The Anatomy of Decarbonizing Firms

Guillaume Coqueret, Thomas Giroux and Borui Qiu
Additional contact information
Guillaume Coqueret: EMLYON Business School
Thomas Giroux: ETH Zürich - Department of Management, Technology, and Economics (D-MTEC)
Borui Qiu: EM Lyon (Ecole de Management de Lyon) - Emlyon Business School

No 26-31, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: We study the firm-level drivers of corporate decarbonization using a global panel combining financial characteristics, balance-sheet indicators, ESG metrics, macroeconomic variables, and firms' greenhouse gas emissions. Emission trajectories exhibit strong persistence, with past emissions the dominant predictor of future performance. However, firms with larger carbon footprints also display greater abatement potential, creating opportunities for targeted stewardship and capital reallocation. We identify adoption of Science-Based Targets (SBT) as a significant catalyst for emission reductions and provide causal evidence that credible, externally validated climate commitments accelerate decarbonization. We develop machine-learning models that outperform heuristic benchmarks in forecasting one-year-ahead abatement, especially in hard-to-abate sectors, and we show that such forecasts can help further curtail portfolio-level emissions. Nevertheless, our results indicate that, given current emission trends in the cross-section of firms, building portfolios with net zero objectives for 2050 remains an open challenge.

JEL-codes: G11 Q5 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2026-04
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=6091687 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

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:chf:rpseri:rp2631

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().