Corporate Green Pledges

Michael Bauer, Daniel Huber, Eric Offner, Marlene Renkel and Ole Wilms

No 19788, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We identify corporate commitments for reductions of greenhouse gas emissions--green pledges--from news articles using a large language model. About 8% of publicly traded U.S. companies have made green pledges, and these companies tend to be larger and browner than those without pledges. Announcements of green pledges significantly and persistently raise stock prices, consistent with reductions in the carbon premium. Firms that make green pledges subsequently reduce their CO2 emissions. Our evidence suggests that green pledges are credible, have material new information for investors, and can reduce perceived transition risk.

JEL-codes: G14 G32 Q54 Q56 (search for similar items in EconPapers)
Date: 2024-12
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