Working Paper
Corporate Green Pledges
Abstract: We identify corporate commitments for reductions of greenhouse gas emissions—green pledges—from news articles using a large language model. About 8% of publicly traded U.S. companies have made green pledges, and these companies tend to be larger and browner than those without pledges. Announcements of green pledges significantly and persistently raise stock prices, consistent with reductions in the carbon premium. Firms that make green pledges subsequently reduce their CO2 emissions. Our evidence suggests that green pledges are credible, have material new information for investors, and can reduce perceived transition risk.
Keywords: climate finance; text classification; event studies; transition risks;
JEL Classification: G14; G32; Q54; Q56;
https://doi.org/10.24148/wp2024-36
Access Documents
File(s):
File format is application/pdf
https://www.frbsf.org/wp-content/uploads/wp2024-36.pdf
Description: Full text - article PDF
Bibliographic Information
Provider: Federal Reserve Bank of San Francisco
Part of Series: Working Paper Series
Publication Date: 2024-11-20
Number: 2024-36