Market-Based Green Firms

Konrad Adler (), Oliver Rehbein (), Matthias Reiner () and Jing Zeng ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, 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
Date: 2026-07
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