Challenges of Achieving a Green Future and Financial Security - A Multiple Case Study of Swedish Pension Firms' Green Bond Assessment Processes

University essay from Lunds universitet/Företagsekonomiska institutionen

Abstract: Deriving from an increased awareness of the devastating effects of global warming consequences, the interest for green bonds is growing at an explosive pace. However, researchers and practitioners have raised concerns about the challenges of assessing green bonds. Responding to a well-defined research gap stemming from identified challenges to assess green bonds, the primary purpose of this study is to explore how Swedish pension firms assess green bonds prior to investment. Given the explorative characteristics of the research, this study is conducted qualitatively through a multiple case study, using interviews to capture unique and similar aspects of five Swedish pension firms. In addition to the scarce literature on green bonds, this study uses the adjacent theoretical foundations of sustainable investing and conventional bond assessment. The institutional logics theory constitutes the theoretical lens through which the study analyses green bond assessments. The study concludes that two primary institutional logics are shaping the pension firms’ assessment processes; a financial and an environmental. Findings show that the overall assessment process contains the same basic structure; however, findings also indicate differences within this basic structure. To the extent of our knowledge, this thesis is first to introduce pension firms’ rationale for their choice of assessment approach when handling identified challenges on the green bond market. Findings further imply a paradox that pension firms encounter, in which they have to choose between pensioners’ financial security and the planet’s survival.

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