Valuation effects of emissions reduction target disclosures

Valuation effects of emissions reduction target disclosures

•Emissions reduction target disclosures (ERTD) increase firm value.•The valuation premium is higher for aggressive emissions reduction targets.•The valuation premium is primarily driven by an increase in expected sales.•ERTD do not affect expectations of operating costs and the firm's cost of e...

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Veröffentlicht in:Finance research letters 2022-10, Vol.49, p.103080, Article 103080
Hauptverfasser: Khandelwal, Urvashi, Sharma, Prateek, Nagarajan, Viswanathan
Format: Artikel
Sprache:eng
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Zusammenfassung:•Emissions reduction target disclosures (ERTD) increase firm value.•The valuation premium is higher for aggressive emissions reduction targets.•The valuation premium is primarily driven by an increase in expected sales.•ERTD do not affect expectations of operating costs and the firm's cost of equity.•Industry competition and pollution intensity are negatively related to the premium.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2022.103080