Archive · 29 Dec 2025
Green Bonds Shield Financial & Climate Risks
Green bonds are a special type of investment that helps protect your money and the environment at the same time.
A study by professors from IIM Indore found that green bonds are the best way to reduce risks in your investment portfolio while also helping to fight climate change.
They looked at different types of investments, like green bonds, clean energy stocks, and even some types of cryptocurrencies, over a long period of time.
They discovered that green bonds are the most stable and can lower the ups and downs in your investment portfolio.
This means that if you want to invest in a way that is good for the planet and also keeps your money safe, green bonds are a great choice.
The study suggests that people and companies should use green bonds more to make sure their investments are both safe and helpful for the environment.
Green bonds are effective in mitigating portfolio risk and addressing climate concerns.
A study by IIM Indore professors found green bonds to be the most stable green assets.
The research analyzed various green and conventional assets over 11 years.
Green bonds reduce portfolio volatility and downside risk, similar to conventional bonds.
Institutions should prioritize green bonds for climate-aligned investments without compromising financial stability.
- Who
- Prof. Udayan Sharma and Prof. Kousik Guhathakurta of IIM Indore
- What
- A study on the effectiveness of green bonds in mitigating financial and climate risks
- When
- The study was published in 2025, covering data from August 2014 to September 2025
- Where
- The study was conducted at IIM Indore and published in the Journal of Environmental Management
- Why
- To assess whether green financial assets can act as hedges for investors and tools for climate risk mitigation
- Study Authors
- Prof. Udayan Sharma and Prof. Kousik Guhathakurta
- Institution
- IIM Indore
- Journal
- Journal of Environmental Management
- Study Period
- August 2014–September 2025
- Assets Analyzed
- Green bonds, clean energy assets, clean cryptocurrencies, conventional bonds, conventional energy assets, dirty cryptocurrencies
- Key Finding
- Green bonds reduce portfolio volatility and support climate risk mitigation
- Implication
- Institutions should prioritize green bonds for climate-aligned investments without compromising financial stability