Stock Market Reactions to COP26 and Climate Change Exposures of Indian Firms

Saumitra N Bhaduri (), Ekta Selarka () and Alankrti Aggrwal
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Saumitra N Bhaduri: Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025, India.
Ekta Selarka: (Corresponding author), Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025
Alankrti Aggrwal: Madras School of Economics, Gandhi Mandapam Road, Behind Government Data Centre, Kotturpuram, Chennai, 600025

Working Papers from Madras School of Economics,Chennai,India

Abstract: The paper examines the market reaction to the climate policy announcement (COP26) for the Indian listed firms using a novel measure of firm-specific exposure to climate-change developed by Sautner et al. (2023). The findings suggest that, while the overall market reaction is negative, firms with higher climate change exposure experience a significantly muted negative response. In contrast to the prevailing assumption that investors in emerging markets predominantly price exposure to risk, the findings indicate that firms engaging in proactive climate risk management receive favorable response.

Keywords: Event study; Stock market; Climate change; Climate exposure; COP26 (search for similar items in EconPapers)
JEL-codes: G14 G28 Q58 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2026-02
New Economics Papers: this item is included in nep-ene, nep-env, nep-fmk and nep-sea
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