TY - JOUR
T1 - Carbon emission and firms’ value: Evidence from Europe
AU - Perdichizzi, Salvatore
AU - Cicchiello, Antonella Francesca
AU - Dal Maso, Lorenzo
PY - 2024
Y1 - 2024
N2 - 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
AB - 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
KW - Carbon emission
KW - Market value
KW - Carbon emission
KW - Market value
UR - http://hdl.handle.net/10807/270092
U2 - 10.1016/j.eneco.2024.107324
DO - 10.1016/j.eneco.2024.107324
M3 - Article
SN - 0140-9883
VL - 131
SP - 1
EP - 11
JO - Energy Economics
JF - Energy Economics
ER -