ESG and bond market resilience: Evidence from the Covid crisis
Abstract
We document a smaller expansion of the negative CDS-bond basis and lower selling pressure during the Covid crisis for bonds issued by firms with high environmental and social (E&S) scores, relative to bonds from low E&S firms. This pattern is consistent with lower investor outflows from sustainability focused funds rather than fund managers discriminating among which bonds to sell. Our results suggest that the relative performance of high and low E&S bonds during a crisis is influenced not only by shifts in firm fundamentals, but also by non-fundamental factors such as investor preferences and trading behaviour.
Fields of Study & Subjects
Sustainable Finance and Green Bonds
Corporate Social Responsibility Reporting
Financial Markets and Investment Strategies
Publication details
- Journal / source
- Journal of Banking & Finance
- Publisher
- Elsevier BV
- Volume
- 185
- Pages
- 107634–107634
- Publication date
- 8 January 2026
- Language
- EN