How Firms Manage Climate Change
Paper Session
Friday, Jan. 3, 2025 8:00 AM - 10:00 AM (PST)
- Kilian Huber, University of Chicago
On the Importance of Assurance in Carbon Accounting
Abstract
Firms that obtain assurance for their carbon accounting report on average a 9.5% highercarbon intensity than their peers. When controlling for assurance, we do not find evidence
that SBTi target-setters reduce their future emissions. Instead, firms that obtain assurance
reduce their future carbon intensity by 3.3%. This has implications for portfolio managers
and ESG raters as taking reported carbon emissions at face value would lead to penalizing
firms that are more serious about their carbon reductions. It also calls for mandatory
assurance when carbon reporting is mandatory and when reported emissions are generally
relied upon in regulation.
Temperature, Adaptation, and Local Industry Concentration
Abstract
We use plant-level data from the U.S. Census of Manufacturers to study the short- and long-run effects of temperature on manufacturing activity. We find that high-temperature shocks significantly increase energy costs and lower productivity for small plants, while large plants are mostly unaffected. Commuting zones with higher increases in average temperatures between the 1980s and the 2010s experience a decline in the number of small plants, reallocation of labor from small to large plants, and higher local labor market concentration. Differences in costs per unit of energy, managerial skills, and access to finance contribute to explaining our resultsDiscussant(s)
Lauren Cohen
,
Harvard University
Laura Starks
,
University of Texas-Austin
Shan Ge
,
New York University
JEL Classifications
- G3 - Corporate Finance and Governance