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The Impact of Net-Zero Emissions Target Announcements on Listed Organisations’ Share Price

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posted on 2023-02-06, 02:55 authored by Dhruv Parashar

In order to ascertain the holistic impact of net-zero emissions commitments on their ability to help preserve the environment, it is essential to determine their impact on the financial viability of capital markets to ensure the economic sustainability of the net-zero emissions commitments. This would promote a ‘business case’ for a global adoption of these commitments. However, there is a scarce understanding around the necessitating impact of these commitments on the reactions of investors. Therefore, this study examines whether capital markets react to the announcements of Australian and United Kingdom (UK) listed organisations committing to strategically binding net-zero emissions targets. This study also attempts to assess the share price movements that correspond to a comparative analysis between organisations listed on the Australian Securities Exchange and the London Stock Exchange. The results show that investors react marginally negatively to the announcements around the time of the event; however, this reaction consequently brings positive returns to the investors. Furthermore, the results show that a declaration of net-zero emissions commitments by listed companies in the UK generally results in a greater share price movement (negative) during the time of the announcement compared to the companies listed in Australia. The results of this study aspire to provide a greater momentum to the ongoing debate as it establishes a direct impact of net-zero emissions announcements on the share price of the committing organisation. The study also helps encourage managerial insights into how net-zero emissions commitments can promote the financial viability of sustainability endeavours of an organisation. It highlights the importance of this nascent trend of global adoption as policymakers, customers, and society attempt to enforce the claims set forth by committing organisations.

History

Table of Contents

Chapter 1. Introduction -- Chapter 2. Background -- Chapter 3. Theory, Literature Review and Hypotheses Development -- Chapter 4. Methodology -- Chapter 5. Results -- Chapter 6. Conclusions, Implications, Limitations, and Directions for Future Research

Awarding Institution

Macquarie University

Degree Type

Thesis MRes

Department, Centre or School

Department of Accounting and Corporate Governance

Year of Award

2022

Principal Supervisor

Parmod Chand

Additional Supervisor 1

Rajni Mala

Rights

Copyright: The Author Copyright disclaimer: https://www.mq.edu.au/copyright-disclaimer

Language

English

Extent

115 pages

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