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Last week I came upon a paper published by KPMG presenting fascinating results from a study by academics at three American universities. The topic: the impact of a carbon emissions and of voluntary disclosure of emissions on the market value of 500 of the largest companies for the period 2006-2008.
The results appear conclusive: companies’ stock market value was decreased by carbon emissions and increased by voluntary disclosure of carbon footprints. Specifically company value decreased by an average of $212 for every ton of carbon emitted, and the average value of companies that voluntarily disclosed their carbon emissions was $18,788 million higher than the average value of companies that did not disclose.
The researchers studied the firms in the S&P 500 index. These are companies with market values over $4 billion and whose shares are traded regularly on the New York stock exchange or NASDAQ, so they are very significant to the financial markets. And the paper describes sophisticated ways in which companies were matched with each other for comparison, suggesting the results are robust.
The KPMG paper is a modified version of a more technical paper due to be published in an accounting journal in March. Whilst we will have to wait to read some of the finer details, the message of the research seems unequivocal: in 2006-2008 the financial world was rewarding companies with lower emissions and those that disclosed their emissions. I wonder what’s happened since then…
