Is investment capital cheaper for green firms? Evidence from equity listings at Euronext - Oslo

Erika Berle, Kjell Jørgensen and Bernt Arne Ødegaard

May 2024

We investigate whether the sustainability profile of a firm affects the tems at which this firm list on a stock market. Given the evidence that sustainable firms have a lower cost of capital, we expect this to also be reflected in the issue terms at an IPO. The laboratory for our investigation is new issues at Euronext Oslo. Surprisingly we find little evidence of differences linked to the environmental stance of the firm. The implication is that the (negative) premium on green stocks (greenium) is lower in magnitude than previously thought.

Keywords: IPO; Cost of Capital; Underpricing; ESG; Euronext Oslo

JEL Codes: G30; G12; G24

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