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|Title||Harmonization of External Green Bond Ratings|
|Institution||University of Zurich|
|Faculty||Faculty of Business, Economics and Informatics|
|Abstract Text||In this thesis, a harmonized rating scale for a selection of green bond ratings is created using bond-specific external review data. The rating scale can be used to compare external green bond ratings with one another. The basis of the scale is a set of indicators derived from the Green Bond Principles (GBP). A final score is attributed to each rating and consists of its average conformity with the GBP. This is measured by the ratings’ average performance in each indicator. This way both positive and negative opinions voiced by external reviewers are integrated. I find that equally positioned ratings on average show the same conformity with the GBP. There is however a distinct difference in conformity noticeable between relatively good and relatively bad ratings. Moreover, a brief yield analysis is conducted using the harmonized rating scale. The analysis shows that the relative differences in conformity of ratings originating from the same external reviewer are mirrored in the relative difference in their yields. Also, the findings show that when corrected for unobserved bond characteristics, this relation can also be seen for ratings from different external reviewers.|