Market-Based Green Firms

Konrad Adler (), Oliver Rehbein (), Matthias Reiner () and Jing Zeng ()
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Konrad Adler: University of St.Gallen & SFI
Oliver Rehbein: WU Vienna & VGSF
Matthias Reiner: WU Vienna & VGSF
Jing Zeng: University of Bonn & CEPR

No 421, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We propose measuring firms’ exposure to climate risk via the market. We build a theoretical foundation and construct empirical market-based greenness measures based on abnormal stock returns around UN climate conferences. Our measures cover around 36,000 international firms, tenfold the existing measures. Market-based greenness is associated with lower present and future carbon emissions, and provides explanatory power distinct from existing climate risk measures. Market-based green firms are more likely to file green patents, have lower stock price volatility, and are financially more robust. At the country level, market-based greenness correlates with lower emission intensity and larger shares of renewable energy.

Keywords: Climate change; greenness; green firms; climate risk (search for similar items in EconPapers)
JEL-codes: G14 G32 G38 Q54 (search for similar items in EconPapers)
Pages: 94 pages
Date: 2026-07
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:421

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