THE EFFECT OF GREEN BONDS ISSUANCE ON THE COMPANY PROFITABILITY RATIO AND ACTIVITY RATIO IN INDONESIA

• Main Author: Carissa Ardani, Fatya
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/83078
• Institution: Institut Teknologi Bandung

The disruptive effect of climate change needs to be addressed because it will affect individuals, the government, the environment, and economic loss. The green bonds are commonly utilized as a green finance practice to tackle the climate change problems, and the funding from the bonds will be used for green projects. The Indonesian government encourages corporations in its market to issue the green bonds. It is part of Indonesia responsibilities to address the climate change issue due to infrastructure sector in Indonesia being a significant contributor to carbon emissions. As one of the companies that already issued green bonds, PT Sarana Multi Infrastruktur responded to climate change by issuing green bonds in 2018, which will be used as a sample in this research. This research examines the impact of company that issue green bonds on their profitability and activity ratio. Difference-in-difference method was used in this research to derive the findings. The finding examines that the issue of green bonds has significantly benefited on both profitability and activity ratio. This indicates that the company effectively leverage its assets and optimize its capital allocation from the green bonds financing to generate the profitability and revenue. As a result, the findings imply that company can support the climate change problem by issue the green bonds, which also contribute to attract the investors.