Evaluating the Greenium and Environmental Effectiveness of Green Bonds in the Asia-Pacific Region

This thesis investigates the dual promise of corporate green bonds in the Asia Pacific market, examining both their financial pricing, known as the "greenium" and their connection to issuer level environmental performance. Two questions drive the analysis. Does a persistent negative yield premium exist for green bonds across the heterogeneous APAC region? And is third party verification through Second-Party Opinions associated with stronger environmental outcomes? The study draws on a sample of 23,056 APAC corporate bonds issued between 2016 and 2025. High-dimensional fixed-effects OLS regressions isolate the greenium while controlling for features specific to this region, including state owned enterprises, fragmented local credit ratings and Islamic financial instruments known as Sukuk. Once issuer-level heterogeneity is properly absorbed through issuer fixed effects, no statistically significant pooled greenium is found, a result that holds whether the continuous bond-level controls are winsorized or left in raw form, whether the model additionally absorbs country-by-year variation in market conditions, and whether the sample is restricted to bonds carrying a direct global-agency credit rating rather than a locally deflated one. A significant pricing advantage does emerge, however, when the sample is split by ownership structure. Non-state-owned issuers show a discount of roughly 5 to 6 basis points while state-owned issuers show no discount at all. Splitting instead by country of issue returns no significant result on either side, a pattern consistent with the heavy overlap between state ownership and Mainland Chinese issuance in this sample rather than an independent country effect. A Propensity Score Matching exercise corrected for an ownership imbalance present in an earlier specification, corroborates this picture with a marginally significant matched-sample premium concentrated in the same non-state-owned segment. The environmental analysis, conducted on issuer-level cross-section restricted to firms with available emissions data, finds a more measure-specific pattern than a uniform absence of association. SPO verification shows no statistically significant association with Scope 1+2 intensity or total CO2 emissions, but a marginally significant negative relationship with Scope 1 intensity specifically. Rather than treating this as proof that verification carries no environmental substance, the finding is read as evidence that SPOs in the APAC context function primarily as signals of procedural credibility, with a narrow measure-specific link to demonstrated environmental performance. Taken together, these results contribute to the sustainable finance literature by presenting suggestive evidence that the APAC greenium varies with ownership structure rather than being uniformly present, though the formal interaction test does not establish that this difference is statistically significant, and by offering a more cautious account of what third party verification can and cannot tell us about environmental outcomes.