How does debt financing, such as green bonds, influence InvestEU financial guarantees across countries, considering the role of the ESG scores in shaping this relationship?

Details

Supervisors

Postaire, Maxence

Faculty

Louvain School of Management

Degree label

Master [120] : ingénieur de gestion, à finalité spécialisée

Abstract

enThis thesis focuses on the InvestEU programme, and its financial guarantees provided to projects aimed at supporting sustainable investment, innovation and job creation in Europe. This programme is part of the European Green Deal which aims to achieve a climate neutral economy by 2050. In addition, two other key concepts are at the heart of this study, namely ESG ratings and green bonds. ESG ratings are increasingly adopted by companies not only for financial and reputational reasons, but also in response to environmental and social pressures. Green bonds are a type of financial instrument that raise capital specifically for sustainable and low carbon projects. Based on a dataset of 109 projects approved under the InvestEU programme between 2022 and 2024, along with country-level indicators, an Ordinary Least Squares (OLS) regression was conducted. The results suggest that both the number of green bonds issued and ESG scores are negatively associated with the operation amount allocated by InvestEU to projects. However, these effects are not statistically significant. To the best of my knowledge, this thesis contributes to the existing literature by examining the financial guarantee system of the InvestEU programme, jointly evaluating ESG ratings and the issue of green bonds in the context of public guarantees and integrating these two independent variables into the same model.