Work

Stock markets, corporate climate pledges, and the Science-Based Target Initiative

Year: 2024

Type: article

Abstract: Climate advocates and finance industry titans suggest firms’ climate policies have economic payoffs. We examine whether stock markets reward firms that have joined the Science-Based Targets Initiative (SBTi), a voluntary climate program that verifies firms’ emission reduction pledges. Our analysis of S&P 500 companies’ quarterly stock prices for 2010–2023 finds little evidence that SBTi verification (of any type) increases stock prices. If stock markets are not incentivizing firms to voluntarily undertake climate actions, policymakers and climate advocates need to focus on providing nonfinancial rewards to encourage firms to invest in emission reductions.

Source: npj Climate Action

DOI: 10.1038/s44168-024-00148-8

Authors: Inhwan Ko, Aseem Prakash

Institutions: University of Nevada, Reno, University of Washington

Language: English

Topic: Corporate Social Responsibility Reporting

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Climate action

Open Access status: gold

Estimated APC paid: $1,290