This study examines the relationship between carbon risk and stock returns in Korea. We find that a firm’s carbon intensity is a significant determinant of its cross-sectional stock returns. Stocks with high exposure to carbon risk exhibit higher average returns. The abnormal return associated...

Anthropogenic climate change poses a threat to all people and governments, but the response to that threat varies enormously across countries. Some adopt politically costly and economically challenging climate change mitigation policies, while others deny that climate change is occurring. Why do...

This study investigates how a firm's climate change risk (FCCR) and financial flexibility (FIFL) affect its value and environmental, social, and governance (ESG) performance. We use data from publicly listed US firms for 2012-2021. We employed four estimation methods: bootstrap quantile...

This paper provides novel evidence on how green shareholder pressure can propagate emission spillover to asset owners who are subject to fewer oversights. Using shareholder proposals, engagement, and activism campaigns, I find publicly listed energy firms divest pollutive assets and lead to an...

Mitigating climate change requires aligning real economy investments with climate objectives. This pilot study measures the climate consistency of investments in transport infrastructure and vehicles in Latvia between 2008 and 2018, estimated at EUR 1.5 billion per year on average. To do so,...

This paper presents results from a first pilot study to measure the consistency of real economy investments with climate change mitigation objectives. The analysis focuses on investments in infrastructure and equipment in the manufacturing industries in Norway between 2010 and 2017, estimated at...

Using Credit Default Swap spreads, we construct a forward-looking, market-implied carbon risk factor and show that carbon risk affects firms' credit spread. The effect is larger for European than North American firms and varies substantially across industries, suggesting the market recognises...

We investigate the relationship between carbon intensity and default risk for South Korean firms and examine the role of investor attentiveness to environmental issues on this relationship. Using carbon emissions and Merton’s distance-to-default, we find that carbon emission is significantly...

Strong regulatory actions are needed to combat climate change, but climate policy uncertainty makes it difficult for investors to quantify the impact of future climate regulation. We show that such uncertainty is priced in the option market. The cost of option protection against downside tail...

We estimate the economic impact of climate change by exploiting variation in local temperature across suppliers of the same client. We find that suppliers experiencing a 1°C increase in average daily temperature decrease their sales by 2%. The effect is more pronounced among suppliers in...