Date: Tuesday, 9 April 2024, at 12:15 pm
Venue: Room Bruguier Pacini, DEM
Speaker and Title:
Francesco Pistolesi, Daniele Tammaro, Paolo Morabito (University of Pisa)
Environmental Disasters and Carbon Emissions: Hidden Drivers of Systematic Risk
Abstract:
Consequence of environmental issues have been largely studied by economic literature. However, the relationship between environmental disasters and financial factors, and exactly the systematic risk of companies is still an under-investigated topic. We study this matter by analysing a comprehensive list of 6,335 firms belonging to NYSE or NASDAQ over 18 years, from 2005 to 2022. The results indicate that CO2 emissions of firms do increase their systematic risk, resulting in higher values of Beta for companies.
Furthermore, previous environmental disasters would act as a wake-up call for firms, making them more responsible and aware of the economic, financial and ethical consequences of erroneous actions, thus reducing the systematic risk of firms and finally their Beta. The findings would indicate that investors are increasingly adapting their decisions, not only based on economic performances, but also on sustainability performances.
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