Green bonds: how do green bonds perform when compared with conventional bonds?

This master thesis investigates a recent financial instrument, the so-called green bonds. The green bond market has known a dazzling evolution since the first emission in 2007 by the European Investment Bank. Green bonds only differ from conventional bonds in the use of proceeds, which is invested in eco-friendly projects. However, the literature diverges regarding a potential difference in the returns and the liquidity risk. This master thesis aims at comparing the returns and the liquidity risks between green bonds and conventional bonds issued in EUR with a fixed coupon by financial institutions and corporates. The differences in terms of yield and liquidity between the green bonds issued by corporates versus financial institutions are also studied.