Green bonds drive firms to uphold environmental commitments under public scrutiny.
The article shows that companies issue green bonds to show they are serious about their environmental promises. Companies with more environmental risks and from countries with weaker laws are more likely to issue green bonds. Some companies with bad environmental reputations choose stronger oversight by listing on green-bond exchanges. After issuing green bonds, companies get more attention from the media about their environmental actions. This extra scrutiny helps reduce environmental problems and makes it more likely for companies to meet their emission targets.