Corporate Carbon-Risk and Credit-Risk: The Impact of Carbon-Risk Exposure and Management on Credit Spreads in Different Regulatory Environments

Maurice Dumrose and André Höck

Finance Research Letters, 2023, vol. 51, issue C

Abstract: Global efforts to mitigate climate change can affect a company's business outlook thereby creating risks and opportunities for companies and investors. We investigate the relation between a company's carbon-risk and its credit-risk. Moreover, we highlight the importance of carbon-risk management and the role of the regulatory environment in this context. Using a global sample of corporate bonds, we show that both carbon-risk exposure and carbon-risk management significantly affect credit-risk while the regulatory environment moderates these relations. Our results are relevant for policy makers, investors and companies, especially those with a high carbon-risk exposure.

Keywords: Carbon risk; Credit risk; Climate change; Climate policy (search for similar items in EconPapers)
JEL-codes: G12 G38 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612322005918
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s1544612322005918

DOI: 10.1016/j.frl.2022.103414

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().