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Climate-finance

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posted on 2023-06-10, 03:33 authored by Panagiotis Tzouvanas
It is widely believed that climate change can affect the financial performance of firms. In this chapter, we conceptualise the effects of climate change on the financial performance of firms. We explain that these effects have a twofold justification. First, climate change has been induced in the modern business as a form of pollution prevention. Therefore, firms that decrease their emissions can avoid environmental regulations and attract shareholders. Second, behavioural finance literature has shown that investors prefer environmental firms because they extract utility by holding these stocks. We empirically test the former channel. Results indicate that decreasing Greenhouse gases can indeed improve firms’ performance. Although, results are robust across three different regions; North America, Europe and Asian-Pacific, firms in the EU enjoy the highest benefits by engaging in emissions reductions.

History

Publication status

  • Published

File Version

  • Accepted version

Publisher

Palgrave Macmillan

Page range

195-215

Pages

282.0

Book title

Applications in energy finance: the energy sector, economic activity, financial markets and the environment

ISBN

9783030929565

Department affiliated with

  • Accounting and Finance Publications

Full text available

  • No

Peer reviewed?

  • Yes

Editors

Ioannis Chatziantoniou, Christos Floros

Legacy Posted Date

2022-05-17

First Compliant Deposit (FCD) Date

2022-05-17

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