Although the green-labelled debt instrument was first introduced to financial markets in 2007, frequent issuance is associated with the Paris Agreement, in which € 20 billion worth of green bonds were announced in 2014 and behavioural changes of investors due to worsening environmental conditions. Furthermore, topics related to green bonds are well-documented in academic literature. However, concerning the impact of green bond issuance on stock price movements of corporations listed in emerging markets, there is a gap in the scholarly literature, which is why the findings of this study may provide vital information to investors and issuing companies. Employing the positivist worldview and quantitative approach, STATA software is utilised for statistical analysis of the research model in which a sample is established by gathering 2591observations from 77 corporations across three exchange markets, which are Bolsa De Valores (Brazil), Shanghai Stock Exchange(China), and National Stock Exchange of India (India), from 2014 to 2024 through the Bloomberg database. Although the coefficient of -0.019 indicates the negative influence of green bond issuance on stock returns, the findings of the regression analysis did not find any significant correlation between independent and dependent variables (p-value of 0.295), which suggests that green bond issuance has no long-term significant effect on the stock returns of firms listed in emerging markets. Although the results indicate that investors do not reward corporations for sustainability, the chosen methodology, low R-square, and lack of information regarding green bond issuance might generate biases.
Green bonds, sustainable finance, stock returns,emerging markets, ESG, panel data analysis.