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Contribution Details

Type Master's Thesis
Scope Discipline-based scholarship
Title Stock Price Reactions of U.S. Companies to Net- Zero Announcements
Organization Unit
Authors
  • Chiara Weilenmann
Supervisors
  • Alexander Wagner
  • Stefano Ramelli
Language
  • English
Institution University of Zurich
Faculty Faculty of Business, Economics and Informatics
Number of Pages 45
Date 2022
Abstract Text With the seemingly increasing importance of net-zero pledges, this thesis aims to add to the existing literature by showing the effects of net-zero corporate climate strategies on company value. Based on existing literature, an increase in company value following a net-zero announcement due to lower costs, higher revenue, and lower climate risk is expected. The conducted analysis shows no significant results indicating a positive effect of net-zero announcements. In a second step, this thesis looks at the influence of governmental climate strategies on this effect of net-zero announcements on stock returns. Governments can influence people’s beliefs regarding climate change risk, and they also directly influence climate risk through climate regulations. The two presidencies of Trump and Biden are well suited for an investigation of different governmental climate strategies, as Trump’s election in 2016 drastically downshifted expectations about U.S. policy towards climate mitigation, and Biden’s election in 2020 had the opposite effect, drastically shifting them upward. In line with existing literature, a higher positive effect of the net-zero announcement on company value is expected under the presidency of Biden compared to Trump’s. No significant results are found when looking at the two presidencies. A possible reason for the insignificant results could be that investors do not consider net-zero announcements to be relevant or reliable.
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