Greenhouse Gas Emissions Mitigation and Firm Value: A Study of Large North-American and European Firms
University of Akron - Department of Finance
Monterey Institute of International Studies
September 17, 2011
Midwest Finance Association 2012 Annual Meetings Paper
There is strong public pressure globally to mitigate GHG emissions even though regulatory requirements for GHG mitigation vary greatly among countries. However, research on the influence of GHG emissions mitigation on firm value has been inconclusive. This paper contributes by examining the impact of GHG emissions on firm value for a sample of over 600 large firms from the US, Canada, and Europe. We find that GHG emissions have a negative influence on firm value. However, we cannot document that GHG emission mitigation actions add to firm value. The value maximizing nature of such actions seems to be moderated by the nature and quality of corporate governance in a firm perhaps especially as absent any industry-wide regulatory requirements there is no direct link between such GHG mitigating actions and shareholder wealth maximization.
Number of Pages in PDF File: 38
Keywords: governance, environment, strategy
JEL Classification: G30, G34, Q54working papers series
Date posted: September 18, 2011
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