Conference Programme
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available). Note that the schedule is subject to changes.
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Daily Overview |
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Parallel Session 07: Carbon Emission Targets, Measures & Verification Location: Seminar Room 6 (Level 2) Session Chair: Sadat Reza, Nanyang Technological University | |
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Corporate Emissions Target Announcements: Credibility and Market Reaction 1: Stern School of Business, New York University, United States of America; 2: Haas School of Business, University of California, Berkeley, United States of America; 3: Harvard Business School, United States of America We study stock market reactions to corporate announcements of emissions reduction targets. Using generative AI to screen news headlines, we identify 2,417 emissions target announcements from 2006 to 2023 and document three main findings. First, target announcements are associated with negative stock price reactions on average but with significant variations. Second, firms with more credible disclosures—those with higher environmental scores, reasonable assurance of emissions data, and a longer history of emissions reporting—receive more negative reactions. Third, firms with more negative market reactions subsequently reduce their emissions intensity more, consistent with the market correctly anticipating firms that will engage in costly decarbonization efforts. We identify two reasons why firms set targets and follow through despite negative market reactions: (i) benefits are realized later, as seen in less negative market reactions when climate regulation materializes; and (ii) ESG-linked pay incentivizes target announcement and subsequent decarbonization. Our findings shed light on how market values voluntary climate commitments. | |