58 Pages Posted: 10 May 2021 Last revised: 8 Jun 2022
Date Written: June 7, 2022
A growing fraction of publicly traded companies globally have voluntarily made commitments to attain reductions in their carbon emissions by a certain date. We explore two major commitment movements, the carbon disclosure project, and the science-based target initiative. We find that: (1) while the companies that make commitments subsequently further reduce their emissions, the effect of these initiatives on overall emissions of publicly traded companies (including those that do not commit) has been small; (2) the companies that commit, and those that make the most ambitious commitments, tend to be companies with lower emissions; (3) firm commitments are less prevalent in countries where governments have made national commitments. Overall, the movements to get companies to commit have been successful in drawing in the willing but have found greater resistance from the companies that need to reduce their emissions the most.
Keywords: Carbon Emissions, Science Based and CDP Targets, Nationally Determined Contributions
JEL Classification: G12, G23, G30, D62, D83
Suggested Citation: Suggested Citation