity decline

Cortina et al. (2025) report that expansion of green corporate debt is associated with sustained reductions in firms’ carbon intensity and substantial aggregate emissions abatements.

• Main finding: The paper shows that green bonds and loans are systematically followed by declines in firms’ carbon intensity, with emissions per unit of income falling by about 50% within four years for green borrowers; hybrid issuers account for ~2/3 of green borrowers and ~85% of total green issuance. It also documents that annual corporate green debt issuance jumped nearly ninefold between 2017–18 and 2022–23, and by 2023 green instruments made up about 12% of all corporate debt.
• Background and details: The analysis covers global issuance 2012–2023, finds green debt issued 2018–2023 could be associated with 4.5–5.7 billion tonnes of CO₂ reductions by 2025 (about 12–15% of one year’s global energy-related emissions). Europe leads adoption (supported by the EU Green Taxonomy and SFDR), while the United States and China remain leaders in conventional borrowing. The study uses firm-level panel methods (local projections difference-in-differences following Dube et al. 2025).