Beschreibung:
Many companies are setting ambitious targets to reduce their greenhouse gas emissions (GHG) in line with the Paris Agreement. However, there is limited evidence on the market effects of setting those targets. Using a GARCH model with a trend developed by the authors and a panel fixed effects model, this paper analyzes the effects of committing and setting GHG targets on public companies’ stock price returns and volatility. We find no evidence that committing or setting a target yields higher returns, while the impacts on price volatility are negative but short-lived. In view of these results, we conclude that there are no visible stock market gains in the short term for companies that commit and set GHG targets and that other factors may be explaining their motivations to engage in GHG mitigation actions