Green bonds as a perspective financial instrument for bank investment in Ukraine

Abstract

Banks, as the main institutional participants in the securities market, play an important role in ensuring green investment processes, positioning themselves as socially and environmentally responsible financial institutions, which confirms the relevance of the research topic. The purpose of the study is to disclose the essence of green bonds as a new financial instrument on the international and Ukrainian stock market and to determine the prospects for their inclusion in the investment portfolio of the banks of Ukraine. The study uses general scientific and special methods of scientific cognition: analysis and synthesis, induction and deduction, horizontal analysis method, graphical method, comparative legal method, and analytic hierarchy process. The authors clarify the interpretation of the economic essence of the concept of “green bonds”. The peculiarities of the formation of the global market for these financial instruments and trends in its formation in 2007-2022 are investigated. The legislative framework for regulating the national green bond market is elaborated. The advantages and disadvantages of including green bonds in the investment portfolio of Ukrainian banks are determined. The optimal tool for improving the formation of a bank investment portfolio based on such criteria as liquidity, profitability and riskiness, taking into account general banking goals, is determined and the role of green bonds as potential investment instruments for banks is characterised based on the data obtained. Barriers to the formation of green investment policy by banks and ways to overcome them are described. The practical significance of the obtained results lies in the fact that the implementation of the suggested recommendations for removing barriers to environmentally oriented investments by Ukrainian banks will help to revitalise the financing of environmental projects, and the developed proposals for enhancing the formation of investment portfolios by Ukrainian banks can be used by financial institutions to increase their financial stability and minimise the risk of investment transactions.