LONDON (Reuters) - Companies that issue green bonds tend to be better at reducing their greenhouse gas emissions, especially in heavily polluting sectors, new analysis from the Bank for International Settlements has shown.

The study published on Tuesday was evaluating the impact of the near $3 trillion green bond market, where companies raise capital for projects that limit climate change or otherwise benefit the environment.

It found that in aggregate terms, the emissions of green bond issuers fell by more than 10% in the four years after issuance and that emissions per unit of company revenue - a measure of emissions intensity - showed an even starker 30% drop.

"The results show that green bond issuance is associated with a significant reduction in firms' subsequent GHG emissions," the study said.

Though the study acknowledged concerns raised about corporate "greenwashing", it said that a near six-fold boom in the size of the green bond market since 2018 and the growing number of governments now issuing them was boosting transparency.

Companies tend to issue only small amounts of green bonds relative to their size. That means they usually are not the central driver of emissions reductions. But they are often a good "signal" of a company's direction of travel, it concluded.

The intensity of "Scope 1" emissions such as from fuel used in a company's fleet of vehicles or burnt in its furnaces decreased by around 21% on average one year after its first green bond.

Similar results were also seen with broader Scope 1-3 emissions which also include emissions less in a firm's control such as in its supply chain. There emissions' intensity remained significantly lower for direct emissions even after three years.

The study used S&P Trucost data which is estimated to account for about two thirds of global greenhouse gas emissions.

Those emissions exhibit large geographical variation but are predominantly concentrated in a handful of countries with extensive manufacturing and energy-intensive sectors, such as China, the United States, Japan and India.

The findings of the research highlight how it is commonly "heavy emitters" that reduce their emissions after issuing green bonds.

"Given the skewness of carbon emissions, this is critical in terms of societal 'net zero' objectives," the study said.