Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306828 
Year of Publication: 
2024
Series/Report no.: 
IMFS Working Paper Series No. 214
Publisher: 
Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS), Frankfurt a. M.
Abstract: 
We identify corporate commitments for reductions of greenhouse gas emissions - green pledges - from news articles using a large language model. About 8% of publicly traded U.S. companies have made green pledges, and these companies tend to be larger and browner than those without pledges. Announcements of green pledges significantly and persistently raise stock prices, consistent with reductions in the carbon premium. Firms that make green pledges subsequently reduce their CO2 emissions. Our evidence suggests that green pledges are credible, have material new information for investors, and can reduce perceived transition risk.
Subjects: 
climate finance
decarbonization commitments
text classification
event study
transition risk
carbon premium
JEL: 
G14
G32
Q54
Q56
Document Type: 
Working Paper

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