This study investigates how enterprises’ climate risks (measured by carbon emissions) affect their brand value.
We use the widely accepted Hirose model to measure the brand value, which its value derived from financial statements. Based on a large sample of US corporations from 2002 to 2022, we performed a panel regression with firm and year-fixed effects.
The findings suggest that lowering carbon emissions boosts brand value. Furthermore, the correlation is not homogeneous; instead, it is more pronounced in high-pollution industries and competitive marketplaces where customers have more purchasing options. To validate the findings, we use various brand value metrics, carbon emission scopes, multiple lead–lag approaches and difference-in-differences analysis, with the 2015 Paris Agreement serving as an exogenous shock to carbon emissions. The findings survived these additional tests.
This study contributes to the literature on sustainable financing and marketing.
