Does Sustainable Finance Regulation Play a Role in the "Greening” of Capital Markets?

Robust regulatory frameworks are important for developing healthy capital markets. Most current research ends that sustainable finance regulation serves as a backbone for the development of sustainable bond markets. Conversely, some argue that such regulation is not essential for effective greening of capital markets. This Brief presents results from a novel global sustainable Finance regulatory data set. Worldwide, adoption of sustainable Finance regulation remains low. Yet, there is a strongpositive relationship between the number of issued corporate green bonds and (1) the presence of sustainability factors in stock markets' regulatory frameworks, (2) having sustainability reporting as a listing rule on a local securities exchange, (3) regulatory guidance on sustainability reporting, and (4) issuance of annual sustainability reports by securities exchanges or regulatory agencies