How Sustainable Business Models Support Green Bond Issuance: An analysis of Nordic energy companies

This study examines how five Nordic energy companies have overcome internal barriers to issue green bonds through sustainable business models. Two research questions are addressed: 1) How can companies remove internal barriers to issuing a green bond through their sustainable business model? 2) How does the sustainable business model change during or after the company issues a green bond? The study investigates these research questions in five Nordic energy firms that have issued green bonds since 2017. It employs a case-based methodology relying on qualitative interviews and secondary published materials to understand the internal conditions, rationale, management viewpoints, and logic on the connection between business models, sustainability, and firm financing. We show how developing the green finance framework as one of the core elements of a sustainable business model supports green bond issuance. Beyond that, green bonds support environmental objectives, facilitate virtuous cycles, and create more value for the company, investors, and society. The main contribution of this research is the deepened understanding of the features of the sustainable business model that help overcome internal barriers to green bond issuance. Moving forward, we propose that sustainable financing should be considered an integral part of sustainable business models to align and reinforce the company’s strategy, asset choices, and governance.