PAPERZILLA
Crunching Academic Papers into Bite-sized Insights.
About
Sign Out
← Back to papers
Social Sciences › Economics, Econometrics and Finance › Finance
Do Investors Care about Carbon Risk?
★
★
★
★
☆
SHARE
Overview
Paper Summary
Conflicts of Interest
Identified Weaknesses
Rating Explanation
Good to know
Topic Hierarchy
File Information
Paper Summary
Paperzilla title
Carbon Footprint = Higher Stock Returns? Investors Pricing in Climate Risk!
This paper finds that stocks of companies with higher total carbon emissions, and increases in emissions, earn higher returns. This suggests that investors are already pricing in carbon emission risk and demanding compensation for their exposure to it. Interestingly, emission intensity has no significant impact on returns, despite its common use as a screening indicator by institutional investors.
Possible Conflicts of Interest
None identified
Identified Weaknesses
Limited Data Coverage
The reliance solely on reported or estimated emissions data without considering alternative or updated data sources.
Sample Selection Bias
The sample of companies used in the study may not be fully representative of the entire universe of listed companies.
Omitted Variable Bias
Potential confounding factors, such as regulatory changes, technological advancements, or investor sentiment shifts, may influence the relationship between carbon emissions and stock returns.
Measurement Error
The use of carbon intensity as a measure of emissions, which is used in the study, may not fully reflect a company's true carbon risk.
Rating Explanation
This paper provides a comprehensive analysis of the relationship between carbon emissions and stock returns. The methodology is sound, with a cross-sectional analysis controlling for multiple factors. The findings offer valuable insights into the growing field of climate change and finance. While some limitations exist, such as data constraints and potential omitted variables, the overall research is strong and contributes significantly to the literature.
Good to know
This is our free standard analysis. Paperzilla Pro fact-checks every citation, researches author backgrounds and funding sources, and uses advanced AI reasoning for more thorough insights.
Explore Pro →
Topic Hierarchy
File Information
Original Title:
Do Investors Care about Carbon Risk?
File Name:
w26968.pdf
[download]
File Size:
1.20 MB
Uploaded:
July 14, 2025 at 05:18 PM
Privacy:
🌐 Public
© 2025 Paperzilla. All rights reserved.