By Inhwan Ko &
August 11, 2024
Source: Nature
Photo / Image Source: Unsplash,
Abstract
Climate advocates and finance industry titans suggest firms’ climate policies have economic payoffs. We examine whether stock markets reward firms that have joined the Science-Based Targets Initiative (SBTi), a voluntary climate program that verifies firms’ emission reduction pledges. Our analysis of S&P 500 companies’ quarterly stock prices for 2010–2023 finds little evidence that SBTi verification (of any type) increases stock prices. If stock markets are not incentivizing firms to voluntarily undertake climate actions, policymakers and climate advocates need to focus on providing nonfinancial rewards to encourage firms to invest in emission reductions.
Ko, I., Prakash, A. Stock markets, corporate climate pledges, and the Science-Based Target Initiative. npj Clim. Action 3, 69 (2024). https://doi.org/10.1038/s44168-024-00148-8
Received05 April 2024
Accepted24 July 2024
Published11 August 2024
DOIhttps://doi.org/10.1038/s44168-024-00148-8
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