Carbon Disclosure and the Cost of Capital
52 Pages Posted: 19 Jan 2021 Last revised: 15 Nov 2021
Patrick Bolton
Imperial College London; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)
Marcin T. Kacperczyk
Imperial College London - Accounting, Finance, and Macroeconomics; Centre for Economic Policy Research (CEPR)
Date Written: November 13, 2021
Abstract
We estimate effects of voluntary and mandatory disclosure of carbon emissions on stock returns and volatility using a large global sample of publicly listed firms. We find that voluntary disclosure of scope 1 emissions by companies results in lower stock returns relative to non-disclosing companies. However, a cost of disclosing emissions is increased divestment by institutional investors. We also find that U.K. mandatory carbon disclosure rules for publicly traded companies resulted in lower stock-level uncertainty. The effect of these mandatory disclosure rules also spilled over into other markets, especially those with close geographic and economic proximity, and companies in the same industry.
Keywords: Carbon Emissions, Voluntary and Mandatory Disclosure, Stock Returns
JEL Classification: G12, G23, G30, D62, D83
Suggested Citation: Suggested Citation
Patrick Bolton
Imperial College London ( email )
South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom
Centre for Economic Policy Research (CEPR)
London
United Kingdom
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
European Corporate Governance Institute (ECGI)
c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium
HOME PAGE: http://www.ecgi.org
Marcin T. Kacperczyk (Contact Author)
Imperial College London - Accounting, Finance, and Macroeconomics ( email )
South Kensington campus
London SW7 2AZ
United Kingdom
Centre for Economic Policy Research (CEPR) ( email )
London
United Kingdom
Do you have negative results from your research you’d like to share?
Related eJournals
-
Financial Accounting eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS3,550PAPERS18,412This Journal is curated by:Ross L. Watts at Massachusetts Institute of Technology (MIT) - Sloan School of Management -
Corporate Finance: Governance, Corporate Control & Organization eJournal
Corporate Finance: Governance, Corporate Control & Organization eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS3,261PAPERS33,255This Journal is curated by:René M. Stulz at Ohio State University (OSU) - Department of Finance -
Capital Markets: Asset Pricing & Valuation eJournal
Capital Markets: Asset Pricing & Valuation eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS3,024PAPERS32,036 -
S&P Global Market Intelligence Research Paper Series
S&P Global Market Intelligence Research Paper Series
Subscribe to this free journal for more curated articles on this topic
FOLLOWERS2,546PAPERS40,118 -
Accounting, Corporate Governance, Law & Institutions eJournal
Accounting, Corporate Governance, Law & Institutions eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS1,757PAPERS11,312This Journal is curated by:Vernon J. Richardson at University of Arkansas at Fayetteville -
Corporate Governance & Finance eJournal
Corporate Governance & Finance eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS1,477PAPERS15,287This Journal is curated by:Lucian A. Bebchuk at Harvard Law School -
International Accounting eJournal
International Accounting eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS1,248PAPERS3,411 -
International Corporate Finance eJournal
International Corporate Finance eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS1,033PAPERS8,422This Journal is curated by:René M. Stulz at Ohio State University (OSU) - Department of Finance -
Corporate Governance: Disclosure, Internal Control, & Risk-Management eJournal
Corporate Governance: Disclosure, Internal Control, & Risk-Management eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS954PAPERS4,918This Journal is curated by:Lucian A. Bebchuk at Harvard Law School -
Corporate Social Responsibility (CSR) eJournal
Corporate Social Responsibility (CSR) eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS826PAPERS13,017This Journal is curated by:Timothy M. Devinney at The University of Manchester - Alliance Manchester Business School -
Investment & Social Responsibility eJournal
Investment & Social Responsibility eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS681PAPERS981This Journal is curated by:Timothy M. Devinney at The University of Manchester - Alliance Manchester Business School -
Politics & Energy eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS681PAPERS14,202 -
Environmental Economics eJournal
Environmental Economics eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS637PAPERS21,707 -
Socially Responsible Investment eJournal
Socially Responsible Investment eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS629PAPERS18,345 -
Environmental, Social & Governance (ESG) Research Hub eJournal
Environmental, Social & Governance (ESG) Research Hub eJournal
Subscribe to this free journal for more curated articles on this topic
FOLLOWERS351PAPERS2,977 -
Climate Action eJournal
Subscribe to this free journal for more curated articles on this topic
FOLLOWERS277PAPERS1,800 -
Innovation Finance & Accounting eJournal
Innovation Finance & Accounting eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS227PAPERS5,026 -
Energy Policy & Economics eJournal
Energy Policy & Economics eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS157PAPERS9,552 -
Energy eJournal
Subscribe to this fee journal for more curated articles on this topic
FOLLOWERS90PAPERS13,571