Green ocean finance - the race to issue a world's first
Abstract: Our thesis provides an in-depth overview of the events leading up to Vasakronan's issuance of the world's first corporate green bond in November 2013. The study's aim is to analyze the catalysts enabling the issue, the incentives and obstacles faced by the involved actors and the impact the first and subsequent issuances have had on Vasakronan. We find that several key characteristics of both Vasakronan and the issuance's underwriter SEB enabled them to bring the first green bond to market, including Vasakronan's previous sustainability work, ownership structure, credit market perception and nature of operations as a real estate company. A main incentive driving all involved parties was the potential of being a world first - in Vasakronan's case serving to amplify the effect of other perceived benefits including increased visibility and broadened investor base, signaling effects to other stakeholders and affirmation of the sustainability work already conducted. The primary obstacles faced consisted of process uncertainty and to a lesser extent incremental costs and workload associated with the issue, both of which were largely mitigated through SEB's involvement. The issuance sparked subsequent green financing activities for Vasakronan, in turn translating into improved operational and environmental performance for the company. through strengthened organizational identity and culture, incentive-alignment and improved inter-function collaboration, lowered overall cost of debt, significantly broadened investor base and improved publicity.
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