Behavioural skills and Green halo: Difference between pages

From ACT Wiki
(Difference between pages)
Jump to navigationJump to search
imported>Doug Williamson
(Other two skill elements added to see also)
 
imported>Doug Williamson
(Add link.)
 
Line 1: Line 1:
One of the three elements of the ACT's Competency Framework.
''Sustainability - sustainable finance - pricing - cost of capital - halo effect.''


Behavioural skills are:
A green halo is a theoretical benefit enjoyed by an organisation or sector from green activity or signalling, outside the immediate scope of the activity itself.


:Commercial drive and organisation
For example, benefits resulting from related reputational improvements.


:Self management and accountability


:Influencing
:<span style="color:#4B0082">'''''Green halo might lead to lower cost of capital for green bond issuers'''''</span>


:Working effectively with others
:"...green bonds may provide additional indirect benefits for the issuer.


:For instance, by highlighting the environmental credentials of an issuer, green bonds offer a marketing benefit, potentially lowering the firm’s cost of capital by attracting new investors, or potentially improving business performance by attracting new customers.


==See also==
:This hypothesized indirect effect is called the green halo...
* [[ACT Competency Framework]]
* [[Commercial drive and organisation]]
* [[Self management and accountability]]
* [[Influencing]]
* [[Working effectively with others]]
* [[Technical skills]]
* [[Business skills]]


[[Category:Behavioural_skills]]
 
:The argument for issuing green bonds to capture a green halo can be situated within the theoretical context of signaling problems.
 
:Firms possess asymmetric information about their environmental credentials, such as future plans to reduce emissions. If this information is not or cannot be communicated effectively to investors with a preference for sustainability, firms may suffer from suboptimal costs of capital.
 
:Issuing a green bond may serve as a (potentially costly) solution to address the signaling problem and achieve a more optimal capital cost."
 
:''The Green Corporate Bond Issuance Premium - International Finance Discussion Papers 1346 - Board of Governors of the Federal Reserve System - 2022, p7-8.''
 
 
== See also ==
* [[Asymmetric information]]
* [[Bond]]
* [[Cost of capital]]
* [[Emissions]]
* [[Federal Reserve System]]
* [[Green]]
* [[Green bond]]
* [[Green curve]]
* [[Green finance]]
* [[Green gilt]]
* [[Greenium]]
* [[Halo effect]]
* [[Issuance]]
* [[Issuer]]
* [[Optimal capital structure]]
* [[Premium]]
* [[Reputational risk]]
* [[Signalling]]
* [[Sustainability]]
* [[Sustainable finance]]
 
 
==External link==
 
*[https://www.federalreserve.gov/econres/ifdp/the-green-corporate-bond-issuance-premium.htm Caramichael, John and Andreas Rapp (2022) - "The Green Corporate Bond Issuance Premium," International Finance Discussion Papers 1346. Washington: Board of Governors of the Federal Reserve System]
 
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Ethics]]
[[Category:Identify_and_assess_risks]]
[[Category:Manage_risks]]
[[Category:Risk_frameworks]]
[[Category:Risk_reporting]]
[[Category:Financial_products_and_markets]]

Latest revision as of 05:17, 11 March 2023

Sustainability - sustainable finance - pricing - cost of capital - halo effect.

A green halo is a theoretical benefit enjoyed by an organisation or sector from green activity or signalling, outside the immediate scope of the activity itself.

For example, benefits resulting from related reputational improvements.


Green halo might lead to lower cost of capital for green bond issuers
"...green bonds may provide additional indirect benefits for the issuer.
For instance, by highlighting the environmental credentials of an issuer, green bonds offer a marketing benefit, potentially lowering the firm’s cost of capital by attracting new investors, or potentially improving business performance by attracting new customers.
This hypothesized indirect effect is called the green halo...


The argument for issuing green bonds to capture a green halo can be situated within the theoretical context of signaling problems.
Firms possess asymmetric information about their environmental credentials, such as future plans to reduce emissions. If this information is not or cannot be communicated effectively to investors with a preference for sustainability, firms may suffer from suboptimal costs of capital.
Issuing a green bond may serve as a (potentially costly) solution to address the signaling problem and achieve a more optimal capital cost."
The Green Corporate Bond Issuance Premium - International Finance Discussion Papers 1346 - Board of Governors of the Federal Reserve System - 2022, p7-8.


See also


External link