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Carbon Emissions Announcements and Market Returns

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journal contribution
posted on 2024-01-09, 12:08 authored by S Giansante, M Fatouh, N Dove
The paper investigates the impact of carbon emissions on stock price returns of European listed firms. This relationship is assessed across all three emissions scopes, as well as using expectations to detect if future emissions impact contemporary returns. Our findings show that firms with higher expected future emissions deliver lower contemporary returns after controlling for market capitalization, profit and other known return predictors. This result is statistically significant in the post Paris Agreement period for two- to three-year expectations of Scope 2 emissions. However, there is marginal to no significant negative relationship between current emissions and current returns. Overall, the results suggest that more environment-minded investors look further ahead and would expect lower returns from a polluting firm compared to a firm with no carbon emissions after the Paris Agreement.

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Citation

Giansante S, Fatouh M, Dove N. Carbon Emissions Announcements and Market Returns. Sustainability. 2023; 15(13):10385. https://doi.org/10.3390/su151310385

Author affiliation

School of Business, University of Leicester

Version

  • VoR (Version of Record)

Published in

Sustainability (Switzerland)

Volume

15

Issue

13

Pagination

10385 - 10385

Publisher

MDPI

eissn

2071-1050

Acceptance date

2023-05-22

Copyright date

2023

Available date

2024-01-09

Language

en

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