Corporate Green Pledges

Michael Bauer, Daniel Huber (), Eric Offner (), Marlene Renkel () and Ole Wilms ()
Additional contact information
Marlene Renkel: https://www.wiso.uni-hamburg.de/en/fachbereich-vwl/professuren/wilms/team/marlenerenkel.html
Ole Wilms: https://www.wiso.uni-hamburg.de/en/fachbereich-vwl/professuren/wilms/team/olewilms.html

No 2024-36, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: We identify corporate commitments for reductions of greenhouse gas emissions—green pledges—from news articles using a large language model. About 8% of publicly traded U.S. companies have made green pledges, and these companies tend to be larger and browner than those without pledges. Announcements of green pledges significantly and persistently raise stock prices, consistent with reductions in the carbon premium. Firms that make green pledges subsequently reduce their CO2 emissions. Our evidence suggests that green pledges are credible, have material new information for investors, and can reduce perceived transition risk.

Keywords: climate finance; text classification; event studies; transition risks (search for similar items in EconPapers)
JEL-codes: G14 G32 Q54 Q56 (search for similar items in EconPapers)
Pages: 49
Date: 2024-11-20
New Economics Papers: this item is included in nep-ene and nep-env
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Related works:
Working Paper: Corporate Green Pledges (2024)
Working Paper: Corporate green pledges (2024)
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DOI: 10.24148/wp2024-36

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