Divestment and greenhouse gas emissions: an event-study analysis of university fossil fuel divestment announcements

Alida Monaco

Journal of Sustainable Finance & Investment, 2023, vol. 13, issue 4, 1451-1479

Abstract: An event-study analysis of U.S. university fossil fuel divestment announcements on public fossil fuel companies’ abnormal returns (AR) is used to estimate divestment’s impact on fossil fuel companies’ greenhouse gas (GHG) emissions. These ARs could affect the companies’ capital development, and subsequent GHG emissions. The event-study is paired with a probit regression analysis of annual fossil fuel companies’ Securities and Exchange Commission (SEC) filings, to ascertain whether divestment is viewed as a material risk to capital expansion. This analysis finds a statistically significant negative average AR for divestment announcements on event day negative one and a statistically insignificant three-day cumulative average AR. Furthermore, this study finds that a 1% decrease in the average or cumulative average AR is associated with a statistically significant increase in the probability that firms disclose divestment. Therefore, while the overall change in GHG emissions is still ambiguous, there may be evidence for divestment’s efficacy.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/20430795.2022.2030664 (text/html)
Access to full text is restricted to subscribers.

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:taf:jsustf:v:13:y:2023:i:4:p:1451-1479

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TSFI20

DOI: 10.1080/20430795.2022.2030664

Access Statistics for this article

Journal of Sustainable Finance & Investment is currently edited by Dr Matthew Haigh

More articles in Journal of Sustainable Finance & Investment from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().