Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/308042 
Year of Publication: 
2024
Series/Report no.: 
SAFE Working Paper No. 436
Publisher: 
Leibniz Institute for Financial Research SAFE, Frankfurt a. M.
Abstract: 
We analyze firms' carbon reduction strategies worldwide and identify one key channel: large, primarily European firms facing increased investor pressure divest pollutive assets to firms that are less in the limelight. There is no evidence of increased engagement in other emission reduction activities. We estimate that 369 million metric tons (mt) of CO2e are reallocated via divestments in the post-Paris Agreement period, shifting pollutive assets from Europe to the rest of the world. Our results indicate significant global asset reallocation effects and imply that responsible investors who want to truly invest responsibly need to monitor firms' divestment strategies closely.
Subjects: 
GHG Emissions
Asset Sales
Paris Agreement
Institutional Investors
Investor Pressure
Carbon Disclosure Project
JEL: 
G15
G23
G30
G38
M14
Q54
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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