We empirically examine the impact of a firm’s carbon emissions level on the market valuation of organic and inorganic investments. We document that the market reacts negatively to corporate investment announcements by companies with high carbon emissions levels. Further analysis indicates that the discount on market valuation is more pronounced for the set of organic investments, within which only asset acquisitions and product launches are negatively affected by the high carbon emissions level at the announcement.
- Carbon emissions
- Inorganic investment announcements
- Market valuation
- Organic investments announcements
ASJC Scopus subject areas
- Economics and Econometrics