Authors: SAUGAT DAS and Dr. PIYUSH KUMAR SINGH
Abstract
Access to voluminous amount of funds is a pre-requisite for the successful achievement of the Sustainable
Development Goals (SDGs) by the year 2030. In this regard, Green Bonds have the prospective to narrow down
a sovereign’s fiscal deficits at comparable lower yields. This paper attempts to draw a linkage between the
proceeds from green bond issuances and the SDGs, viz. Clean water and Sanitation (SDG 6), Affordable and
Clean Energy (SDG 7), Industry, Innovation and Infrastructure (SDG 9), Sustainable Cities and Communities
(SDG 11), Climate Action (SDG 13) and Life on Land (SDG 15). Subsequently, we argue that the global green
bond issuances can be a viable financial instrument for tapping the domestic and foreign capital in order to achieve
the six SDGs. This article has the potential to forward the green bond literature in the East and South Asian
geographical domain by developing an econometric relationship between green bonds and SDGs. For this study,
the authors have collected data from Bloomberg, Thomson Reuters, government websites and think-tank reports
for the period 2015-22. Further, this is a pioneering work to investigate the established cause-effect relationship
using machine learning algorithms, namely Random Forest and Support Vector Machine in the Python
programming platform. The outcome of this work offers novel and constructive evidence for the East and South
Asian countries, viz. India, China, Thailand, Malaysia and Singapore, because the study endorses the debt markets
as an alternative to the equity products for accumulating assets pertaining to achievement of their respective
Nationally Determined Contributions (NDCs). This, in turn supports the view that more number of nations are
planning their own sovereign climate bond issuances as part of the Paris Climate Agreement and other
commitments related to global warming.
Keywords: Green Bonds, Sustainable Development Goals, Paris Agreement, Public Finance
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