How Do Climate Policies Affect Holdings of Green and Brown Firms' Securities?

Dominika Ehrenbergerova, Simona Malovana and Caterina Mendicino
Authors registered in the RePEc Author Service: Dominika Kolcunová

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: We study how climate policies and significant events affect holdings of securities issued by low-carbon (green) and high-carbon (brown) firms. Using security-level data, we show that financial sector increased its holdings of green firms' securities and reduced its holdings of brown firms' securities following the Paris Climate Agreement and the 2019 UN Climate Action Summit. The COVID-19 pandemic had a similar effect, highlighting the role of the carbon risk premium. Conversely, the private non-financial sector increased its holdings of brown firms' securities, indicating a shift of transition risks toward this sector. Lastly, home bias and the environmental performance of holder and issuer countries significantly influence these effects.

Keywords: Climate policies; COVID-19 pandemic; difference-in-differences; security-level data (search for similar items in EconPapers)
JEL-codes: G11 G20 Q54 (search for similar items in EconPapers)
Date: 2023-10
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cnb.cz/export/sites/cnb/en/economic-re ... wp/cnbwp_2023_11.pdf

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:cnb:wpaper:2023/11

Access Statistics for this paper

More papers in Working Papers from Czech National Bank, Research and Statistics Department Contact information at EDIRC.
Bibliographic data for series maintained by Tomas Karhanek ().