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Valuation effects of emissions reduction target disclosures

Author

Listed:
  • Khandelwal, Urvashi
  • Sharma, Prateek
  • Nagarajan, Viswanathan

Abstract

•Emissions reduction target disclosures (ERTD) increase firm value.•The valuation premium is higher for aggressive emissions reduction targets.•The valuation premium is primarily driven by an increase in expected sales.•ERTD do not affect expectations of operating costs and the firm's cost of equity.•Industry competition and pollution intensity are negatively related to the premium.

Suggested Citation

  • Khandelwal, Urvashi & Sharma, Prateek & Nagarajan, Viswanathan, 2022. "Valuation effects of emissions reduction target disclosures," Finance Research Letters, Elsevier, vol. 49(C).
    • Handle: RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003075
    DOI: 10.1016/j.frl.2022.103080
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