Sustainable Finance in Biotechnology: The Role of Green Bonds and ESG Integration in Advancing Biotech Innovation

Abstract

Background: Green bonds have become a critical product in the sustainable finance market, intended to finance projects for environmental purposes. ESG has emerged as a crucial investment management theme that has also complemented the concept of sustainable investing as well as long-term financial performance. Objective: The main objectives of this research are to assess the consequences of green bonds and ESG integration on sustainable finance markets concerning financial performance, market development, and efficiency of ESG practices in industries. Methods: A mixed-methods approach was employed, combining quantitative and qualitative analyses. Data was obtained from financial databases, questionnaires, interviews, and cases. To measure the performance of green bonds relative to other traditional bonds and the impact of ESG incorporation on the market, descriptive statistics, regression analysis, sectoral analysis, and correlation analysis were applied. Results: The analysis points to the fact that green bonds provide decent returns, lower risks, and better risk-adjusted returns compared to conventional bonds. The study reveals that ESG factors are value-added for corporate financial performance; improved ESG scores mean an increase in return and a reduction in stock price volatility. Sectoral analysis shows that the energy, transportation, and technology sectors are the most active in green bonds and have a high impact on the environment. Conclusion: Green bonds and ESG integration are useful concepts for sustainable finance to thrive in the industry. Those industries that possess higher levels of ESG capabilities are both financially rewarded and environmentally sustainable. The findings also support the need to enhance the adequacy of regulation, encourage sustainability, and invest in transparency.