Pricing Carbon Risk: Investor Preferences or Risk Mitigation?
| Autor: | Stefanie Kleimeier, Michael Viehs |
|---|---|
| Přispěvatelé: | Department of Accounting and Finance, RS-Research Line Innovation (part of LIRS program), Finance, RS: GSBE Theme Sustainable Development |
| Jazyk: | angličtina |
| Rok vydání: | 2021 |
| Předmět: |
Economics and Econometrics
Valuation of Environmental Effects Natural Disasters Banks Depository Institutions Micro Finance Institutions Mortgages Legislation Monetary economics q51 - Valuation of Environmental Effects Effects of global warming 0502 economics and business Climate Global Warming 050207 economics Bank loans Risk management Financing Policy Financial Risk and Risk Management Capital and Ownership Structure Value of Firms Goodwill 050205 econometrics Carbon emissions Cost of debt Scope (project management) business.industry 05 social sciences COST Loan Cost of capital Greenhouse gas Environmental regulation Business Finance |
| Zdroj: | Economics Letters, 205(109936):109936. Elsevier Economics Letters, 205:109936. Excerpta Medica, Elsevier Science Kleimeier, S & Viehs, M 2021, ' Pricing Carbon Risk : Investor Preferences or Risk Mitigation? ', Economics Letters, vol. 205, no. 109936, 109936 . https://doi.org/10.1016/j.econlet.2021.109936 |
| ISSN: | 0165-1765 |
| DOI: | 10.1016/j.econlet.2021.109936 |
| Popis: | Do banks charge an environmental premium when lending to publicly listed firms? Using a unique and comprehensive database on carbon emissions, we find that higher carbon emissions are associated with higher loan spreads. This effect exists for loans arranged by all lenders suggesting that spread premia are driven by environmental risks rather than investor preferences. Consistent with ex-post risk, companies without appropriate board-level responsibility pay higher spreads. While countries might introduce effective legislation to mitigate the effects of climate change, our results indicate that there is scope for a market-based solution to complement explicit environmental regulation. |
| Databáze: | OpenAIRE |
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