Document Type
Article
Disciplines
1.5 EARTH AND RELATED ENVIRONMENTAL SCIENCES, Environmental sciences, 5.2 ECONOMICS AND BUSINESS
Abstract
This research examines the market reaction to the publication of firm-specific environmental news for participating firms in the European Union’s Emissions Trading System (EU ETS) during its third phase. Our sample of 123 publicly listed participating firms, located in 21 European countries, accounted for 45.43% of emissions in the EU ETS in 2020. Using an event study methodology during the period 2014–2021, we find that positive news was rewarded with increased returns for publication events related to the latter years of the phase (2017–2020) while it had an insignificant impact for earlier year (2013–2016). This indicates that the EU ETS is finally fulfilling its intended function of incentivising participating firms to reduce their emissions. Our study highlights the contextually contingent nature of the relationship between environmental and financial performance.
DOI
https://doi.org/10.1080/1351847X.2023.2204195
Recommended Citation
Lynch, Benjamin and O'Hagan-Luff, Martha, "Finally, It Seems to be Working – The Evolving Valuation Effect of the European Union’s Emissions Trading System" (2023). Articles. 62.
https://arrow.tudublin.ie/buschacart/62
Funder
This research received no external funding
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Publication Details
https://www.tandfonline.com/doi/full/10.1080/1351847X.2023.2204195
Lynch, B. & O'Hagan-Luff. (2023). Finally, it seems to be working – the evolving valuation effect of the European Union’s emissions trading system. The European Journal of Finance.
https://doi.org/10.1080/1351847X.2023.2204195