Amidst the growing global concern about climate change, societies have taken increased interest in corpora- tions’ output of greenhouse gas emissions, primarily CO2. Our study examines the direct and indirect effect of carbon emissions on firm value. We document that, in the European context, corporate carbon emissions are negatively associated with a company’s market valuation. Moreover, we find that CO2 emissions reduce the relevance of earnings (i.e., for high-polluting firms, earnings are less relevant for market valuation). Additionally, we show that the results are driven by Scope 1 emissions, not by Scopes 2 and 3. Finally, we establish that the country-level formal and informal institutions shape these effects
Perdichizzi, S., Buchetti, B., Cicchiello, A. F., Dal Maso, L., Carbon emission and firms’ value: Evidence from Europe, <<ENERGY ECONOMICS>>, 2024; 131 (n/a): 1-11. [doi:10.1016/j.eneco.2024.107324] [https://hdl.handle.net/10807/270092]
Carbon emission and firms’ value: Evidence from Europe
Cicchiello, Antonella Francesca;
2024
Abstract
Amidst the growing global concern about climate change, societies have taken increased interest in corpora- tions’ output of greenhouse gas emissions, primarily CO2. Our study examines the direct and indirect effect of carbon emissions on firm value. We document that, in the European context, corporate carbon emissions are negatively associated with a company’s market valuation. Moreover, we find that CO2 emissions reduce the relevance of earnings (i.e., for high-polluting firms, earnings are less relevant for market valuation). Additionally, we show that the results are driven by Scope 1 emissions, not by Scopes 2 and 3. Finally, we establish that the country-level formal and informal institutions shape these effectsI documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.