Dealing with Carbon Risk and the Cost of Debt: Evidence from the European Market

Fabio Pizzutilo, Massimo Mariani, Alessandra Caragnano and Marianna Zito
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Massimo Mariani: Department of Management, LUM Jean Monnet University, 70010 Casamassima (BA), Italy
Alessandra Caragnano: Department of Management, LUM Jean Monnet University, 70010 Casamassima (BA), Italy
Marianna Zito: Department of Management, LUM Jean Monnet University, 70010 Casamassima (BA), Italy

IJFS, 2020, vol. 8, issue 4, 1-10

Abstract: The ever-increasing attention towards climate change has led to investigate the economic and financial impact of environmental risk. In this scenario, we aimed at investigating the relationship between a specific component of environmental risk, namely the so-called carbon risk, and the cost of debt. This research is motivated by the fact that few studies have focused on the aforementioned relationship. We fill this gap by using a sample of companies listed on the Eurostoxx 600 Index. Our results evidence a positive relationship between carbon risk and cost of debt, providing a relevant contribution to the scarce existing literature on this topic.

Keywords: environmental finance; carbon risk; cost of debt; European financial market (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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