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Market-Based Green Firms

Author

Listed:
  • Konrad Adler

  • Oliver Rehbein

  • Matthias Reiner

  • Jing Zeng

Abstract

We propose measuring firms’ exposure to climate risk via the market. We build a theoretical foundation and construct empirical market-based greenness measures based on abnormal stock returns around UN climate conferences. Our measures cover around 36,000 international firms, tenfold the existing measures. Market-based greenness is associated with lower present and future carbon emissions, and provides explanatory power distinct from existing climate risk measures. Market-based green firms are more likely to file green patents, have lower stock price volatility, and are financially more robust. At the country level, market-based greenness correlates with lower emission intensity and larger shares of renewable energy.

Suggested Citation

  • Konrad Adler & Oliver Rehbein & Matthias Reiner & Jing Zeng, 2026. "Market-Based Green Firms," CRC TR 224 Discussion Paper Series crctr224_2025_768, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2025_768
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp768
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    Keywords

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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