Carbon emissions & Valuations
How can company valuations incorporate carbon emissions?A seminal paper by Bolton and Kacperczyk (2021), Do Investors Care About Carbon Risk?, offers valuable guidance. The authors examine stock returns in relation to firms’ Scope 1, 2, and 3 emissions, with two notable findings. 1. Absolute emissions matter to equity investorsHigher levels of Scope 1, 2, and […]