Firm Commitments

58 Pages Posted: 10 May 2021 Last revised: 8 Jun 2022

See all articles by Patrick Bolton

Patrick Bolton

Columbia University - Columbia Business School, Economics; 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: June 7, 2022

Abstract

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

Bolton, Patrick and Kacperczyk, Marcin T., Firm Commitments (June 7, 2022). Columbia Business School Research Paper, Available at SSRN: https://ssrn.com/abstract=3840813 or http://dx.doi.org/10.2139/ssrn.3840813

Patrick Bolton (Contact Author)

Columbia University - Columbia Business School, Economics ( email )

420 West 118th Street
New York, NY 10027
United States

HOME PAGE: http://www0.gsb.columbia.edu/faculty/pbolton/

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

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

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