We are pleased to announce that Lukas Schnabel, Setareh Heidari, Stefan J. Hock, and Sascha Raithel have published the article "The Impact of Voluntary Carbon Goal Announcements on Stock Returns" in Management Science.

The study examines how voluntary carbon goal announcements by publicly traded U.S. firms affect capital market reactions. Based on an event study of 188 announcements between 2018 and 2024, the findings show that such announcements are associated with a statistically and economically significant positive stock market response, with an average cumulative abnormal return of 0.65% over the (−2, +2) event window.

The analysis further shows that market reactions are stronger when media coverage emphasizes the expected business implications of firms' carbon goals. In addition, firms committing to eliminate larger volumes of current emissions tend to receive more favorable investor evaluations, suggesting that markets value the scale of environmental commitment. However, these effects are found to diminish over time.
Overall, the study provides new insights into how firms' voluntary climate commitments are evaluated by financial markets and highlights the importance of effective communication in shaping investor perceptions.

Read the full article here: https://pubsonline.informs.org/doi/10.1287/mnsc.2024.08673